432 Delegates Attend NAFA's 12th Annual Conference

Using the theme "New Horizons in Professional Fleet Management" as its motto, the National Association of Fleet Administrators recently concluded its 12th annual convention. . . The conference, the first to be held outside the U.S., was headquartered in the Royal York Hotel in Toronto, Canada. A total of 432 delegates, the largest in the association's history, attended the conference . . . AUTOMOTIVE FLEET examines the workshops, presents a pictorial panorama of conference highlights, and offers a review of the three-day convention for those who were present... For those missing the conference, AF's study is intended to serve as a reference source for further study . . .

The largest convention in the history of the National Association of Fleet Administrators, 432 delegates, jammed the Royal York Hotel in Toronto, Canada, for the association's 12th annual conference.

Using the theme "New Horizons in Professional Fleet Management" as its motto, the convention began officially on March 31. Clarence G. O'Dell, fleet manager of Procter & Gamble Co., and outgoing NAFA president, told the convention's first business meeting of the "growing membership lists of the association."

O'Dell also was recipient of the annual AF Achievement Award. Presentation of the award was made by Edward J. Bobit, president and publisher of AUTOMOTIVE FLEET.

According to O'Dell, the New York chapter has a membership of 151 members; the Chicago chapter 105 members; and the Tri-State chapter and the new West Coast chapters both have memberships of 35.

Keynote speaker for the convention was R. S. Withers, president, GM of Canada Limited.

Withers pinpointed and defined the responsibilities of the fleet administrator, the car dealer and the manufacturers.

". . . In addition to providing reliable business transportation, the car or the commercial unit you make available is a symbol of the company's regard for the employee, and has much to do with the employee's opinion of his company, his job, and himself," Withers told the delegates.

In discussing expense control, Withers said:

". . . Let me remind you that expense control is an important factor in the success of any business . . . the first essential is to achieve the results desired. After that, expenses can be trimmed, whittled, pared, and cut down to acceptable size. Let's never forget the old cliche: don't be penny-wise and pound foolish. When you're dealing in the critical area of buying road transportation, you're face to face with factors that go far beyond the lowest cost per mile."

The convention's first afternoon session was on "New Horizons in Car Care." Members of the panel were R. G. Hilligoss, Lube Oil "...Tanager, Phillips Petroleum Co.; Charles B. Kass, staff engineer, Ethyl Corp.; Robert H. Griswold, planning-research manager, Shell Oil; J. E. Corey, auto engineer, Firestone Tire & Rubber; William E. Still, tire sales manager, Goodyear Tire & Rubber. Chairman of the panel was Edward K. Shea, senior technical editor, Commercial Car Journal.

Still discussed for the delegates the "after market" area for tires. He discussed the make-up of today's tires and then took a look at what the tires of tomorrow may be like.

"One thing seems certain and that is there is going to be less and less time to sleep in your business and mine if we are to keep pace with the proliferation of changes. Change in itself is good. On the other hand, there seems to be every indication of more and more governmental control of virtually everything connected with the transportation business.

'That is not necessarily bad-I personally have always been a little suspicious, or at least apprehensive, of the do-gooders who could go to a foreign land and prescribe cures for illnesses found there, while at the same time, the same sicknesses are prevailing in their home land."

Kass discussed motor fuels, presenting his opinions from the consumer's viewpoint. In summarizing his talk, Kass said: "A look into the future indicates that problems associated with gasoline per se will be less than in the past. Antiknock quality and knocking requirements of engines will continue to be well matched. Volatility characteristics of gasoline and car fuel-system design also will continue their compatibility. Stability and cleanliness of fuels will improve. . ."

In discussing automotive lubricants, Hilligoss said: ". . . fleet operators should make sure they are getting oils of the quality needed to satisfy new car warranty requirements. This can usually be determined by reading the copy on the container label."

Corey's speech was concerned with the factors that influence changes in today's tire picture.

On the second day of the conference, the "eye-opener" seminars heard Hal Bracken, light truck department, Ford Motor Co., talk on "Private Truck Fleet Operation." Chairman of the seminar was A. Warren Feirer, fleet administrator, Standard Brands.

In another "eye-opener" seminar, Gerald R. Wynne, director of transportation, City of Los Angeles and William C. Estill, chief, general also spoke; on "Private Truck Fleet Operation. Chairman of this panel was Reuben C. Lindblom, director, motor transportation, City of Seattle.

At an afternoon session on "New Horizons in Cost Controls," members of the panel were Ray Deed-on, vice president operations, Lease Plan International; S. A. Alward, president, Cybernetics & Systems, Inc., Louisville & Nashville Railroad; John Peterson, president, National Management, Inc. Portland, Ore. Chairman of the panel was James H. Rowe, manager, employee transportation, General Mills, Inc.

Deedon told the delegates about the electric data processing program that is available at LPI and what plans the company has for the future in this area.

Alward gave a review of computers, telling the delegates how computers have advanced and what they can look for in the area of computer programming in the future.

