Living Without Shackles

Airlines are not the only businesses buffeted by deregulation. From bus lines to banking, industries are learning to live without the shackles--or the safety net--of Government rules. And in all cases, stiff price competition has developed where once hardly any existed.

TRUCKING. Since passage in 1980 of legislation that made it easier to get into the trucking business, the number of interstate carriers has jumped 70%, to 30,717. Because of the new competition, the average price of shipping a truckload of freight is 25% to 30% lower than it was four years ago. The price squeeze has been tough on unionized carriers, which have laid off one-third of the Teamsters members employed in the industry. Meanwhile, low-cost nonunion trucking operations are mushrooming. Overnite Transportation, a nonunion company based in Richmond, has expanded its network from 21 states to 31 since deregulation. Its revenues rose by 25% between 1979 and 1982, despite the recession.

BUS LINES. After being hurt by the rise of cut-rate airlines, intercity bus companies were given new freedom last year to raise or lower fares. That helped trigger price wars between the two big carriers, Greyhound and Trailways. To trim costs, Greyhound asked that unionized drivers take a 9.5% pay cut and thereby provoked a strike that is now in its second month. Employees rejected a new wage offer last week, and Greyhound said it would continue its effort, started three weeks ago, to rebuild service with nonunion drivers.

BANKING. The phasing out of Government-mandated interest-rate ceilings has turned banking from a clubby business into a boisterous free-for-all. Institutions that once paid only 5% for their deposits now need to offer rates of 8% or more on a large portion of their savings accounts. That is one reason why 45 banks--a post-Depression record--have failed this year. Hit hardest in the turmoil are savings banks and savings and loan associations. The number of these thrift institutions has dwindled from about 4,500 to 3,600 since 1980. The strongest survivors, like Buffalo-based Goldome, are rapidly expanding by absorbing their weaker competitors.

TELECOMMUNICATIONS. Deregulation has hatched a gaggle of new players in this industry, once the undisputed domain of A T & T. More than 100 companies now compete with A T & T's Western Electric in manufacturing a vast new array of telephones, from the basic black model to designer styles and gimmicks like the Pac-Man special. Opportunities for growth--and disaster--abound. Technicom International, a young Darien, Conn., company that sells residential phones and small-business communications systems, captured revenues of $43 million in its first full year. Wall Streeters predict, however, that newcomers to the telecommunications competition will have a high mortality rate.

About the only sure winner in all the battles generated by deregulation, in fact, will be consumers. They should benefit from cheaper and more innovative products and services from companies that are leaner and hungrier. This file is automatically generated by a robot program, so viewer discretion is required.