Fleet-ing Thoughts

Vol. 2 No. 5

Going to NAFA Carolina in my Mind

It had been almost a month since I had been to a NAFA Chapter Event (see Dec. 15, 2005 entry) so it felt like I was overdue for a visit. Being from the Northeast, it’s a welcome turn of events when a particularly relevant agenda crops up in a place like Myrtle Beach.

The Carolinas chapter held a meeting last weekend. I couldn’t resist attending, since a good portion of the event centered around a presentation on upstream remarketing and included an Affiliate Fair for those of us who are not fleet managers, but vendor or supplier companies: manufacturers, lease management companies, remarketing firms, etc.

This two-day event began with the annual business meeting and election of new officers (congratulations to Debi McClendon, Syngenta Corporation, by the way, on becoming the new Chapter President). Motivational speaker Petesy Reynolds addressed the topic, “Life’s Main Ingredients and Personality Communication Insights.” Now, I must admit I’m listing the speaker and title from the agenda, since a late flight landed me at the hotel well after midnight. I came in at the tail end of the first item in the morning presentation, but I was early for the next speaker since he focused on my favorite automotive topic -- upstream vehicle remarketing. The talk was presented by my old friend and colleague Bryan Calloway, Senior Vice President of LeasePlan USA.

Once again, remarketing, particularly upstream remarketing (the merchandising and contract sale of a vehicle before it comes off of an opened corporate lease or slated “grounding”) utilizing the benefits of a Web based platform, is one of the hottest topics in fleet management these days, since it’s the area in which astute fleet managers can add the most value and accrue the most savings for their company by implementing new remarketing techniques and operations. Bryan gave a great presentation, complete with the metrics and statistics on actual savings per vehicle, both for the underlying fleet operating companies ($800-$1,200 per vehicle) and their purchasing drivers and employees (roughly $2,000 savings per vehicle below retail book). [Note: if anyone out there wants more detail on this subject, just drop me an e-mail, and I’ll be glad to talk on about upstream remarketing for as long as you can stand it…days and days…]

Bryan’s presentation was followed by an outdoor, tent-covered Affiliate Fair, with displays from manufacturers, fleet management companies, and servicing companies, complete with networking, lunch and lots of prizes. The next day began with a well done presentation by PHH Attorney Sheela Kosaraju on commercial lease vehicle contract terms & conditions (I wonder if I can get continuing legal education credits for that?).
The day concluded with a “Fleet Manager Interactive Forum,” a game show-style program in which public (government, municipal) vs. private (corporate) fleet managers answered moderator and audience questions, facilitated by Debi McClendon, the new Chapter President and general host for the event.

Of course, this was really just the end of the core of the event, as, being at Myrtle Beach’s Kingston Plantation, there was organized golf all afternoon at the Myrtlewood Golf Club, but I’m afraid by 1pm I was back in the air…

On behalf of us “on-the-road” NAFA affiliates, thank you to Debi McClendon, Jay Massey, Bob McElheney and everyone at the Carolinas Chapter who had a hand in putting on this event. It was a fun escape from traveling.


Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, National Association of Fleet Administrators, Bryan Calloway

Vol. 2 No. 4

From Hybrid to Retro: LA and Detroit Show the Trends Up Close

The place I really wanted to be last week was the North American Auto Show in Detroit. It seems like just about everyone I know either went to the press days, January 8-10, or the regular show, January 14-22. Had to spend the first part of last week in Philly, and the last part in Ft. Lauderdale, and this week in Atlanta and Myrtle Beach, which, ordinarily, wouldn’t be half bad, except I missed both the Los Angeles Car Show and the Detroit shows this year.

The auto shows catch you up on all the latest news trends. GM price cuts, their latest attempt at “value pricing” (you can guess what that does to used car values, at least in the short term…), the highly coveted “flex-fuel” vehicles, (even Detroit is rushing to produce them although they really don’t do much to save fuel or the environment, but it’s real politically correct to be seen driving one these days – just look at the demand in southern CA). Also, the sale of “Crossover” vehicles is expected to outdistance SUV sales for the first time this year (don’t dare call them “station wagons,” although if somehow the latest crop had been time warped back into the ‘70’s’ I guarantee you that’s what the world would have called them)…

