Professionally and personally, long-time owner of North Mankato-based, 20-company Palmer Bus Service perseveres through one crisis after another.
Photo by Jeff Silker
He was on the precipice.
It was December 2004. The antagonistic managers of his ten bus companies had just attempted a bloodless coup d’etat. Their set of demands included having Floyd Palmer relinquish control over the day-to-day management of the school bus company he had owned and managed since 1974.
They were demanding his immediate resignation, even though he owned Palmer Bus Service and could have demanded theirs. Only four years earlier, Palmer Bus Service had received a National School Transportation “Golden Merit” Award that recognized the company’s excellent service, safety, and outstanding demonstration of community responsibility.
Yet if he fired them en masse—as he dearly wanted—who would organize the transporting of thousands of school children the next week? If his buses didn’t run, he could lose all ten of his bus contracts in one fell swoop. Competing companies could pick his carcass clean. Perhaps even some or all of the very managers demanding his resignation could quickly organize a company to bid on the broken contracts.
Rather than emotionally react, he relinquished power temporarily and began a nerve-racking waiting game. In the beginning all he could do was burrow into his basement bunker and toss a blanket over his beaten ego, feeling humiliated for having lost control, wallowing in a depression that was heavier than a yellow Blue Bird school bus. He ruminated over his managers’ reasons. They said they could manage better. None of it made sense. He felt powerless.
Then he began retaking power. The first person helping was wife, Lois, and the second, Mankato Clinic psychiatrist Dr. Robert Olson, who diagnosed and treated Palmer for acute paranoia, major depression, and attention deficit hyperactivity disorder. He also had dyslexia.
Palmer has since regained control. Eight of the ten managers now work elsewhere. But the surprising part: since he regained control, annual company revenues have doubled, from $8 million to $16 million, and the number of buses owned has doubled from 275 to 550. He now has full or partial bus contracts with these school districts: Shakopee, Austin, Mankato, St. Clair, Le Center, Maple River, Montgomery-Lonsdale, and 13 others.
Palmer has taken a remarkable about-face from the precipice—in a life brimming with dozens.
You like going by Floyd D. Palmer. What does the “D” stand for?
The “D” is for Dale, which was my dad’s name.
Give our readers an idea of the size of Palmer Bus Service?
We operate about 550 buses in 20 Minnesota school districts, have more than 600 employees, and have annual revenues of about $16 million. Our headquarters building is in North Mankato just off Lor Ray Drive.
Describe your home life growing up.
We lived on a farm until 1957, which was the year my dad quit farming the first time. He then bought a farm and quit that one the next year. Around that time, I had to leave home at age 13 in order to help support my family.
Later in life, looking back at my dad and mom, I began realizing I didn’t want my own family—my wife and four children—to live the way I had grown up. To say it kindly, my mother didn’t give my dad much support. Over the years, I’ve been fortunate to have a supportive wife. In fact, when I have failed, she has never once put me down. In today’s terms, I would say my mother had some disabilities and in some respects couldn’t help who she was. She didn’t support my dad.
Give an example of her not supporting your dad.
Just one example: After my dad purchased a new set of tires for the tractor, Mom got madder than heck at him. He had to buy her a new cook stove just to satisfy her anger. Sometimes he would work long hard hours, come home, and she would get mad at him for no good reason. We would be sitting around the dinner table and she would take his entire meal and dump it on his head.
You saw that?
Yeah. I will not put my mother down, but that is what happened in our household. As for my dad, he was not the type of person to whom you could sit down and talk with or blow off steam to, nor would he be sympathetic towards you if you had a problem.
My way of showing my parents I cared for them was to work and bring money home to help them. As I look back now, what is sad is that I wasn’t allowed to be a kid. I couldn’t be one. I just worked all the time. I began driving tractor and working in the field when I was six.
