Roundtable: Fleet and Top Management

In many ways, the success of today's fleet administrator depends on his or her status as a professional in the company's management hierarchy. Fleet administrators who have the car of senior management not only enforce but often formulate fleet policy. They're respected by automotive suppliers, and highly regarded by those who drive the company cars.

Without such professional status, a manager's effectiveness is likely to be limited.

How does a fleet administrator go about attaining-and holding on to-meaningful management authority? To find out Automotive Fleet recently put together a roundtable discussion by three fleet managers discussion by three fleet managers who epitomize the word "professional," They are: Don Benson, manger of administrative services for the Church of Jesus Christ of Latter-Day Saints in Salt Lake City, UT; Donald Dennler, vice president and general manager of fleet operations for the Bank of America in San Francisco, CA; and Debbie Donske, fleet manger, traffic and transportation for Ingersoll-Rand of Piscataway, NJ.

We began our discussion by asking each to describe their fleets...

 

Benson: We have 7,500 vehicles located in 64 countries. Fifty-two hundred of them are in the U.S. and Canada, and 2,300 are located internationally. We actually have several fleet divisions. Forty-two hundred of our vehicles are proselyting vehicles for our missionary effort. The balance are placed in church education systems, physical facilities, and our welfare programs. Then we have a small pool of vehicles for our headquarters executives.

For our proselyting cars-and this is on a no-choice basis from the standpoint of the drivers-we have the Chrysler K-car, Ford Tempo, and Chevy Cavalier. Our department vehicles would be the Celebrity, Caravelle, and LTD. Our executive fleet includes the Caprice, Crown Victoria, or Buick Century Ltd. We own all of our vehicles.

Dennler: Our fleet size is right at 2,500 vehicles, all of them in California. The predominant body size is mid-size, although we do have a lot of station wagons, vans, and pickups. They are all company owned.

At Bank of American, people with the bank do not get cars; rather, jobs get cars. Take our courier service, for example. We have 1,000 bank branches, and each one has to move mail, checks, and registers between the branches and our data centers. So our courier department is our biggest vehicle user. Our second largest user is the mechanical department: the people with the tools in their cars to go out and fix adding machines, typewriters, computers, and banking machines. The vehicles are assigned to fill these needs, not to individuals per se.

Donske: Ingersoll-Rand is a heavy industrial manufacturer with divisions and branches nationwide. We manufacture compressors, rock drills, oil field equipment, mining products, and so forth. We have approximately 1,300 automobiles and about 700 light-duty trucks. Our automobiles are predominantly midsize. All of our vehicles are leased.

Basically, all of our salespeople are eligible for a company automobile. If their job requires it, the other option would be a light-duty pickup truck. The majority of our servicepeople operate light-duty trucks.

AF: What training did each of you receive for fleet management?

Donske: The formal training I've received has been through the seminars and fleet management education programs offered by the National Association of Fleet Administrators. The rest of my training has been actual "hands on" experience. I started with Ingersoll-Rand as a fleet clerk, auditing the vehicle expense reports, and gradually assumed jobs with greater responsibility.

Three years ago, Ingersoll-Rand transferred the fleet operation from Los Angeles to New Jersey, and, at that time, they offered me the position of fleet administrator. I was promoted to fleet manager last March.

Benson: I have a background in the petroleum industry, where I was involved primarily in marketing. But for some reason, the industry's vehicle programs were quite fascinating to me, so I had a tendency to nose around and find out what they were doing and how they were doing it. I always asked, 'If I was doing that job, how would I do it differently?'

Later, when we had an opportunity to get involved in our own oil company, I placed myself in charge of all the firm's automobiles and trucks. Even though the fleet wasn't big, I soon realized that the basic problems are the same regardless of a fleet's size. In other words, it's just as hard to take care of a 20-car fleet in many senses as it is to take care of something considerably larger.

Still later, I was asked to become involved with the Church as a negotiating agent. One of my responsibilities was to acquire the church vehicles, so that gave me a pretty good insight into the fleet function. Then I was involved in negotiating maintenance contracts with major leasing organizations, which provided even more back-ground. Then I had limited involvement with the Automotive Fleet and Leasing Association and extensive involvement with NAFA and also the American Management Association, both as a participant and a trainer. This provided me with a background and understanding of the fleet business. Along with other responsibilities, I've been a hands-on fleet manager for the last five years.

