Wheels Celebrates Its 75th Anniversary
The history of Wheels is intertwined with the history of the commercial fleet profession. The founding of Wheels in 1939 is widely acknowledged as the birth of the commercial fleet industry.
Jim Frank and Dan Frank celebrate the 75th anniversary of Wheels Inc.
In 1939, Wheels became the first automobile leasing and management company in the U.S. when it leased 75 vehicles to Petrolager, a pharmaceutical company. Since then, the family-owned business has grown to encompass sales approaching $3 billion per year, with nearly 300,000 vehicles on the road in North America, and more than 1 million vehicles in 41 countries around the world. The company was started by Zollie Frank and his brother-in-law Amund Schoen.
In 1974, Jim Frank, the son of Zollie Frank, became the second president of Wheels. In 1999, he was joined by his son, Dan Frank.
To learn more about the history of Wheels, its accomplishments, and its goals for the future, Automotive Fleet interviewed Jim Frank, CEO and president of Wheels, and separately Dan Frank, president of Wheels Services and CTO.
The following are excerpts from both interviews:
Jim Frank Looks Back
AF: Congratulations on your 75th anniversary. As the first fleet company to reach this milestone, you have the perspective of seeing how the industry has evolved from its inception to present. What are the top milestones that helped shape the fleet industry by decade, starting with the 1950s to present?
J. FRANK: It starts even before the 1950s:
1930s: The fleet leasing and management industry is founded when Wheels Inc. leased 75 vehicles to Petrolager at an all-in (everything included except gasoline and oil) fixed price of $45 per month and a 12-month replacement.
1940s: No new vehicles were produced during the World War II years and Wheels demonstrated the flexibility and creativity for which the industry had become famous by purchasing used vehicles and providing creative solutions to maintaining existing vehicles for clients. After the war, fleet allocation and close factory relationships, carefully nurtured, allowed Wheels to obtain new vehicles for clients who were anxious to ramp up peace-time operations.
1950s: Working with the OEMs, Wheels developed the new concept of drop-shipping fleet vehicles. This innovation replaced regional purchasing and over-the-road deliveries, ultimately laying the ground work for the most cost-efficient and highest-quality method of vehicle procurement anywhere in the world. Initial resistance by some lessors dissipated rapidly as the effectiveness of the drop-shipment system became obvious, and it is now the universal solution in the U.S., envied by others throughout the world.
The introduction by PHH of the first cost-plus lease laid the foundation for the explosive growth of the industry. Ideally structured for the North American market, open-end/cost-plus leasing provides the most cost-efficient and flexible solution for business fleet for the vast majority of clients. Wheels consummated its first cost-plus lease with Pfizer in 1953, and it now represents 97 percent of our portfolio.
One interesting side note is that the introduction of cost-plus, rather than fixed-price, leasing led to the development of large and sophisticated fleet management departments at our clients. Without fixed, guaranteed costs, the users felt the need to develop in-house expertise to control expenses of the fleet.
1960s: Clearly, the introduction of computers to the industry was the highlight of the 1960s. Sophisticated automation allowed the fleet management industry to efficiently increase in scale and scope, resulting in improved quality, lower cost of operation, increased purchasing power, and the beginning of the Information Age.
1970s: The energy crises of 1973 and 1979 totally changed the automotive and fleet management environment. Previously, a fleet selector consisted of an eight-cylinder Chevrolet Impala, Ford G500, or Plymouth Fury. With fuel scarce and more expensive, the science of vehicle selection became paramount and vehicle selectors became much more diverse. The expertise of the fleet manager became much more important as calculation of TCO, with all of its many dimensions, became relevant. And, it became increasingly important to match vehicle capabilities to the business requirements.
This is also the era in which automation and information technology began to bloom as fleet management companies learned to leverage the power of computers for information and decision management, not simply operating efficiency.
The 1970s also saw the birth of sophisticated outsourcing of maintenance management by clients to leasing companies. At the request of the Chicago and Northwestern Railroad, Wheels built our first cost-plus maintenance management program, the beginning of a move to outsourcing that has ultimately transformed the fleet management business.