Henry Paetzel, manager, automotive fleet services, for Minneapolis-based General Mills, Inc., played an integral role in smoothing the transition of his 1,650-vehicle fleet to Wheels Inc., a fleet management company in Des Plaines, IL, over the past couple years.
It was also his knowledge and involvement in the industry and 36 years of experience and loyalty with the corporation that gave him the edge when he was presented with the Automotive Fleet 2004 Professional Fleet Manager of the Year Award, co-sponsored by Wheels Inc. and the Automotive Fleet and Leasing Association (AFLA), at the National Association of Fleet Administrators (NAFA) Fleet Management Institute (FMI) April 17-20 in Atlanta.
"I try to stay involved with the organizations. I was a panelist for the remarketing conference last January and was up for an officer position with AFLA last fall. I've got many years in the business and a lot of knowledge packed away, and I think maybe that helps," said Paetzel.
Fleet Manager of the Year
Paetzel was awarded a personal trophy and his name will be inscribed on a perpetual trophy with those of the 19 other Fleet Managers of the Year. In addition, a $3,000 scholarship, jointly funded by Automotive Fleet, Wheels Inc., and AFLA, will be given to the University of Minnesota's Carlson School of Management.
Paetzel was chosen from an initial field of 19 nominees, later narrowed to four finalists who included Brenda Davis, fleet manager for Baker Hughes; Scott Mayo, fleet director for Wendy's Inc.; and Jim McCarthy, director of vehicle management services for Siemens Shared Services.
"Brenda, Scott, Jim, and Henry are four outstanding finalists but unfortunately, there can only be one winner per year," says Stephen Levine, fleet manager, operations for Pfizer Pharmaceutical Co. and a judge on this year's panel.
"I've known Henry for many years and always found him to be quite helpful and sharing with his knowledge. Whenever there is a need for help, brainstorming for ideas or concepts, or creating a 'point-counter-point conversation,' Henry is always available. He is quite detail oriented and focused. When he delivers a response it is completely thought out. We may not have always agreed, but our conversations have always been worthwhile. Henry's integrity sets a superb example for our industry. He's a fine man who is well deserving of this honor."
Outside of fleet, Paetzel prides himself on his family, owning a 1972 Corvette big block roadster, and collecting auto memorabilia and Lionel trains.
Prior to winning this year's Fleet Manager of the Year Award, Paetzel was recognized with two GE Capital fleet productivity awards. He is also one of the 13 original members of the General Motors fleet sounding board, a member of NAFA's North-Central chapter (past chapter officer and current chapter board member), and an AFLA member and past officer.
Growing Up in the Fleet World
Paetzel has been in charge of fleet for 28 years. Additional responsibilities include managing the business traveler car-rental program - a shuttle service that moves employees between campus locations - and the employee auto-service center operation - a Firestone-like concept with an eight-bay garage, six gas pumps, and a car wash. Overseeing a staff of 13, Paetzel receives direct reports from the service center manager, fleet supervisor, executive garage attendants, and administrative assistant Linda Cantin, who has been with him for more than 28 years and is credited for much of his success. Paetzel also credits John Smith, director, transportation and employee services, and Carol Flom, nee Einan, Paetzel's fleet supervisor who transferred from Pillsbury.
Designated for salespeople and regional managers, the majority of Paetzel's fleet of General Motors vehicles includes the Chevrolet Impala Pontiac Grand Prix, Chevrolet Trailblazer, GMC Yukon, and Saab 9-5.
Upon graduating in 1967 with a B.S. in business from the University of Minnesota School of Business, Paetzel, a native of St. Paul, Minn., accepted a position with General Mills, a major food corporation that produces such brands as Betty Crocker and Cheerios.
In 1968, Paetzel began his career in the corporation's management-training program, which ultimately placed him in the transportation department to work on an automobile tracking system (at that time, the system used IBM cards).
