Highlights Of NAFA Convention

The National Association of Fleet Administrators at­tracted a record turnout at its March convention in Detroit. And all in attendance agreed that it was the best meeting in the association's six year history.

More than 350 history fleet administrators and guests registered for the 1963 convention, nearly 100 more than attended last year's meeting.

Walter H. Langseder, fleet manager for Thomas J. Lipton Co. and outgoing NAFA president, called the record turnout "a tribute to the growing stature of the fleet administrator."

As usual, the NAFA convention proved to be a working meeting. Those in attendance sat in on a total of II information sessions plus one roundtable discussion. Subjects ranged from safety engineering to personnel problems to fleet insurance.

One of the highlights of the meeting was an analysis by Roy Rose, assistant manager of the Asplundih Tree Expert Co. Rose, on the basis of a ques­tionnaire sent to NAFA members, outlined some of the current trends in fleet administration.

Rose said that one of the problems confronting the fleet administrator today is that "not too many people, including some top management, are familiar with the size and scope" of the administrator's position.

"The variety of duties and responsibilities need more appreciation and recognition," Rose said. "Not only the prestige within each company needs build­ing, but the prestige and recognition of our important organization."

800 Car Fleet Is Average

Rose said that 50 NAFA members responded to the questionnaire. Those answering were responsible for a total of 39,383 cars. The individual fleets varied in size from one below 100 to five over 2,000 with the average size just below 800 cars. Complete company ownership was reported by 60 per cent of the respondents while 23 per cent said they had both company ownership and leased vehicles in their fleet. The remaining 17 per cent used leased cars exclusively.

A total of 153 employees were needed to handle the 39,000-plus cars shown in the survey. Fleets with more than 400 cars generally had assistant fleet managers while four of the larger fleets listed two or three assistants.

Rose said the survey clearly indicated that one of the most important responsibilities of the fleet man­ager is the purchase of cars. Checking of dealer in­voices was the most frequently reported item with issuance of purchase orders following closely behind.

"Considering the remote nature of our fleets we can understand why about 20 per cent less reported the function of negotiation of auto purchase and sales," Rose explained. "Obviously many remote field drivers do such negotiation and the purchase order and payment remain in the fleet department as the control factor."

On the subject of warranties, Rose said the survey showed that 90 per cent of the respondents consider the preparation of claims against factories and dealers a major function of fleet management.

"In my 15 years' experience in the field I have found this to be a serious responsibility and often a problem," Rose related. "The outposts of our re­mote fleets are often considered as a single unit or some out-of-towner by local dealers and service gar­ages.

"Too often I have seen what I call 'sucker' charges -extra high bills, little or no discounts on parts and other indications of an attitude 'oh, this is a big outfit from some other city and they have plenty of money so soak them;" Rose continued. "Fortunately, when drivers use authorized or reputable dealers this can usually be corrected with a few letters or a call to the fleet representative in our home office area."

Rose said that he knows of one fleet administrator who changed makes "of a sizeable part of his fleet because of repeated instances of jacked up charges."

"Here is a value of NAFA," Rose concluded. "As an individual fleet can demand better service and warranty because of the size of his fleet, the fleet manager combined in an organization such as ours can carry this idea right up to the manufacturers themselves."

Studebaker Disc Brakes

John Duncan, national fleet manager for Studebaker Corp., outlined his company's belief that disc brakes have the potential of becoming universally used in the auto industry. Currently Studebaker is the only automaker offering disc brakes.  He said, however, that it will be some  time before  disc  brakes are universally used, citing three reasons:

1.  American brake companies are not tooled for capacity production of disc units.

2.  The cost factor could increase; the base price of the car to the purchaser at a time when most auto manufacturers are struggling to hold the price line.

3.  Even if disc brakes are offered as an extra cost option, the purchaser must pay for the additional cost of power brakes.

Explaining the function of disc brakes, Duncan said under the present system, it is necessary to make use of a power actuator to reduce the pedal pressure involved with discs.

In the disc brake system, the wheel drum is re­placed by a metal disc which is squeezed by two pads of brake lining material held in a caliper or metal clamp. The pads are actuated by hydraulic cylinders.

