Hotline News: Top News in Fleet and Leasing

FLEETWAY SALE-McCullagh Leasing Co. of Detroit has acquired the long-term lease portion of Los Angeles-based Fleetway Corp, The acquisi­tion, for $1,500,000, involves more than 600 passenger cars, mainly in business fleets. The Fleetway portions of truck leasing and rental as well as Bird Rent-A-Car reportedly have been sold to another company. Sam Lee, Fleetway president, plans to devote his time to the fleetway franchise system and his allied automotive fleet management and leasing interests. The acquisition by McCullough is its first major purchase since April, 1961 when it purchased 400 cars from National Car Leasing, Mike O'Connor has been named general manager of the. McCullough opera­tion, located in the old Fleetway headquarters at 8929 Wilshire Blvd, Beverly Hills, with Barry Stevens as sales manager. A spokesman for McCullough told AUTOMOTIVE FLEET that the company is considering several other acquisitions in the leasing field. The company currently has more than 12,000 cars under lease.

DEFENSE DEPARTMENT REPLACEMENT-Future economical utility rather than past repair costs will now be "a strong factor" in criteria determining the replacement of its vehicles, the Department of Defense announced, A new ruling establishing Uniform policy and guidance governing the ex­penditure of funds for maintenance, repair or replacement of vehicles does away with the arbitrary ceiling on the amount which may be spent for repairs. While retaining factors of age and mileage, consideration will now be given as to this life expectancy and future economical use potential of each vehicle. Whenever the estimated repair cost is greater than 50 per cent of the current wholesale value, prompt action will be taken to replace the vehicle rather than repair it.

OIL, ADDITIVES-Mobil Oil Co. is the latest petroleum company to come up with a new super premium motor oil. Called Super Mobil Oil, the com­pany reports that laboratory tests show the new oil will keep engines clean three times longer than leading premium oils. The oil was used by all 36 cars on the recent Mobil Economy Run

Du Pont company has announced a new additive designed to reduce oil consumption in older cars. Called Golden "7", it is a heavy-bodied viscosity improver that keeps oil from thinning out at high operating temperatures and also raises oil pressure...Valvoline Oil Co. has introduced a new oil, Valvoline XLD, which it said was developed to meet the severe lubrica­tion requirements set by automakers in recommending longer oil change intervals.

HERTZ EARNINGS-Hertz Corp. reported record first quarter revenues and earnings. Revenues for the quarter ended March 31 were up to $38, 293,765 from $37,329,851 a year earlier. Earnings totaled $1,447,973, equal to 41 cents per share, compared with $1,416,256, or 41 cents per share last year Leon C. Greenebaum, Hertz board chairman, said the in­creases were achieved "under far less favorable conditions than those of the record first quarter of last year," Greenebaum termed the outlook for the remainder of 1963 "most encouraging."

AVIS EARNINGS-Avis Inc. operated in the black for the first six months of its fiscal year for the first time in its history. Robert C. Townsend, Avis president, said the company earned $8,149 for the six month period ended Feb. 28 against a loss of $1,353,917 in the same period last year. Revenues were at a record high, rising 15 per cent to $16,476,640 from $14,263,258. "We accomplished one of the fastest fleet turnovers in car rental history, "Townsend said, "Our rental fleet is now made up of 95 per cent new 1983 models. Moreover, we added addi­tional oars and trucks through purchase and acquisition and were thus able to offer more vehicles than ever before. "Avis recently broke ground for a new $100,000 city headquarters for truck rental and leas­ing services in Nashville, Terra. The company also eliminated rent-it-here-leave-it-there service charges in Delaware, Pennsylvania, Maryland and the District of Columbia.

STATE LEGISLATION--New York has passed a law requiring all cars to be equipped with flashing lights to warn drivers of a disabled vehicle. Effective with 1960 models, it requires that cars be equipped with a device to permit the two front and two rear directional signals to flash simultaneously...New York has also passed a law to make it unlawful  for motorist to drive cars with treadless tires after Jan, 1. The state's motor vehicle department is determining the amount of tread that will be acceptable.

EXCISE TAX REFUND-The Internal Revenue Service has ruled that an auto company is not entitled to a refund of federal excise tax on a car which is leased by a dealer to a state or local government. Under the Internal Revenue Code, auto companies are exempted from payment of excise taxes on any car sold to a state or local government. Also, under the code, the lease of a car is considered a sale for purposes of the man­ufacturers' excise tax. However, the IRS has ruled the excise tax ex­emption applies only to leases to governments by the manufacturer and not to a lease by a dealer. Thus, manufacturers are not entitled to a credit or refund of the excise tax paid on its sale of the vehicle to the dealer.

TIRE NEWS-Nylon tires continued to make gains in the replacement market in 1962, according to Du Pont. Sixty-nine per cent of the pas­senger replacement market tires sold last year were reinforced with nylon, compared with 57 per cent a year ago...Goodyear has intro­duced a new tire said to eliminate the hazards of a Blowout and the dangers involved in a roadside tire change. Called the Double Eagle, it contains a "safety inner tire" of honeycombed tread which is said to guarantee against blowouts and punctures. As a "warning device." the tire develops a thumping sound to alert the driver that the outer tire is punctured. The tire is priced at $70.45 and is guaranteed against normal road hazards for the life of the tire... Firestone has come up with a new tire repair system which includes a different type plug to fill the injury, a curing fluid, a new patch to reinforce the injury and self-curing characteristics of both the plug and patch. Called MoliCure, Firestone says the new method is the "first completely new process in tire repair history."