The happiest time of my childhood was from 1954-57, when we farmed near Kandiyohi. Dad was farming and milking, and I skipped a lot of school to stay home and work with him. One time, he fired a man he had hired. So Dad just told me to skip school and work in his place. School wasn’t important. Survival was most important, and to this day, I have survival instincts.
Did you have difficulty getting your schoolwork done?
I had a tough time in school. In later years, I found out I had dyslexia and attention deficit hyperactivity disorder. Also, I tested with an IQ of 76. I had to live knowing that and thinking I wasn’t as good as the next student. I tried making up for my perceived lack of intelligence by working harder. I felt the harder I worked, the more my parents would accept me.
Your father went through tough financial times in the late ‘50s.
The first time was March 7, 1957, when he lost everything. They had an auction. Then he purchased a farm by Brooten, Minnesota. On February 28, 1958, he lost everything again with that farm. So he lost everything twice within a year.
That must have destroyed your confidence.
Yeah, but yet Dad continued to work doing whatever he could find. He was only 44 after that and wasn’t the same person afterwards. I can relate to that somewhat because I’ve lost four bus contracts over the years. It’s like a death or a divorce. Back then, I couldn’t understand my dad’s feelings. After losing the farm, my mom and dad moved around and lived in rent-free homes—wherever they could find a cheap place. But I left home at a young age and am grateful for it.
Because of the atmosphere at home?
It’s because I needed to make money to support my parents. They didn’t have any.
You come from a poor family. You have struggled with dyslexia and ADHD—and you didn’t even know you had either growing up. Your father lost everything. What sort of a positive role model did you have after it all to give you the confidence to start a school bus company?
The Navy. I attribute much of who I am to military discipline, flying in a flight crew, knowing I could do things I never thought I could do, and the attitude and camaraderie I felt there. After all these years, the Navy is still one of the most important influences in my life. After getting out, I worked at a furnace factory for a year before being accepted to vocational school. But I had to have remedial night school for a year before starting because my high school grades had been so bad. I had to take algebra, physics, and geometry to get my aircraft mechanics license. Funny thing: When I went to vocational school, I earned A’s and B’s. When in high school, I flunked a lot of courses.
Why the difference?
For one, I was studying things I enjoyed. Also, Lois and I married about that time, and she gave me a great deal of encouragement. Lois has always been supportive. She was a graduate of what is now Minnesota State University.
What came in place for you to be able to buy your first bus company in August 1974, in St. Clair?
After vocational school, I worked for Northwest Airlines for two years as an airplane mechanic. I was laid off in 1970. To earn a living, I began driving a construction truck. In 1972, I landed another job with Ozark Airlines, but this time the union went on strike soon after. At that time, Lois’ uncle owned Manske Bus Service in Mankato—so we were familiar with the bus business. The person who helped me most was Ken Lenz, my brother-in-law, of Lenz Bus Service in Waseca.
About 1972, Lois and I decided to begin saving as much as possible in order to purchase a bus company. In December 1973, I met a Blue Bird bus salesman at a Minnesota State Bus Operators Association convention, who told me the St. Clair district was up for sale.
How did you save enough money as an airplane mechanic to purchase a bus company?
I worked three jobs, seven days a week. I worked at Firestone auto store changing tires, drove bus part-time, and was an airplane mechanic. My main goal in life was to own a small business. For one, I had to make good money. In 1970, our second daughter was born with severe cerebral palsy. The good Lord gave us those kids to care for to the best of our ability. We ended up having a second child with severe disabilities. Amber has Down syndrome, autism, and bipolar disorder. These kids were gifts from God. That’s the truth. Amber was born August 16, 1979.
What did you learn from raising children with disabilities that can be applied to your business?
Patience. With Amber, you can’t push her to do anything. You learn to go at her speed. With Leah and Amber, they required 24/7 care. We made sure they had the best medical treatment, and took them to church, and if possible, took them on vacations. Raising a disabled child can be hard on a marriage and family. You have to spend so much time with the disabled kids that sometimes you forget about the healthy ones.
