The fleet issues at Lockheed Martin Corp. are no different from those at other typical large corporations with companies and subsidiaries worldwide. Whether it is implementing a replacement plan to replace old vehicles or following manufacturer's warranty schedules in maintaining the vehicles, it is critical that fleet issues be dealt with as they occur, because ignoring them could present a financial burden and lead to safety liabilities and loss of productivity in the future.

Lockheed Martin operates approximately 14,000 vehicles worldwide, approximately 6,000 is licensed road-type vehicles in the U.S. Seventy-five percent of the fleet is company-owned, 23 percent is leased, and the remaining 2 percent are government-owned.

Minimal Capital Funds to Replace Aging Fleets

Vehicles are low priority on the capital budget list when new hydro presses, numerical-control lathes and composite cutting laser-inspection machines are needed for new programs. When vehicles are placed on the priority list along with new high-tech machines that keep the firm in business each year, finance and upper management personnel generally make the evident and right decision to buy the machines and continue to repair and maintain the old vehicles for another year. Eventually, however, fleet management realizes that this decision can be very expensive due to high repair bills and possibly even more detrimental and costly in other areas concerning loss of production, safety, or other liability factors.

Proper Maintenance on Vehicles in Warranty

There are many requirements that a new vehicle owner must be aware of to effectively and proficiently maintain vehicles covered by a warranty. When a new vehicle is used for round-the-clock, frequent short trips of fewer than five miles, and extensive idling (such as security use at a large facility/military base), the oil must be changed every 3,000 miles or three months, whichever comes first (DaimlerChrysler and Ford owner's manual). Most of the manufacturers call this "Severe Duty Scheduled Maintenance." This is important for your maintenance department to understand when a new vehicle is purchased or leased. The manufacturers are adamant about the user understanding the importance of required maintenance to retain the warranty for that particular vehicle. In most cases like this, the manufacturer will seldom waiver from what is stated in the owner's manual.

Meeting Alternative-Fuel Vehicle Directives

Although our corporate companies will meet the federal and state requirements for new-vehicle purchases/leases concerning alternative-fuel vehicles, the lack of alternative-fuel servicing facilities (infrastructure) in some of the cities and states makes it difficult to comply with set guidelines. It is not a good policy for any business or government to require strict adherence to required laws when those laws jeopardize and require a department or group to conduct business in an inefficient and unsafe manner. When a driver has to travel additional miles or go into unknown neighborhoods to obtain the required fuels, the safety of that individual could be in jeopardy and the possibility of an accident is increased.

Establishing and Implementing Vehicle Policies and Procedures

Liability issues of using personal vehicles for pickup and delivery of company packages to or from local airports and businesses is a risk factor that should be considered. Many times the employee will make the decision to use his vehicle to pick up an item from the airport or vendor close to his domicile, without a supervisor's directive. The question to be considered is: What are the liabilities for the company when an accident occurs and there are injuries or casualties involving the employee and/or the person(s) in the other vehicle? Also, the use of cellular phones when driving, eating, drinking (alcoholic/non-alcoholic beverages), and smoking should be addressed in the vehicle policies and procedures manual. Establishing, documenting, and implementing the policies at all companies (corporate-wide) might not be feasible since environmental concerns and regulations vary from state to state.

Dealer Out-of-Stock vs. Factory-Ordered Vehicles

One of the main concerns I have as a fleet manager and co-chairman of a Corporate Fleet Council for Lockheed Martin is that many of the companies and subsidiaries (there are more than 150 at this time) order their vehicles from local dealers or out-of-stock in lieu of ordering from the factory. In most cases, the user, through the buyer, orders the vehicle(s) not knowing the cost difference between a factory-ordered vehicle and those ordered across the street from a local dealer. All they know is that it will take eight to 12 weeks to receive the vehicle from the factory, and they can get the vehicle across the street tomorrow. This could mean that the company paid as much as $3,000 more for the vehicle by not ordering direct from the manufacturer.

3 Ways to Enhance Fleet Management

1. Establish a vehicle replacement plan that will help justify the need for new vehicles - Since vehicles are low priority on the capital budget list each year, a vehicle replacement plan that is practical and easy to understand is desperately needed. To justify the fleet manager's position of requesting vehicles when needed, the plan should address safety issues first and the continuing cost of using old and high-maintenance vehicles second. By establishing practical, yet flexible, guidelines as to when vehicles should be replaced, the finance personnel will be more apt to listen and understand the licet manager's position concerning the need for new vehicles and our mission of adequately and proficiently servicing our customers).

2. Increase the use of corporate surplus Web sites to transfer usable property from one company to another - At Lockheed Martin, the Corporate Property Resource Information System (CIPRIS) and the Corporate Properties Asset Management Organization Web site should be used to inform companies throughout the corporation of available surplus property and the closing of facilities, enabling a cost avoidance regarding the purchase or lease of new vehicles. Over a period of three years, approximately $2.5 million of vehicle assets have been transferred between companies in lieu of selling for low-dollar surplus. Photos of available vehicles can be viewed via the surplus-property Web site. When the vehicles are not requested by other companies, the vehicles are salvaged for low-dollar scrap or sold in a company vehicle auction.

3. Use corporate contracts with vehicle management vendors to enhance and improve fleet options at all company sites - Many Lockheed Martin companies are not aware of the incentives and basic benefits of the contracts with our two vehicle management vendors. It is our objective to educate all procurement, property, and facilities personnel throughout the corporation on the details of the contracts and why it is important to use the same automobile manufacturer (where possible) to enhance our earnings (volume incentives). If a corporation is large enough to have companies located in several states, it would be advantageous and profitable to use the same manufacturer or vehicle management service throughout the corporation, because incentives and rebates would be greatly enhanced and economically beneficial to the corporation as a whole.