In 1970, the fleet supervisor left the company for personal reasons and the then-manager of the transportation department, Jim Rowe, offered the position to Paetzel. At that time General Mills' primary fleet cars were the Ford Galaxie 500, Chevrolet Impala, and Plymouth Fury III. Fleet size was about 1,100 units and all vehicles were leased.
In the summer of 1970, Paetzel went to New York on his first business trip to meet the staff of the corporation's leasing company, LeasePlan International, and deliver new-car orders.
"Two years later, we moved to an owned fleet," remembers Paetzel. "We had suggested testing ownership, but our company's financial people said 'No, we would move to 100-percent ownership beginning with the 1972 model year.' To make the change, we began single-sourcing cars with Ford purchasing through a limited dealer network. The network was regional, and a dealer was selected based upon the ability to deliver cars to our drivers within the geographic area assigned and purchase the used cars on a trade-in basis. At that time, pricing averaged $50 to $75 more than the dealer's cost and trade-in was based on the AMR published value. The primary sales cat-was then upgraded to the Ford Ltd. Brougham (top-line model)."
In 1976, Paetzel was promoted to manager, automotive fleet services, and was responsible for the purchase, administration, and sale of company vehicles (fleet size was about 1,400 vehicles).
Throughout the '80s, General Mills acquired many subsidiary companies, including Parker Brothers (Monopoly), Kenner Products (original Star Wars toys), Lionel Trains, Eddie Bauer, Monet Jewelry, Lee Wards (handcraft items), Pennsylvania House and Kittenger (furniture), Lark Luggage, Foot-Joy, Red Lobster, Donruss (bubblegum), and Goodmark (Slim Jim products). Vehicles were furnished for all areas of the company.
In 1985, supervision of the employee automotive-service center was added to Paetzel's responsibilities, and in 1988, he assumed responsibility for the car-rental program for the business traveler. At that time, National Car Rental Company was the corporation's primary provider. Several years later, Paetzel switched to Avis under a single-source arrangement that is still in place today. In 1991, General Mills chose GE Capital as its single-sourced fleet-management company to provide leasing, maintenance management programs, and re-licensing and accident services.
The Pillsbury Acquisition
In 2001, the General Mills fleet was about 900 units, and was expected to almost double in size with the acquisition of Pillsbury. However, only about 500 vehicles were added to the fleet. The process of integrating the sales forces began with a net effect of reducing the fleet because, together, the two companies required a smaller sales force.
"The company position was 'Now that we've acquired Pillsbury it's every manager's responsibility to review any programs in place to determine whether or not the additional volume could create additional cost savings,' so we issued a request for proposal (RFP)," said Paetzel. "We then proceeded to give company cars to a new group of employees and we actually expanded our fleet," he said.
Though General Mills has purchased many smaller companies over the years, none has ever compared to its acquisition of Pillsbury, a company of almost the same size.
Turning to Wheels
In 2002, as a result of the RFP, Paetzel turned over his fleet program to Wheels Inc. He credits the smooth transition process to his ability to source car information directly to Wheels and to Mary Olson, regional sales manager who, with other Wheels team members, created a timeline indicating the responsibilities for both parties. This timeline and the ability of both parties to exceed deadlines resulted in a working transition that was up and running ahead of schedule.
Wheels provides maintenance, WEX fuel card, re-licensing, MVR checks, and accident services for General Mills.
"We look at it as a partnership. They provide complete management of the accident and maintenance processes, including notifying the insurance company, providing subrogation, if warranted, and policy adjustment claims," says Paetzel. He believes that fleet should be viewed as "all-encompassing." The objective is to keep costs down while providing a value to the company, which must determine how it wants fleet to function.
"For instance at General Mills, we have to provide a car for our employees with which to do business. The car has to be functional for them to do their job, but it also has to be cost effective," says Paetzel. "We use a car as a competitive aid in hiring new people. Therefore, we're going to look at the car differently than someone who is looking for pure transportation or utility. We believe that the car has to have perceived value to the employee and real value to the employer. We choose vehicles that allow us to give that perceived difference to our drivers while keeping the cost down for the corporation. This is all based on lifecycle costing.