One mistake I made: It was more important to me to be a business success than to spend time with my kids. Many times, I put business ahead of Lois and my family. I tell people in business not to do it. I don’t care how much money you can make doing it. Don’t do it. You never put business ahead of family. I regret having done it.
You have publicly said you won’t bid against an incumbent bus company owner in order to win a contract from a school board—unless, of course, another owner picks a fight with you first. You have built your business solely by buying companies that have willingly sold to you. Why not bid against others?
You just don’t do it. One reason: In general, a bus company owner has to make a substantial investment in buildings, buses, and employees. In my opinion, it’s not ethically right for someone to come in with a lower price and jeopardize that person’s livelihood.
The State of Minnesota has two ways for school districts to handle contracts coming up for renewal: quotations and sealed bids. Most are quotations. Sometimes a school board receiving a lower quotation will negotiate with the incumbent bus company owner and sometimes they won’t. The hope is that if you do a good job, a school board will negotiate with you before handing over the contract to another company.
Do you know of a situation when a school bus company’s contract came up for renewal and someone bid against them?
One fellow I know losing his contract wound up in a hospital psychiatric ward in Rochester. When you lose a contract, it’s like a death or divorce. You literally can put everything you have emotionally and financially into servicing a school district and you can lose it all. That’s the way the system works.
So you have seen this happen with people and you don’t want to put them through it because you know what it feels like?
I’ve lost four bus contracts. But we don’t quit. It’s just hard to get past. Right after, you ask yourself every day, Why did we lose it? People say, “Business is business.” But when you personally guarantee the loan to buy the buses, losing a contract suddenly becomes personal because you have personally guaranteed the loan. You can put everything you have on the line. Losing a contract can be tough.
Growing up the way I did has helped me survive the bus business. I know that if I pick myself up another company eventually will come up for sale. So I don’t quit after losing a contract. That attitude in part comes from having a supportive wife.
Personally, losing a contract—they say it’s like a death. Another thing helping me is that if I didn’t have faith in God I wouldn’t be able to be in this business. I could honestly see a guy losing a contract and going bankrupt and thinking about committing suicide. Especially if that was his only contract. I have been fortunate in having multiple contracts. But I could see a guy out there with only one bus company thinking about it.
It’s not like you can diversify, I guess.
The bus business isn’t like the local plumber or electrician who if he loses one job can right away bid another. We have one customer and one only—the school district. You have to please them to the best of your ability and give good service. Just because we are Palmer Bus Service doesn’t mean we are going to keep all our contracts.
About five years ago, amazingly, managers of most of your bus companies tried removing you from the day-to-day operations of Palmer Bus Service. They actually succeeded for a while. What did you learn from the experience?
I think the mistake I made years ago was in letting the managers take care of the checkbooks for their respective companies. I wanted them to feel and act as if they owned their particular company. Today, we have in-house payroll. One person pays all bills. We control everything out of North Mankato. From this experience, in terms of people in general, I have learned to love many, like some, and trust few.
So to connect the dots for our readers, what I hear you saying is perhaps you trusted some managers too much. After you lost control of your company, you went through an awfully dark period. How did you react?
I isolated myself for three months. I was depressed. I couldn’t understand how this could have happened. I asked the managers why they did it and they said it was my personality. Perhaps the managers didn’t have my best interests at heart.
The one thing I will say openly: They dragged me through all the dirt and muck and forced me to deal with it, but one thing I’m unforgiving about is they brought my wife into it. That is sacred ground. She had nothing to do with anything, and shouldn’t have been involved. They shouldn’t have brought her into it.
Your managers were saying you weren’t managing well.
When they confronted me that day, I felt I had two options. The first was getting up, walking toward the door and filing for bankruptcy. But I’m not a quitter. The biggest reason I didn’t quit was because of my family. The second option was to hide in the tall grass for a while, so to speak, and keep the company rolling until I had figured things out. As a father and husband, at a time like that, I had to show leadership.