These spots, or friction pads as engineers call them, arc much easier to replace than the linings of drum brakes. In fact, the pads can be replaced simply by removing the wheel and lining retainer clip, Duncan said.

The disc brake also offers more effective stopping power than the conventional drum and shoe brake. The life of pad materials is comparable to that of the lining on drum shoe brakes.

"Repeated hard braking, as encountered in high speed expressway or mountain driving, will not pro­duce undesirable loss of braking power and "hard" pedal, a condition referred to by brake engineers as "fade", Duncan said. "Studebaker fade tests had to be drastically increased in severity to determine the limitations of the disc brake."

The simple, rugged construction of the disc brake also provides an excellent pedal initial reserve, which is maintained under the most demanding brake usage. As conventional drum and shoe brakes are heated, clue to severe usage or high speed stops, the drums expand and the shoes must travel farther, which means the pedal throw is longer.

Brake drums can heat and expand to the point where no additional braking is available. When the disc expands due to heat, however, it becomes slightly thicker. The pedal reserve, therefore, is not reduced with the disc brake Duncan continued.

"A comparison test of drum and disc brake cars made by our engineers recently showed the superior­ity of discs. All stops were made from speeds of 65 MPH at 30 second intervals. On the 13th stop, the drum-braked ear took 354 feet to come to halt, whereas the disc-braked car stopped in 250 feet. Tests were halted on the drum-braked car after 13 consecutive stops because brake damage was occurring. But the disc-braked car continued through a total of 21 stops, and made the 21st stop in 257 feet, compared with 230 feet required for the first stop. Cars were of comparable weight and used the same driver."

Disc brakes also maintain their effectiveness re­gardless of the presence of water in the brake. No longer is it necessary to "drag" the brakes during and after passing through deep water, in order to restore the brakes to a safe operating condition.

The caliper disc brake, coupled with a power assist, produces an unexcelled "feel" of the brake regardless of speed or stopping rate. With disc brakes the power unit can be calibrated to require much less driver skill to avoid skid and the disastrous loss of control which can result from skid in emergency situations. The excellent feel of the skid point cannot be obtained with conventional drum and shoe brakes.

Duncan said the popularity of the brake with U. S. ear buyers is noted in the fact that 40 percent of Studebaker's 1963 Hawks are being equipped with disc brakes. The new unit also is being ordered by about 14 percent of Studebaker Lark buyers.

"Most of you have found it advisable to spend an extra $75 for a fresh air heater to keep your drivers warm," Duncan said. "Many spend $180-$200 for an automatic transmission for driver convenience and $75 for a radio to keep drivers contented. I submit that you might wish to spend less than $100 for disc brakes to keep drivers alive.

Vehicle Leasing

On the subject of leasing, John A. Lovato, district sales manager for Service Leasing Corp., told the group that it has become important for   everyone connected with fleet operations to "become better versed in the analysis, comparison and selection, if called for, of a leasing program."

Lovato outlined the three basic types of leases being offered today-the maintenance lease, the non-maintenance lease and the finance lease-noting that over the past 10 years maintenance leases "have become more restricted" and as a result the larger fleets have shied away from them.

According to Lovato, the full maintenance lease is best for those fleets which feel they are not large enough "to spread the risk" on certain extra costs.

"If a fleet feels that it is large enough, it can choose between a finance lease and company ownership, since the two are akin to each other in terms of risk," Lovato said.

Referring to the non-maintenance lease, Lovato said that there are "considerably less" ears under this type of lease because "if you're going to have someone else assume the risk, let them assume it all"

"The finance lease is enjoying greater acceptabil­ity," Lovato said.

Under the finance lease, the client is responsible for depreciation, maintenance and insurance. The leasing company buys and sells vehicles for the cli­ents and offers specified administrative services. The client is billed on the basis of a reserve for deprecia­tion which generally runs 2 or 2 1/2 per cent a month plus a year end charge. When the units are sold there is a final accounting whereby the client is either credited or debited the difference in sale price versus the remaining book value.

Before entering into a finance lease, Lovato said that a fleet should check out the leasing company in order to determine the quality of service.