"During this process we're constantly asking our management company to keep looking at our repair cost and accident expense. If you see anything that we could do to reduce those costs, bring them to our attention. That's just all part of the fleet review process. By doing quarterly reviews with our management company, we feel as though we're always in tune with what's happening. If there is something going on that's going to cost us some money, hopefully it will show up quickly so it can be addressed," says Paetzel.
Focus on Safety and Improvement
Driver safety is another fleet aspect that has improved over the past year.
"We recognized that we didn't have as strong a policy in place as other companies, and that there was some potential liability for the corporation that we wanted to be sure to address," says Paetzel. Motor vehicle record checks, which had been conducted upon hire, are now reviewed each time a driver receives a new car. The company also has a strict policy regarding DUI citations and at-fault accidents, requiring employee enrollment in a safe driving program and charging an insurance deductible for damages.
Replacing Vehicles Online
According to Paetzel, vehicles are typically replaced on average every two years and high-mileage vehicles are replaced annually. Lower-mileage vehicles - those driven less than 60,000 miles - are kept for three years. Average mileage on replaced cars is 46,000.
One of Paetzel's greatest accomplishments was converting to Wheels' Web-based direct-ordering process in which drivers order new vehicles online.
"Our policy for ordering vehicles online was a major change for us. It's easier for drivers and vehicles are delivered quicker," he says. "We order all of our vehicles in June for delivery in September, and we like to have them the very first day they are available."
Making the Model Fleet Manager
Several essential professional and personal qualities make up the successful fleet manager. Many previous award winners, including last year's recipient, Josie Sharp, possess these same qualities.
"I think knowledge of the business is crucial...and the business is the broad form of fleet....the interrelationship of the manufacturers, suppliers, management companies, and auctions," says Paetzel. "You have to have a conceptual understanding of what is totally involved in fleet. In my case, I work closely with the fleet-management company, which delivers everything for me. We have a great understanding of one another."
Paetzel offers advice to fleet managers to ensure a successful working relationship with their management companies.
- Set up a working partnership and understand the processes that are in place for each function.
- Agree upon benchmarking parameters to measure performance.
- Report accountability on a quarterly basis to ensure that you're meeting your task.
- Rely on your management company for advice.
What the Future Holds
Paetzel sums up his future goals for General Mills' fleet in one word - simplification.
"We want to try to get to a point in which the whole process of fleet management is simpler for the fleet and, from the driver's perspective, that having a company car is no different from having a computer. It's simply a tool that they have to use. We want to give them the best possible tool and allow them to use that tool with the least amount of effort. We're trying to streamline the whole process."
To simplify the entire fleet process. Paetzel is finding different way s of sourcing information. For example, Wheels formats the fleet's financial entry to fit General Mills' accounting system, minimizing the payment process. Paetzel hopes that further initiatives will help identify budget issues. "Last year, the used-car market was quite soft, and we were taking some heavier losses on car sales than we expected. We need to quickly identify trends like that," he says.
History of the Award
Created in 1985, the Professional Fleet Manager of the Year Award recognizes and honors an experienced and proficient fleet manager who has demonstrated special business acumen in developing and executing key management policies. Eligible nominees must be full-time fleet managers, control a company-owned or leased fleet of more than 100 trucks and cars combined, and recognized nationally among their peers for their unique abilities and accomplishments. A 26-member judging panel, representing all areas of fleet, determines the winner.
"What stands out in particular for me is Henry's professionalism and good nature," says Susan Miller, senior fleet manager, McDonald's Corp. and another judge on this year's panel.
"He has always promptly responded to any benchmarking or feedback requests I've made and has also actively sought feedback for his fleet and personal growth. Henry is very approachable and easy to talk to. He's one of those people you know will be honest and caring from the first time you meet him. I've lost track of all the years I've known Henry, but he has always been one of those fleet managers you look forward to seeing at conventions and other fleet events."