So you did what they requested—for a while. You withdrew for a while to let someone else run the company.
I did that because of the contracts, because we are so public, and because I didn’t want to completely ruin the company. I had to choose this option to keep holding things together. I will never ever go through something like that again.
You went through a deep depression.
I went through major depression and had bleeding ulcers. But I wasn’t going to quit. To make changes to myself as a person, I decided to see a psychiatrist and it was the best decision I ever made. Dr. Robert Olson of Mankato Clinic is a good psychiatrist. From the first day I walked into his office to the present day I’m a better person. With my wife, his help, and God, I have progressed light years as a person.
What things did he bring out in you? What sort of changes did you make?
I learned I had acute paranoia, major depression, dyslexia, and attention deficit hyperactivity disorder. I also had mood swings. He worked with me for months getting me on the right medication. Today, I’m on the right ones and I do very well. I still see him about once every two months.
I’ve learned from him how to deal with people differently. I’m not ashamed I went to a psychiatrist. My family has been supportive. Many men won’t go because of pride, but if going can improve your family life and the people around you, why not? In life, I have had a heart attack, bypass surgery, and two bouts with cancer. I have also had mental challenges. Mental health professionals are there to help fix you just the same as a medical doctor. People should look at it that way. One day I just woke up, told Lois I was all screwed up, and I was going to fix it. And I did.
What is different now with you versus five or ten years ago?
Before I was far more talkative. Today, I’m more reserved. I keep matters more close to the vest and don’t volunteer much information. I deal with people in a respectful manner. If something seems to be bothering an employee, I have a better sense to walk up to them and say, Is there an issue? Is there a problem? What can we do to help you? I now have the ability to see things in a completely different light.
What happened to the managers who walked into your office that day to take over the company?
We have two left out of the ten.
Now you have 20 companies. So you have doubled your company size since taking your business back from the managers.
We have more than doubled. In part, I attribute the growth to my supportive family. They never put me down. Not once in any way have they put me down. Not once. Also, faith in God had a lot to do with it. I believed the crisis wasn’t going to last forever and I wasn’t about to quit. Also, and probably most of all, I credit really good managers and employees.
In the 1990s, the State of Minnesota changed the funding scheme for school bus reimbursement. What did that do to your business?
The State of Minnesota used to have a designated fund for transportation. In 1995, they lumped transportation in with a school district’s general fund, which meant we had to begin competing with teachers, custodians, and schoolbooks for the same dollars. It’s a lot tougher to get contracts when you are competing against everyone else.
Why did the legislature do that?
I could be wrong, but I think they did it because some districts had money built up in their transportation funds. Perhaps they thought by opening that up school districts could tap into another revenue source. That money could roll over into the general fund.
So now you’re competing with everyone else for money.
Just put yourself in a superintendent’s chair. If having to choose between funding transportation or buying a new book, superintendents will buy the book first almost every time. If sitting in a superintendent’s chair, I would probably do the same.
A couple years ago, an accident that one of your buses was in resulted in the death of four children.
It was in Cottonwood, Minnesota. A minivan driver broadsided our bus, which caused our bus to be hit by another vehicle traveling the other way. Four children died. To handle the crisis, I turned over all interaction with the national and local media to my attorney. Personally, I went to all the wakes and funerals. We started a scholarship in the school district. We did nothing wrong. The person driving the minivan was responsible for the accident.
How about you personally? Did this event begin to take over your life? In all your years of running school buses, this was the only time a child had died in one of your buses.
It was my worst nightmare. A day doesn’t go by I don’t think about it. Every time the telephone rings at home at night, I think about it. Just a couple weeks ago, one of our buildings in Barrett, Minnesota, burned to the ground. I received the call at 9:20 at night from my manager. When a manager calls you at night like that, I think, Oh my God. As it turned out, the fire wasn’t so bad because no one was hurt. We can replace the buses. The building burned down. We lost four buses and two minivans. As I was dragging myself up the road to be there the next day, I was thinking about how to approach those people in a positive fashion. How would I handle myself in a situation like that? It wasn’t the employees’ fault. At times like that, an owner has to show leadership and show those people you really care, that you really are supporting and behind them, and letting them know things will be all right.