Dennler: Actually, I went into banking to get away from cars. And I say that because I grew up in the auto industry: working in service stations, garages, parts stores; selling new cars. My dad had his own businesses, and they just kept expanding. But I decided in college that all of that wasn't really for me.

So I went into banking and ended up in the administrative side, doing research. But then the man who is now my boss asked me to go in and look at the automotive department, because they were experiencing a lot of problems. I was to make some recommendations as to whether we should even have such a department. I made a lot of recommendations, and he conned me into taking over the department. I've been there almost seven years now.

AF: To whom do you report, and what are your responsibilities like?

Dennler: I report to the head of Corporate Services for the bank, and he in turn reports to the chairman of the board. So I have a very short ladder to climb in terms of getting things done. I'm responsible for four departments within the bank. We have four maintenance garages, and a total of six fueling facilities. I have 58 people who work for me including mechanics, chauffeurs, and clerical staff. Actually, the bulk of my time is spent controlling and evaluating various programs we have under consideration. We are very much into experimental programs at Bank of America-everything from alternative fuels to tires. Then, of course, a lot of my time is spent on budgeting, personnel issues, and reviewing the whole department.

Donske: I report directly to the manger of Traffic and Transportation. He, in turn, reports to the director of Traffic and Transportation at our corporate headquarters. My basic job is developing and then enforcing corporate fleet policy. I have responsibility for the entire fleet and all its operations.

I have one assistant, and between us we handle the entire fleet operations. We do all of our vehicle replacement through mileage projection. I also oversee vehicle disposal. In addition, I assist upper management with our lease/lessor negotiations. I also maintain a working relationship with the auto manufacturers. My day-to-day work consists of coordinating all those activities. Most of the time I'm on the phone with our people in the field, coordinating, transferring vehicles, and the like.

AF: Isn't that a pretty heavy burden for two people?

Donske: As I say, we're both on the phone a lot. We're also on a maintenance program with our leasing company, so that eases the burden too.

Benson: I report to the director of Administrative and International Services. I am the manger of Administrative Services, which -in addition to the fleet responsibility- includes our food service operations, catering and vending. My job is enjoyable, and I have a very adequate staff to assist me.

For our fleet operations, we have the U.S. and Canada divided into three regions. Each of those regions has a manger with full responsibility for the vehicles within his geographic area.

For acquisition, one of those three regional managers works very closely with our purchasing department. Once we specify the automobile that we wish to acquire Purchasing actually negotiates with the dealers we feel most comfortable with. For maintenance, another of the three mangers is additionally in charge of all our major maintenance responsibilities. The third regional manager has full charge of safety training.

We set it up in this manner because I don't think that any one person, sitting isolated in an office somewhere, can really keep with an industry that is as fast-paced as ours. Things change so rapidly that you have to become a total, hands-on kind of student to know and understand how the market functions. Therefore, we have these three regional mangers that I depend very heavily on. Additionally, we have an office staff that is highly professional and very qualified.

AF: What percentage of your time is open on fleet?

Benson: About 80 percent. I have other responsibilities, but the fleet is growing at such a rapid rate that it takes most all of my time. The international fleet operations are really quite complex because every country has its own vehicle laws. Each time you cross a border, it's a completely new transaction. Add to that the differences in currency values and inflation, and you have a very complicated vehicle process.

AF: How do your budgets compare with other departments in your firms? Do you feel that you're adequately recognized?

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Donske: We do all of the fleet accounting at our headquarters in Piscataway, NJ. Then all of these costs are charged back to the individual divisions and branches. Because each individual branch is a profit and loss center, they have to actually budget their fleet costs for themselves. Of course, branch and division managers are very concerned with fleet costs, and as I said I'm on the phone with them quite often. I'm usually explaining what certain charges are for how they're being charged, that kind of thing. White the fleet department is sometimes ignored, basically the company knows that we are here, and we are recognized.

Dennler: Even when you're ignored-that's a form of recognition.

