[Federal Register Volume 63, Number 242 (Thursday, December 17, 1998)]
[Notices]
[Pages 69709-69710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33459]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Docket No. MC-F-20938]
Coach USA, Inc. and Coach Canada, Inc.--Control and Continuance
in Control--Autocar Connaisseur, Inc., Erie Coach Lines Company, and
Trentway-Wagar, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice Tentatively Approving Finance Transaction.
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SUMMARY: Coach USA, Inc. (Coach), a noncarrier that controls numerous
motor passenger carriers, and its wholly owned noncarrier subsidiary,
Coach Canada, Inc. (Coach Canada) (collectively, applicants), filed an
application under 49 U.S.C. 14303 for control of Autocar Connaisseur,
Inc. (Autocar) and Erie Coach Lines Company (Erie), and for continuance
in control of Trentway-Wagar, Inc. (Trentway), all motor carriers of
passengers or, in the case of Erie, an entity that intends to become a
motor carrier of passengers. Persons wishing to oppose the application
must follow the rules under 49 CFR 1182.5 and 1182.8.1 The
Board has tentatively approved the transaction, and, if no opposing
comments are timely filed, this notice will be the final Board action.
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\1\ Revised procedures governing finance applications filed
under 49 U.S.C. 14303 were adopted in Revisions to Regulations
Governing Finance Applications Involving Motor Passenger Carriers,
STB Ex Parte No. 559 (STB served Sept. 1, 1998).
DATES: Comments must be filed by February 1, 1999. Applicants may file
a reply by February 22, 1999. If no comments are filed by February 1,
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1999, this notice is effective on that date.
ADDRESSES: Send an original and 10 copies of any comments referring to
STB Docket No. MC-F-20938 to: Surface Transportation Board, Office of
the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC
20423-0001. In addition, send one copy of comments to applicants'
representatives: Betty Jo Christian and David H. Coburn, Steptoe &
Johnson LLP, 1330 Connecticut Avenue, N.W., Washington, DC 20036.
FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1600.
[TDD for the hearing impaired: (202) 565-1695.]
SUPPLEMENTARY INFORMATION: Coach currently controls several motor
passenger carriers. Coach Canada is a wholly owned Coach subsidiary
established for the purpose of obtaining control of those motor
passenger carriers that Coach currently controls that are based in
Canada, as well as Canada-based motor passenger carriers that Coach and
Coach Canada may in the future seek to control. In their application,
Coach and Coach Canada state that Coach assumed control of Autocar
2 by a stock transaction that was consummated on December
19, 1996. Applicants indicate that Coach did not until recently
determine that Autocar holds not only operating authority from Canadian
agencies, but also authority issued by the Interstate Commerce
Commission. Having discovered this unresolved control issue, Coach and
Coach Canada now seek Board authority to control this carrier.
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\2\ Autocar is a Quebec corporation. It holds federally issued
operating authority in Docket No. MC-166643, allowing it to conduct
charter and special operations between certain U.S./Canada border
crossings and points in the United States. Autocar operates a fleet
of approximately 180 buses and employs approximately 250 full and
part time persons. Autocar's annual revenues for the twelve month
period ending June 1998 were approximately $12.1 million.
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Coach and Coach Canada also seek Board authority to control Erie,
which they will acquire through a stock transaction. Erie, a
noncarrier, intends to obtain through a transfer of authority to be
requested from the Federal Highway Administration the operating
authority currently held by Erie Coach (1985), Inc. (Erie
1985).3 The stock of both Erie and Erie Coach (1985) is
currently being held in voting trusts pending the transfer of authority
and any action by the Board approving this application.
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\3\ Erie, a Nova Scotia corporation, plans to acquire from Erie
(1985) federally issued operating authority in Docket No. MC-127027.
That authority authorizes transportation of passengers between U.S./
Canada border crossing points and points in the United States. Erie
will operate a fleet of 23 motorcoaches and employ approximately 35
persons. Erie 1985s' gross revenues for the twelve month period
ending June 1998 were approximately $1.7 million.
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Coach currently controls Trentway.4 The Board exempted
that control in Coach USA, Inc. and Leisure Time Tours--Control and
Merger Exemption--Van Nortwick Bros., et al., Finance Docket No. 33428
(STB served Nov. 13, 1997). By this application, Coach seeks Board
approval for Coach Canada to obtain direct control of Trentway by
acquiring all of the voting stock of Trentway's ultimate parent, 337429
Canada, Inc., with Coach retaining indirect control of Trentway through
its control of Coach Canada.
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\4\ Trentway is an Ontario corporation. It holds federally
issued operating authority in Docket No. MC-126430. That authority
allows it to operate regular route and charter and special services
between points in Canada and points in the United States. Trentway
operates a fleet of approximately 348 buses and employs
approximately 600 full and part time persons. Its annual revenues
for the twelve month period ending June 1998 were approximately
$28.4 million.
