I suppose I should stop asking fleet managers the same question posed during the past few months. I'm human. When I don't get the right answer, my tendency is to discard the question. Okay, maybe you want to try it: ''What have you told your senior management about the accelerated costs that loom in the immediate future?"

Invariably, the retort is that management executives know that costs are bound to increase in spite of budget pressures. Or, when the budget is submitted for next year, there's plenty of time to discuss it. As an observer, I can only say that those kinds of reactions are shortsighted, represent poor communications, and are doing the company a serious disservice by ignoring reality.

What actually exists is a singular opportunity for the fleet manager to demonstrate leadership and understanding in his or her position. Relating the very real cost potentials for the five-year plan can alert executive management so they can prepare. They may even be able to influence the outcome to avoid the added burden by working in unison with you.

Every factory fleet department, the fleet management companies, and the fleet associations should deliver the message. Industry meetings should focus their theme or keynote address to identify the threat. Every fleet manager should vow to sense it and form a partnership with senior management to fight it or find an avenue to steer away from it.

What am I talking about? It's not Armageddon, but it's close. It's the dramatically increasing costs to operate and maintain your fleet in the years ahead.

Consider that if you are a "covered" fleet in a non-attainment area, you will be ordering 30 percent of your fleet vehicles with alternate fueled components in just over 50 months from now. Not only are you faced with substantial added acquisition costs, but higher fuel expense, possible fuel storage installations, ultimate greater losses in remarketing the used units, driver training, maintenance, and the larger interest costs on the additional investment. No one has yet figured out all the new exposed costs associated with compliance, but our September 1991 feature story. "Clean Air Act Amendments of 1990 Could Cost Fleets $43 Billion Plus." tagged them as "staggering."

Our new Clinton administration is responding to voters who have chosen "change" for the future. Without a regard to a multitude of hidden and related taxes coming, we are surely faced with a "BTU" energy tax that will be formidable plus probably 15 cents/gallon additional for the fuel of our choice. This starts adding up.

With the yen/dollar disparity, don't look for tough competition for the domestic vehicle makers. Don't expect domestics to hold the line on prices when their taxes are going up in a less competitive market. Just ask the rental companies what's happening.

Utility and government fleets will continue to face even tougher budgets. Commercial firms will only be able to write off 50 percent of their sales expenses. Federal and state income taxes will be increased. Those that voted for "change" will certainly get it: that's assured. As a result, every consumer will be hard hit with the incremental costs being passed on.

Learn to live with fewer "deals;" learn to cope with new, extraordinary expenses and higher taxes. Learn to expect 10 times the pressure to contain costs from your boss with fewer people to do the work. Get creative and communicate your progress.

Sound the alarm - your career future may depend on it!

 

About the author
Ed Bobit

Ed Bobit

Former Editor & Publisher

With more than 50 years in the fleet industry, Ed Bobit, former Automotive Fleet editor and publisher, reflected on issues affecting today’s fleets in his blog. He drew insight from his own experiences in the field and offered a perspective similar to that of a sports coach guiding his players.

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