Donske: That's right. Upper management sometimes has a tendency to assign vehicles when they should not be assigned. They'll say, 'Okay, you can keep your car.' They might say that even though corporate policy does not allow it. When this happens, we are ignored. They never ask us, 'Is this person eligible for a company car?' They tell us, 'He can have a car.' When we say, 'No, his job does not qualify him for a car,' a conflict sometimes ensues.

Dennler: Fleet is definitely recognized at the Bank of America. The automotive area is very important to my current boss because we are doing so many different things. As a result, he pays a lot of attention to us.

In terms of budgeting, we really haven't had that much of a problem recently. Much of that is probably due to the increase in automotive costs we've all experienced over the last few years. Think about it: Back in '78 or '79, you could still get a car for $3,000, and gas was less than 50 cents a gallon. It wasn't until about '79 or '80 - when prices began to rise - that most companies began to pay any attention to their fleets at all.

All of a sudden, people started looking at the budget and saying, 'Why is that up 300 percent?' They're not always looking at the numbers, you see; they're looking mostly at variances in percentages. That's when we really began to be recognized. And that's when we had to dig in and find ways to control our costs. That's one reason we started doing more of our own maintenance.

If you take depreciation out of our budget, we have only increased expenses by three percent a year in each of the last four years. That kind of statistic helps to give us more recognition, too.

Donske: I agree with Don about price increases bringing a great deal of added recognition to the fleet department. In the past, I think, upper management didn't really realize how much we do control in terms of vehicle cost and operating costs. Admittedly, in '77 or '78, fleet-costs were still relatively small in comparison to the overall corporate budget. But today costs are much greater, and now they're listening to us.

Benson: When I accepted this responsibility, my duties were clearly outlined: we were to make substantial savings in such areas as acquisition and maintenance, operating costs, resale programs and safety. To do that, we structured and identified the status of our programs in each of those different categories, and we used a benchmark for periodic updates and comparisons. As our abilities and our cost-effectiveness have continued to improve-well beyond what we originally anticipated - acceptance and recognition of our fleet program have expanded as well.

This was accomplished through the development of a vehicle review committee set up outside the department of International and Administrative Services. This committee is composed of major department heads of the church as well as ecclesiastical leadership. Thus, when we go through the reporting process to the Vehicle Review Committee, vehicle program knowledge is disseminated to most all departments in the church. As a result, our recognition is exceptional.

AF: What have your experiences been in the area of major policy recommendations?

Benson: We have had a very positive response. Here's an example: Our records indicated that we should be driving import automobiles. Therefore, that idea was presented through our group to the Vehicle Review Committee. We gained their total support; however, they said that this recommendation would first have to go to a higher organization. So the presentation was made to the higher group. Initially, they flatly said 'No imports.' Then I showed them some very good information indicating that residual values and maintenance costs would be much more favorable with the imports. After all the facts were presented, this body said that despite the facts they didn't want to be out of step with the U.S. marketing process. So to counter, then, we indicated that placing imports in states showing 50 percent or more import automobile registrations would make us less conspicuous. Consequently, we got approval under those terms, and it has proven to be a good decision.

I've found that support for fleet operations can be phenomenal if you know what you're doing - and if you don't try to kid people. That's one of the major failings I used to notice with fleet people: they were tire-kickers, and had the attitude that they were the only experts. But if you can go to top management with an expanded computer run that shows historically what has happened with your vehicles and costs and so on, then you really become an expert. They just can't deny it. Or if you say, 'In addition to these facts, AFLA says this, NAFA says that,' well, your credibility is increased automatically, and you can get all the support you need. But you have to be right.

Dennler: I can relate to what Don is saying perfectly. In all honesty, we have had excellent results with our proposals to management. But you have got to develop that professionalism. If you have made your mark and proven yourself, there is a tendency for management to give you more rein as you go along.

Recently, for example, we've been able to build some new garages and pursue an alternative fuels program and even take over another department. If you go in to upper management and show where they are going to save money- or why a certain program is desirable - you'll have few problems. But I think the key is to do the homework first: the cost benefits, the whole nine yards. If you do that, there's not a whole lot they can say to refute you.

