Retired Fleet Veteran Foresees Shrinking Fleets
The first vehicle George Argueta ordered as a new fleet manager for Celanese Corp. in 1965 was a 1966 Chevrolet Impala. The capitalized cost for the car, which featured automatic power steering, power brakes, and air conditioning, was less than $3,000.
Argueta, who retired this year from insurance claims administration company Corporate Claims Management (CCM) after more than 50 years in the fleet business, noted that if a fleet vehicle today gets in a collision, the repair cost alone would be about the same as the overall purchase price of that 1966 Impala.
“So that gives you sort of a timespan to how different it was in 1966, or 1965 in that case,” Argueta said, adding that fleets did not even use computers, the internet, cell phones, or programs such as maintenance management in those days. “You were attached to a desk with a landline phone and you ran the fleet from that phone. In those days, we talked to our fleet people. I was strictly a hands-on manager, as were most fleet managers in those days.”
Fleet vehicle quality is another aspect of the business that has changed for the better. Argueta says the need for a new transmission on a vehicle was not uncommon in the second year of the lease. He remembers a transmission failure rate of 10% to 12% in the second year. Vehicles were warrantied for 12 months or 12,000 miles, compared to an almost unlimited powertrain warranty today. A set of tires lasted about 20,000 miles. He recently talked to a relative who replaced his vehicle tires with 72,000 miles on them.
Managing a fleet was more challenging, and fun, in earlier days, Argueta said.
Today, it’s much more challenging than fun. Back then, a fleet manager managed the fleet and the function. Few manage the fleet anymore. They just manage the function, he said.
What was more fun about managing the fleet in those days? “Just the challenge of it. You talked to your drivers, you had to learn more about the automobiles, you had to learn about the transmissions, and you made deals with AAMCO and Lee Myles [Transmissions], because you replaced so many transmissions in those days. Nowadays, it’s unheard of to change a transmission.”
Argueta circa 1982.
Those early days posed much more of a paperwork challenge, as well. Argueta remembers having to turn in thousands of drivers’ fuel receipts to the accounting department. “Today, you sign up with Wright Express or one of the other gas companies and you send your bill once a month.”
Other changes he has seen include the shrinking of fleet departments, and with that, a reduction in their influence. Fleet departments of four to six people were the norm back then. Nowadays, a company is lucky to even have a fleet department, he said. What used to be autonomous fleet departments are now being managed by the finance or human resources department. Fleet managers have less impact on decision-making.
“In the earlier days, the fleet manager made a number of decisions as to who to use, when to use them, what cars to order, and how to order them,” Argueta said. Now the finance or other department dictates those decisions to the fleet manager. “So I’ve seen the metamorphosis of the fleet team to a different type of animal than it was 40 years ago.”
He predicts a shrinking of the size of sales fleets, and a continuation of fleet departments’ decline in influence, in the future.
“With the advent of electronics, the internet, and phones today, salespeople are much more efficient and effective than in our day. A territory that you needed five to six salespeople to cover, nowadays they can do it with one, two, or three at the most. I think sales fleets are going to diminish in size,” he said. “Service fleets, I think, will remain the same, only because I think it’s the nature of the beast that if you’re delivering a product, you’ve got to deliver the product. Electronics and the internet have made the salesperson much more effective than he was years ago. So you’ll need less of the sales type of people than you had in the past.
“It has been a great ride during my 50-plus years in the fleet industry. I will forever cherish all the friendships I have developed during this journey. The fleet industry is still a terrific workplace with wonderful people, I will miss it and all my friends very much.”