[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