Donske: We've also had our major proposals adopted. Such proposals are put into writing and sent first to the corporate director of Traffic and Transportation, who can approve some of them himself, depending on the proposal. When proposals do go higher up - say to a vice president - they have usually been adopted because we spell out the proposal's economic advantages to the corporation. Approvals can take a while, though.

When we downsized from full-size cars to mid-size, for instance, that proposal took from four to six months to get approved. Each divisional vice president had to review it and give his okay. It was necessary, though, because when the driver starts complaining that he's being put into a smaller car against his will, he's going to go to his boss, who in turn is going to go to his boss, and on up the line. This way responsibility for the change is established from the start.

Therefore, such proposals have to be presented in a professional manner, and you have to have the answers to all possible questions. As long as we have answered those questions and have demonstrated real cost savings - and the proposal is within the limits of the corporate image - we've had no problems gaining approval.

Dennler: Debbie, you say there are some things your boss can approve alone?

Donske: Yes, depending on the proposal. This would be the director of Traffic and Transportation. Once, for example, we were thinking about putting AM/FM stereos in the trucks, because we already have them in the cars. I presented the proposal to him, which outlined the additional costs, and he made the decision without having to go to the vice presidential level. The proposal was denied, as the cost was not justified.

AF: In what other areas could upper management be more responsive to your needs?

Donske: I feel that our corporate financial department could be more responsive to our proposals. Because our fleet department is the only one which leases such a large number of vehicles, we really have to be vehicle-leasing experts. Therefore, upper management has to rely on our knowledge and recommendations in these specific areas. But because we are a large corporation, with separate legal, finance, and treasury departments, response to these finance and lease proposals takes a very long time.

Benson: You know, that's why I would really advocate our committee approach. The Vehicle Review Committee has been the neatest thing that's ever happened to us, because most everyone who has the authority to make a decision is right there in that room with you. So you make your presentation, and they say they like it; then you can go right ahead with it, or you'll be told to do a study that will be completed within a certain time frame. You'll have your next meeting, and the study will lay it all flat on the table; then a decision is made. So it's a tremendous advantage over trying to get together with all the individual departments.

AF: How about at the BofA?

Dennler: In all honesty, my needs are being met. If you get in there and do your job well, you are rewarded with more responsibility. So we are continually involved in more and more programs. That's fine, except that all of them tend to be assigned top priority. You can only have so many top priorities at one time. So one of the biggest parts of my job is to coordinate all the efforts, and see that everybody is doing their job.

At the bank, a lot of people in the organization don't really realize what our capabilities are and what we do. That's why we've begun this year to spread the word. We have our own internal newsletter, and we are going to start sending that out to the bank's major departments. We'll talk about what we're doing, why we're doing it, and how we're saving money.

AF: What other advice might you have for fleet managers looking for increased recognition?

Donske: I think Don Dennler is on the right track with his newsletter. We have a newsletter for Traffic and Transportation, but I also mail out safety and maintenance bulletins for the drivers. I would strongly advocate any type of newsletter or bulletin for the company on a monthly or quarterly basis that lets people know where you are, what you do, and how you can help them.

Benson: It's interesting what the written word will do for you. We go through the same process with quarterly newsletters to our missionary fleet. We have about 70 missions throughout the U.S. and Canada, and each one of those missions, in a sense, has its own individual fleet. The regional representatives I mentioned earlier will go out and work with these drivers on an individual basis, and then the quarterly newsletter will support whatever our objective is for that particular time frame. When the driver sees something in the newsletter, it seems to have a greater impact. The effect of the written word is much more dramatic in many cases.

In terms of general advice, I would tell fleet managers that the whole idea is to use your imagination and to keep your ears open at all times. I think that the good manager listens when his people talk. That's what I try to do, and I know it works.

Also, be prepared. Build your charts and graphs, and have them show that your acquisition costs have come down from this level to this level; show that your maintenance costs have taken the same downward step. Show that your safety programs are that much more effective, and show that your residual return has improved by some dramatic number.

Have your charts and graphs with you every time you go to a meeting with upper management. Let them know that there has been improvement since your last meeting. We have got to do a marketing job for ourselves to keep management's attention.