Peterson discussed the services that his company offers to the fleet administrator in the area of data processing and computer analysis of cost. He did this, as did Deedon, by showing and discussing the types of forms that are available for use by the fleet administrator.

At another afternoon session, the delegates heard a four-man panel discuss "New Horizons in Used Car Disposal." Members of the panel were Leo G. Fenderson, fleet administrator, General Foods Corp.; Jonathan O. Sibley, superintendent, motor vehicle department, U.S. Fidelity & Guaranty; Harry J. Smith, manager, used vehicle sales, Automotive Rentals Inc. Panel chairman was David J. Long, consultant, City of New York.

Sibley told the delegates that "I have convinced my management that it is much more efficient and actually less costly for U.S.F.&G to replace its automobiles almost model-for-model in spite of recognizable higher first-year depreciation expense.

"I have established a mileage versus anniversary type of program which calls for disposing of the cars when they have been driven 15,000 or more miles and are .12 to 15 months old," Sibley said.

"That means that every model year we replace approximately 75 to SO per cent of our fleet-as our cars average between 19,000 and 20,000 miles annually. Our actual net dollar difference averages about $850 per car," he said.

Fenderson told the delegates that "General Foods has 2,000 domestic passenger ears-give or take a few-in its fleet. These cars are used primarily by sales representatives, district sales managers and other supervisory sales people."

Fenderson said all his company's cars have the same equipment: standard V8 engine, automatic transmission; push-button radio, power steering, heavy-duty battery, factory-installed air-conditioning, and tinted glass all around.

"In every case, we believe that by purchasing a fully equipped ear, when we get ready to trade it in, the average dealer will offer top-dollar."

Smith told the seminar session that ARI "currently rims 24,000 vehicles nationally, of which 8,000 are trucks ranging from the smallest to the largest. Of the 16,000 passenger ears, over 10,000 should fall into our typical or average category. In this typical group," Smith said, "we find the economical replacement cycle to be 24 months or 60,000 miles. If we have a fleet averaging about 20,000 miles, we feel a 36 month or 60,000-mile cycle can provide optimum over-all cost."

"To avoid mid to late summer replacements, we may well advance some higher mileage cars into May or June or delay lower mileage cars into the fall and next model year- this will, obviously, distort somewhat the true 24 or 36 month term of service. . ."

The majority of ARI's cars, according to Smith are "top-line two or four-door hardtops equipped with V8, automatic transmission, radio, power steering. Of these, most are now air-conditioned," he said.

In discussing the cost of "goodies," Smith offered tables, which are shown on page 29.

In Long's presentation, he discussed the disposal of the City of New York's administrative cars only. Under the city's current replacement policy, vehicles are disposed of every two model years regardless of mileage. The city uses public auction for the disposal. Long told the delegates that the average annual mileage for administrative units was from 10,000 to 20,000 miles. A total of 1,080 passenger cars comprised the administrative fleet. Total passenger ears used by the city total 2,750 units.

Long told the delegates that of the 536 units that were taken out of service during 1968, 326 were 1963 models or older. Most of these were under the city's older and out-of-date replacement policy. In outlining the auctioning of 210 units through four auctions, Long said 63.3 per cent of the units had between 40,000 to 100,000 miles. Of the 210 units, the average sales price was $492. Of the 210 units, 173, or 82.4 per cent, were sold retail. A total of 37 cars, or 17.6 per cent, went to dealers.

Speaking to a morning session on "New Model Features and Designs," were Arthur F. Boberg, national fleet sales manager, Chevrolet Division; James E. Stark, national fleet sales manager, American Motors, and George Mueller of Ford Motor Corp. Panel chairman was Robert M. Borchert, fleet supervisor, Johnson Service Co.

Speaking at an afternoon session on "New Horizons in Effective Communication and Motivation," were Robert N. Beattie, records administrator, Ontario Hydro; Dr. Donald C. Pelz, psychology professor, University of Michigan. Panel chairman was John E. Ellsworth, manager, transportation services, University of Michigan.

Douglas Fergusson, superintendent, safety department, Nationwide Insurance Co., spoke at the final seminar of the convention, "New Horizons in Safety Programs."

Newly elected NAFA officers are: A. J. Cavalli, C. I. T. Financial Corp., president; J. W. Seemuth,Griffth Laboratories, 1st vice president; J. A. Latimer, Chas. Pfizer & Co., 2nd vice president; H. J. Powers, Sunshine Biscuits, Inc., 3rd vice president; Gordon S. Parks, Columbia Gas System Service Corp., secretary; S. L. Landau, Picker Corp., treasurer; and R. J. Berker, executive director. Trustees-are W. H. Langseder, Thomas Lipton, Inc., C. E. Fenger, Allstate Insurance Co.; and C. G. O'Dell, Proctor & Gamble Co.

Before adjournment, Robert Berke, executive secretary of NAFA, gave a summation on the conference workshops:

Chemical and Petroleum

". . . Of the members present, they represented 11,250 cars. Of these, 6,500 were company owned, 2,600 were on a finance lease and 1,700 were on a net lease. The average mileage at replacement was 50,000 miles. Cars were kept on lease about 30 months. Members were concerned about the length of policy on the lease. In this group we find a growing development, as with other groups in the association, in non-passenger cars, trucks, boats, and mobile equipment. This development poses a problem for NAFA as to how we can expand our operations to provide help to our members in these areas or in areas other than passenger cars."

