updated 6/25/2004 8:42:44 PM ET 2004-06-26T00:42:44

Greyhound Lines Inc. will stop bus service to many small towns between Chicago and Seattle to cut costs and focus on its most profitable routes.

The company announced Friday it would close 260 stops, leaving 99 in its 13-state northern region effective Aug. 18.

Greyhound will make similar changes in other regions over the next two to three years, said chief executive Stephen E. Gorman.

Gorman said Greyhound would also shift some service from long trips to routes of 450 miles or less, which account for about three-fourths of its customers. He said customers would see more frequent service on peak daytime and weekend times on those shorter routes.

The changes will result in about 150 layoffs and the elimination of about 100 buses from the company’s fleet, Gorman said. He declined to say how much the company expected to save.

The cutbacks will affect service in Washington, Oregon, Idaho, Montana, Wyoming, Utah, Colorado, North Dakota, South Dakota, Nebraska, Minnesota, Iowa and Wisconsin. Isolated routes in a few other states also will be affected, Greyhound said.

The changes were in the works for nearly a year. Greyhound tried to stabilize its business by increasing prices on longer trips, canceling an order for 200 buses, and cutting about 20 percent of its management and supervisory employees.

“Starting in the summer of 2001, Greyhound started seeing a decline, particularly in the long haul,” Gorman said. “That decline accelerated after Sept. 11 (2001), and we needed to cut overhead.”

The downturn in travel coincided with a dramatic increase in insurance and security costs for airlines, train and bus lines, adding to Greyhound’s troubles.

Dallas-based Greyhound is a subsidiary of Laidlaw International Inc. of Naperville, Ill.

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