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Applicants state that granting the application will not result in
any changes to carrier operations that are now being conducted and will
not reduce competitive options available to the traveling public. They
assert that each carrier is relatively small and faces substantial
competition from other bus companies and modes of transportation.
Applicants also submit that granting the application will produce,
or continue to produce, substantial benefits, including savings in
interest costs from the restructuring of debt and reduced operating
costs from Coach's enhanced volume purchasing power. Specifically,
applicants claim that the carriers to be acquired will benefit from the
lower insurance premiums negotiated by Coach or Coach Canada and from
volume discounts for equipment and fuel. Applicants indicate that Coach
will provide each carrier with centralized legal and accounting
functions and coordinated purchasing services. In addition, applicants
state that vehicle sharing arrangements will be facilitated through
Coach or Coach Canada to ensure maximum use and
[[Page 69710]]
efficient operation of equipment. Applicants aver that, with Coach's
and Coach Canada's assistance, coordinated driver training services
will be provided, enabling each carrier to allocate driver resources in
the most efficient manner possible. Applicants add that the proposed
transaction will benefit the employees of each carrier and that
collectively bargained agreements will be recognized.
Applicants state that Coach Canada, like other management
subsidiaries that Coach has established to assume control of, and
manage the operations of, motor passenger carriers as to which control
authority has previously been granted to Coach, will focus its efforts
on those carriers that are based in Canada. Applicants also state that
Coach Canada will be responsible for developing strategic business and
growth plans for the Canadian based entities that it seeks to control
and for assessing opportunities for further Canadian acquisitions of
passenger transportation entities. Applicants indicate that, over the
long term, Coach and Coach Canada will provide centralized marketing
and reservation services for the bus firms that they control, thereby
further enhancing the benefits resulting from these control
transactions.
Applicants certify that: (1) None of the carriers holds an
unsatisfactory safety rating from the U.S. Department of
Transportation; 5 (2) each has sufficient liability
insurance; (3) none is domiciled in Mexico or owned or controlled by
persons of that country; and (4) approval of the transaction will not
significantly affect either the quality of the human environment or the
conservation of energy resources. Additional information may be
obtained from applicants' representatives.
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\5\ Trentway and Autocar each hold satisfactory ratings. Erie
1985 has a conditional rating, while Erie, which is not presently a
carrier, has no rating.
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Under 49 U.S.C. 14303(b), we must approve and authorize a
transaction we find consistent with the public interest, taking into
consideration at least: (1) the effect of the transaction on the
adequacy of transportation to the public; (2) the total fixed charges
that result; and (3) the interest of affected carrier employees. The
prior consummation of the transaction involving Autocar does not bar
approval of the application under section 14303 if the evidence
establishes that the transaction would be consistent with the public
interest in other respects, and for the future.6 Approval is
granted in such circumstances when the record contains strong
affirmative evidence of public benefits to be derived from the
resulting control, warranting the view that the public should not be
penalized by being deprived of those benefits. Moreover, in this case,
the record shows an absence of intent to flout the law or of a
deliberate or planned violation. See Kenosha Auto Transport Corp.--
Control, 85 M.C.C. 731, 736 (1960).
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\6\ Applicants seek nunc pro tunc approval of their control of
Autocar, which they already control. While we are granting our
tentative approval, the need for retroactive effect has not been
demonstrated. Applicants recognize that they should have sought our
approval sooner but, under the circumstances, the Board does not
intend to pursue enforcement actions against applicants for the
previously unauthorized common control.
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On the basis of the application, we find that the proposed
acquisition of control and continuance in control is consistent with
the public interest and should be authorized. If any opposing comments
are timely filed, this finding will be deemed vacated and, unless a
final decision can be made on the record as developed, a procedural
schedule will be adopted to reconsider the application.7 If
no opposing comments are filed by the expiration of the comment period,
this decision will take effect automatically and will be the final
Board action.
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\7\ Under revised 49 CFR 1182.6(c), a procedural schedule will
not be issued if we are able to dispose of opposition to the
application on the basis of comments and the reply.
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Board decisions and notices are available on our website at
``WWW.STB.DOT.GOV.''
This decision will not significantly affect either the quality of
the human environment or the conservation of energy resources.
It is ordered:
1. The proposed acquisition of control and continuance in control
is approved and authorized, subject to the filing of opposing comments.
2. If timely opposing comments are filed, the findings made in this
decision will be deemed as having been vacated.
3. This decision will be effective on February 1, 1999, unless
timely opposing comments are filed.
4. A copy of this notice will be served on: (1) the U.S. Department
of Transportation, Office of Motor Carriers-HIA 30, 400 Virginia
Avenue, S.W., Suite 600, Washington, DC 20024; and (2) the U.S.
Department of Justice, Antitrust Division, 10th Street & Pennsylvania,
N.W., Washington, DC 20530.
Decided: December 9, 1998.
By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 98-33459 Filed 12-16-98; 8:45 am]
BILLING CODE 4915-00-P