They found no cause for the fire. We lost six vehicles, and yet didn’t miss a route or an out of town trip the next day. You tell me how many people could have had a shop burn down and the next morning have all their buses be on time?
One day, you’re going to pass your company on to two of your daughters. How are you preparing them? You’re 66.
I’m easing them into it. We talk about contracts. They have stock in several of the companies. They are both stay-at-home moms right now. But they will do more eventually. I have no intentions of retiring in the near future. When I do, they will be ready. Also, we hired a full-time CPA, Chris Champlin. I wish I could have hired him 30 years ago. He has done an exceptionally good job.
What did you do in the Navy?
VP2 was a patrol squadron, which was commissioned in 1943 and decommissioned in 1969. I was in the squadron from 1961-64. Our main job was to watch over Soviet subs going from their base toward the United States. The other thing we did was fly along the Russian coast using electronic countermeasures. Also, we flew to the Arctic Circle to help geologists check ice flow.
Do you still carry on a relationship with some of those men?
Oh yeah. I don’t really socialize with a lot of people. The best buddies I have are my Navy buddies. Joe, Wayne, Jim, Maynard, and others—these men I’ve known since 1961. We have kept our friendship going, and every other year we get together.
You trust them?
I trust them, and I love them. They are my brothers.
If you won’t bid against an incumbent bus service owner, how have you acquired so many bus companies?
Word of mouth. I tell other owners that when they get to retirement age to contact me if they want to sell. Not long ago, I received a letter from a bus contractor in Austin taking offers on her family’s company. After visiting her on appointment, we gave her an offer two weeks later. In August, she called to say she had accepted the offer, and I said “Okay” and hung up on her. (Laughter.) I didn’t believe her. I was in shock. This was Austin, and the company had 52 buses. I didn’t think we had a chance at it. The next day, I called her to apologize for hanging up. She started laughing.
Why were you so stunned?
I never thought we had a chance. I think seven other contractors were involved. Why us?
What was there about Palmer Bus Service that she liked?
She said we were very respectful. We had made an appointment rather than just barging in to see her. We were straightforward, honest, and upfront. She had heard we did a good job. Her family had owned Austin Transportation for 42 years. Sometimes buyers and sellers click.
You alluded to this before: The stress of this business seems to have led to your having a number of physical ailments over your lifetime. You have mentioned paranoia, depression, bleeding ulcers, etc.
I had prostate cancer in 1991, had my prostate removed, and nine months later the cancer returned. I went through radiation. I have been in and out of the hospital because of a number of surgeries. In 2001, I had a heart attack. In 2006, I had five bleeding ulcers and spent a week in the hospital. Two years ago, I had triple bypass surgery. The business is stressful.
When you lay down at bed at night, what do you worry about most?
I’m a perfectionist. Four things: The safety of the kids; that people will like their jobs; that employees will let me know what’s going on in the company; and that we’re providing a good service.
When you say you’re providing a “good” service, give an example.
To me, the key is having good drivers—next, good managers and people in the office to pay the bills and do the scheduling. Good service means not only doing a good job, but also having a good attitude. Also, the owner of a company should set a positive tone. These are areas in which my psychiatrist has really helped a lot. He has given me better insight. But the best decisions you can make are from the gut.
Getting to know you: Floyd Palmer
Born: July 15, 1943.
Education: Atwater High School, ‘61.
Past and present organizational involvement: Minnesota School Bus Operators Association, former board member; National School Bus Transportation Association, former board member; current president of the National Navy VP2 Association; vice chair of church council and president of St. Paul’s Lutheran of North Mankato; former city councilman of St. Clair; and American Legion St. Clair Post #475.