The Car and Truck Fleet and Leasing Management Magazine

Why We Constantly Need to Improve!!

May 2004, by Ed Bobit - Also by this author

It is not enough to aim, you must hit.-Italian Proverb

To achieve great things we must live as if we were never going to die.-Vauvenargues

Now that it's all over, what did you really do yesterday that's worth mentioning?-Coleman Cox

In back of every achievement is a proud wife and a surprised mother- in- law.-Brooks Hays

 

Too often we are all saddened by one of our industry friends being resent into the real world these days. And just maybe, they aren't as prepared as they should have been.

Oh, American business is still hot on the merger and acquisition kick, and every COO and CFO wants to reduce head count, so the so-called "retirement packages" abound. Regretfully, some of these unfortunate people didn't stay current or have the internal motivation to "improve."

We manage a publishing business around here, but the new guard has now renamed it a "Business Media" company to make sure our profile is all-inclusive and "modern." Probably an improvement.

When I look around at our associates, and it's in our Mission and Value Statements, our workforce is our major asset. We don't care whether they are a man or woman, young or old, or whatever creed, religion, or lifestyle they are. If they are effective, decent, and regularly improve in accomplishments, the last thing we want is to lose them.

The fleet manager community also needs to conduct itself with a positive, professional, and improving attitude and execution of their skills. One might say it's critical for survival.

So how can fleet managers improve? Certainly by continued education, experience, networking, and understanding the company's mission and policies. Then taking those talents and applying them for savings and efficiencies.

Specifically, you need to zero in with full knowledge of the now-popular front-wheel drive (FWD) versus rear-wheel drive (RWD). Also there's continuing saga of what's happening to residuals in light of even higher incentives and factory price increases.

I won't try to give you 101A on FWD versus RWD, but you should dig into it now that both GM and Chrysler are pushing the old concept with some new entries. Plus, there's new engineering, new tires, new stabilizing innovation, etc. which makes ii all the more interesting. Of course, Ford never really left making the RWD for fleets. Just don't miss the new rationale; it'll be revealing and fun to listen.

On residuals, the big news, if you care at all about depreciation and the huge cost to your company at replacement lime, is the new "Five Star System" that Automotive Lease Guide (ALG) has developed. It's important because (and basically for the first lime) it's based on transaction prices rather than the old MSRP variety.

Why is it important? Because this new reporting system reflects what fleets and consumers actually pay after incentives (if "CAP" is about equal to retail). I'm also assuming that my friend, Raj Sundaram, president of ALG. also takes into account that in the '03 model year, one factory actually had at least eight price increases. This week I saw a report that said another factory has already had five increases with the '04s.

The price adjustments just could be supporting the higher incentives that reached an all-time high in February with no sign of letting up.

When John Larson, executive director, finance, at GM is quoted as highly in favor of the transaction-based residual estimates for values expected in three years, well, I know it's a step in the right direction. Other automotive leaders also support the methodology.

So, there are a few things to get busy with. Others are surely the safety-related ones, i.e. hands-free in-car cell use policies, the need for back-up alarms, and finding a way for continuing driver safely education when budgets are tight.

Get with it! Improve, or your company may find a way to get it done without you.

 

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