Four garages close as Midland Red streamlines
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• An alarming rise in Midland. Red operating costs that will amount to £3,639,000 by 1972 has resulted from the company's policy of providing a reliable and comprehensive service to the travelling public. Mr J. W. Womar, director and general manager, announcing this on Tuesday said: "It is apparent that neither the public nor local authorities are prepared to meet the cost of providing such service."
Following a loss of nearly £700,000 in 1970, the Midland Red's management team has been undertaking a critical review of the company's services and the result of this survey was announced to the trade unions at a 3+-hour meeting this week.
Union leaders were told that to remain in existence the company must break even in 1971 and reach its financial target in 1972.
The company is to close four garages, Cradley Heath and Lichfield on May 28, Wolverhampton on October 1, and Bromsgrove before the end of the year.
As part of its economy plans the company is also streamlining its services and as a result about 650 staff will become surplus before October this year although more than half are expected to retire or leave voluntarily. Following these immediate measures the situation will again be reveiwed in order to determine the second phase of the company's reorganization which will be completed by March 1972. This phase will ensure that Midland Red reaches its financial target by the end of next year.
In a determined effort to reduce the decline in bus travel by providing reliability and service, the company introduced a pay and productivity deal for crews in May last year; this enabled Monday-to-Friday services to reach virtually 100 per cent reliability and at weekends about 98 per cent.
As part of its plan to extract extra revenue the company also applied to the Traffic Commissioners for permission to introduce off-peak concessionary fares while stabilizing season ticket rates. The results of these moves are not very encouraging so far, Mr Womar told CM on Wednesday.
Midland Red has also been negotiating with county councils and, through these bodies other local authorities, for subsidies for uneconomic rural routes as provided for by Section 34 of the 1968 Transport Act. While some subsidies have been forthcoming, many local authorities have refused to share the financing of bus services through their areas and the company has been forced to withdraw these services as part of the present economy measures.
"The outcome of this reorganization will be to ensure that future services will be both adequate and reliable for the travelling public", said Mr Womar. He added: "The streamlined company which will emerge will be viable and will therefore provide a secure livelihood for employees."
Passengers carried by the company have now fallen to the 1939 level, although Midland Red operates half as much additional mileage and many additional vehicles.