Atlantic Express ends run next month

One of the state’s largest yellow school bus companies will go out of business on Dec. 31 after it failed to save on labor costs with a new union contract, a company spokeswoman said last week.

Staten Island-based Atlantic Express Transportation, which has a large depot on Lawson Boulevard in Oceanside and which employs a number of local residents, will begin selling off routes and assets immediately as it prepares to go out of business, spokeswoman Carolyn Daly said.

The company said it plans to close and lay off its 5,500 employees, including 825 on Long Island. Atlantic Express yellow buses transport many Long Island students, It has locations in Farmingdale, Plainview and Oceanside. Its biggest market is in New York City. The spokeswoman added that about 2,000 of the drivers and matrons who work for the company will be eligible to work for other bus companies.

Just last week, Atlantic filed for Chapter 11 bankruptcy protection. It said at the time that it would use the Chapter 11 process to explore financing, to market its assets and to continue labor negotiations. In a Chapter 11 bankruptcy a company continues to operate while it tries to work out a reorganization plan. With no relief from the union forthcoming, company officials said, it had no choice but to close its door and sell its routes.

“Quite simply, our current business model in our largest market, New York, is not sustainable as union labor costs and operating expenses have severely hindered our ability to remain competitive and meet our financial obligations,” said David Carpenter, president and chief executive of Atlantic Express, in a statement.

The company and Amalgamated Transit Union Local 1181 had been locked in contract talks. A company spokeswoman said Friday that without a new contract the company can’t get the financing it needs to remain in business.

In the spring the two groups reached an impasse and the company imposed a 7.5 percent reduction in wages and benefits. The union went to court and the cuts were reversed.

The union blamed the company for its financial woes.

“Once again, the company is determined to try and lay the blame of their failed leadership at the feet of the hardworking men and women who are tasked with transporting our city’s children safely to and from school every day,” said Michael Cordiello, the local’s president.

Atlantic Express Transportation Corp., one of the largest providers of bus transportation in North America, was founded in 1964 with a 16-van operation. It now manages a fleet of several thousand vehicles operating from numerous facilities throughout the country.