A check should be made with a leasing company's customers, Lovato suggested, to determine if its serv­ices have been satisfactory. The number of franchised dealers operating under agreements with a leasing company provides a good indication of service from a delivery and maintenance standpoint. A large num­ber of dealers will also insure minimum delivery costs if any.

Lovato also touched on the methods used in com­puting total leasing costs based on the lessor's quoted rates.

First, he said, determine the amount of depreciation reserve which would be set aside each month by the leasing company. This can be expressed in percentage figures ranging from 1%% to 3% or more per month, depending on the type of vehicle and its usage.

The second step would be the cost of the manage­ment charge. This may be expressed in terms of per­centage only; as a combination of percentage and dol­lars per month; or in dollars per month only.

"It is important to remember that this cost will be incidental to the total cost of operating your fleet, he said." Greater consideration, therefore, should be giv­en to all of the factors involved in the analysis.

The next step is to determine the base price of the auto upon which the rental rate would be predicated. Analyze the method used in developing this amount by obtaining an itemized cost of the vehicle delivered to a particular location. The object of this is to deter­mine the exact amount paid for an auto over the dealer's invoice cost.

"When the exact amount paid over invoice has been found, you should then establish who is receiving this amount, he said." If the lessor is receiving a portion of the amount paid over invoice, this amount should be pro-rated on a monthly basis over the length of time you expect to keep the car and added to the monthly management charge."

If the amount paid over invoice is excessive, this will result in an unrealistic book value at the time of replacement.

"I would say that the most desirable arrangement is one where the amount paid over invoice is realistic and fair to the dealer. An inflated new car cost serves no useful purpose for the dealer, client or leasing company," he continued.

If the leasing company charges a buying fee, this fee should be pro-rated on a monthly basis over the length of time you expect to keep the car and added to the monthly management charge. If the lessor re­quires a selling fee, it too should be treated in the same manner.

"We should then determine the method of final ac­counting at the time of sale," he said. "If the sales price exceeds the book value, does the lessee receive this excess or must it be shared with the lessor in the latter case, does the lessor also participate in any loss?

"Next we should determine whether there is a cost control service available as a regular part of the leas­ing company's program and exactly what the service provides. The cost of complete expense control serv­ice should generally run approximately $1 per month per car. All the necessary forms should be furnished at no charge."

"You may want to investigate the possibility of any conflicts of interest on the part of the leasing company. Dealers operating leasing companies may be inclined to push their particular product. Those leasing com­panies which are financed or operated by manufac­turers could well do the same thing. If the leasing company is heavily engaged in full maintenance leas­ing, you may want to investigate whether or not used cars are being packaged for sale. More specifically, does the leasing company sell finance leased cars along with their own maintenance leased cars."

FLEET SAFETY

Bernard R. Caldwell, director of the Traffic Insti­tute at Northwestern University, told the fleet men that the proper functioning of a fleet administrator in the safety field can save a company dollars as well as time and trouble.

Unfortunately, Caldwell said, many top manage­ments fail to give safety their attention until accumu­lated costs of accidents "explode in red ink on the loss side of the ledger."

"When fleet safety programs are being discussed, many managements know the music but few of them know the words," Caldwell said. Too often, he said, fleet accident prevention is given a low priority among problems competing for management's attention.

Some of the blame for lack of safety programs might be placed directly on the shoulders of the fleet administrator, Caldwell said.

"Chief executives are not always fully aware of vehicle-use hazards and the possibility of accidents prior to the time accidents occur," Caldwell said. "One reason for this is traceable to the fleet super­visor who is so concerned with mechanical aspects to transportation lie neglects his important responsibility as a staff advisor."

Caldwell told the fleet administrators that fleet safety "is a major area of business activity requiring the same positive direction and control provided other functions of activities by management policy." Effective fleet safety, he continued, can be developed only from a plan that centers responsibility and that provides an adequate system for communicating es­sential information on progress and problems.

He emphasized that fleet safety affects a com­pany's public image, the availability of its products and services and the morale of its employees-to say nothing of profits.

He urged the fleet men to give maximum time and effort to traffic safety, in both public and company aspects.

"Yours is a service that can reduce compensation claims, preserve the skills of valued employees, elim­inate waste of resources, help prevent unfavorable publicity for a company and, most important, create a safe traffic environment for employees and citizens alike," he said.