 

Law Enforcement Group

". . . They felt that three mornings of workshops were not enough, especially with a group such as this whose area includes specialized equipment such as high-speed pursuit cars. They have asked NAFA to sponsor a special midsummer meeting for law enforcement people. The purpose of this meeting is to discuss and evaluate police car specifications. We have agreed to work with them in this project. In addition, we are setting up for law enforcement people, a specification file of both tires and vehicles in the headquarters office. We also will build a file of specs. Let me add that this is simply what we hope we can do for every group in such things as operator's manuals, fleet policies, instruction to drivers, safety programs."

Drug and Cosmetic Group

". . . There were 29 fleets present totaling 21,000 cars. They drove their cars an average of 24 months and put 26,000 miles on the average on their vehicles. The majority of their cars were top line hardtops, most: of them with air and power brakes and more extra equipment. Most of the workshop members said they do not maintain any complex cost systems but they do review their cost figures on an annual basis. They expressed concern in their reports about three basic areas-depreciation, gasoline and tires.

Food and Beverage Group

". . . 25 fleets found wide variance in the reporting of vehicle costs. This included such items as the classification in which they are charged, tolls, accident repair costs. They suggested a type of standardization in which certain cost items would fall into certain categories. A guide for comparison also was suggested as of probable help. In regard to tires, half of the members said they were using first line tires and half were using premium tires. None were using second line. Seventy per cent of the U.S. members were against using studded tires and 60 per cent of the Canadian members took the same position. We were told that about 75 per cent of the fleets represented were using EDP for costs. About 90 per cent of all those present were charging between 3 and 4 cents a mile for personal use of the car. The other 10 per cent were making no charge back."

Government Group

". . . This group was concerned with safety, insurance, methods of reporting accidents. They are finding that they are having a problem as to how to penalize or punish vendors. They think that the use of an accident review board might be very helpful. They found that equipment that was optional a few years ago is now becoming standard, specially they now have eight-cylinder engines and, automatic transmissions, full-size, four-door sedans. They discussed data processing problems and they found that they are basically not satisfied with the results. They found that 57 per cent of the members still were reporting that they were using manual reporting systems. Ten per cent have partial data processing and 33 per cent have full data processing."

Insurance

". . . 27 insurance companies represented. Discussed operating problems starting with the selection of vehicles and replacement time. Their basic concern in replacement was replacement timing. The general period of replacement for the best results, the members felt, is October through May."

Manufacturing-Industrial Group

". . . This group suggested that the conference stop holding morning workshop sessions by category and instead break the membership up into equal size and into mixed groups. The reasoning is that they felt that after a number of sessions you saw many of the same faces and in effect were not being exposed to new ideas and to new approaches. They also had an interesting suggestion in regard to giving the driver the first 200 miles free to compensate him for providing garage for storing of the vehicle. They also removed the cost of the four OE tires from the capitalization cost and made them an expense item. The members charge 24 per cent depreciation in the first model year regardless of when the new car goes into service."

Manufacturing-Consumer Group

". . . 20 firms with 10,000 vehicles. Of these, 7,200 are owned and 2,800 are leased. Concerned with appraisal and disposal, safety, personal use, maintenance and service, tires. Most of the fleets were replacing their tires with OE and they were not appraised on replacement by and large. Most followed the manufacturer's recommendations on service. There was no one way of best disposing of a used car, they felt."

Public Utility

". . . 13 members present. These members were responsible for 8,000 cars, 16,000 trucks and other equipment such as boats, airplanes, special mobile equipment. As you can see, NAFA has moved, from, its original intent to provide a meeting ground, for people concerned with the operation and the administration of passenger fleets. In the utility group, they are using their cars about an average of three years and running them an average of nearly 50,000 miles. They almost all purchase what is called the Big Three middle and bottom line. They do not allow for personal use and most of their fleets are garaged. They find that their average running cost is about six cents a mile. This is for passenger cars."

 

 

 

OPTION	Approximate Cost	Estimated Resale
8 Cylinder (over six)	$82	$100+
Auto. Trans.	$160	$125+
Radio	$50	$ 40+
Power Steering	$85	$ 85+
Power Brakes	$50	Insignificant
Air-Conditioning	$310	$125+

 

DISPOSAL RESULTS IN DOLLARS
	Without Air			With Air
	# cars	avg months	Avg. sale	# cars	avg months	avg sale
3 Yr Old Middle Line	153	30.9	$912	108	30.3	$1,040
3 Yr Old Top Line	274	30.6	$1,141	102	29.7	$1,273
2 Yr Old Middle Line	160	21.6	$1,151	89	23.0	$1,312
2 Yr Old Top Line	1118	22.7	$1,467	954	22.2	$1,584
TOTAL	1,705			1,253