Probably the single most fun reason to go for me, however, would have been to get an up-close and personal look at the crop of ‘60’s’ and ‘70’s vintage knock-off “muscle cars,” presented both in concept and production form. I guess you could say the latest retro trend first cropped up in Chrysler’s PT Cruiser a few years back, but it was the success of Ford’s redesigned Mustang last year that really lit the fire for ‘70’s “muscle.” I really did want to see the long anticipated Dodge Charger concept, as apparently it looks very much like the 1970 version (which, marking my age here), I do remember rolling around in its original form. Now Chrysler says it is a concept only and has no plans to produce the vehicle, but my guess is if it becomes as popular as it could be, something similar will spring up on the planning boards soon. GM is introducing a similar retro concept Camaro as well. So there’s the latest contrast in cool – while being seen in a hybrid is the essence of “in,” retro muscle cars, not well known for full economy, may mark the next “must be seen in” vehicle…go figure. I personally can’t wait until Chrysler brings back my old favorite, the Barracuda…

For anyone else who missed these shows as well, here’s a list of the concept and production vehicles that made their debut at each of the shows:

Los Angeles Auto Show
Concept Vehicles - Saab 9-5 Aero BioPower
Volkswagen three-wheeler

Production Vehicles - 2007 Chevrolet Suburban
2007 Chevrolet Aveo
2007 GMC Yukon XL
2007 Mazda CX-7 crossover
2007 Pontiac Solstice GXP
2007 Toyota Yaris

Detroit Auto Show
Concept Vehicles - Acura RDX crossover
ASC Cosmos
ASC TriLite
Chevrolet Camaro
Chevrolet Tahoe hybrid
Dodge Challenger
Hyundai HCD-9 Talus
Kia Soul
Mazda Kabura
Mini Traveller
Mitsubishi Concept-CT MIEV
Nissan Urge convertible
Volvo C30 hatchback

Production Vehicles - 2006 Audi S6
2007 BMW Z4 roadster
2008 Buick Enclave
2007 Escalade ESV, EXT
2007 Chrysler Aspen
2007 Dodge Caliber
2007 Ford Edge
2007 Ford Shelby Cobra GT500
2007 Honda Fit
2007 Hyundai Santa Fe
2007 Jaguar XK convertible
2007 Jeep Wrangler
2007 Jeep Compass
2007 Lexus LS-460
2007 Lincoln MKX
2007 Mercedes Benz GL SUV
2007 Mistubishi Eclipse Spyder
2007 Nissan Sentra
2007 Nissan Versa
2007 Saturn Vue Green Line hybrid
2007 Toyota Camry


Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, North American Auto Show, Los Angeles Car Show

Vol. 2 No. 3

The Blunders that Car Guys (and Gals) Do
As we look back on 2005, I refer again to one of my favorite Automotive News issues (January 2006) this year and offer some commentary on the missteps in our industry of 2005. Here’s hoping we all avoid our own in 2006….

Top Ten Big (Automotive) Blunders 2005

1. “Now everybody’s mad” – In early December, due to “cost cutting” according to Ford Motor Co., the company decided to stop advertising in gay and lesbian publications in 2006, just after meeting with the American Family Association that threatened a boycott if it continued support. Then angered gay and lesbian advocates had their own meeting with Ford, and two days later Ford said it would run corporate ads in gay and lesbian publications. The American Family Association said the next day that Ford had broken an agreement and a threatened boycott was back. How to lose friends and offend everyone?
   
2. 
   “Just desserts?” – Two days into Kia’s celebratory national dealer meeting, at the closing dinner, Kia Motors’ Korean owners fired U.S. CEO Peter Butterfield, and not very nicely…Butterfield was escorted from the dinner and fired in a nearby meeting room. All of Kia’s numbers were up with Butterfield, but supposedly the Korean bosses were afraid that Butterfield, an American exec., was taking too much of the credit…really, the top guy taking credit for company success in the car business, how unexpected.
3. 
   “Kirk’s bad bet” – Kirk Kekorian’s Tracinda Corp. paid $1.7 billion for 56 million shares of GM in 2005, acquiring a 9.9 percent stake at about $31 a share. In December, Kerkorian sold 12 million shares for roughly $21 a share, to take advantage of tax savings stemming from his investment losses. Kerkorian’s remaining stock is down about $500 million in value…but I guess you can do that kind of stuff without regret when you still have multiple billions?
4. 
   “A bridge too far” – Nissan’s Titan pickup truck ad, “Pied Piper” showed a bunch of heavy trucks following a Titan towing a boat. Nothing controversial there, but when the background music chosen was, no fooling, the theme from the 1957 movie The Bridge Over the River Kwai, the film set during World War II that focused on British prisoners of war forced by brutal Japanese captors to build a railway bridge, it raised quite a few eyebrows, and the commercial was redone with a different sound track. Why it’s probably a good idea to always have some “grey hairs” among the young hot advertising execs?
5. 
   “Brickyard blowout” – Two thirds of the racing teams set to run in the U.S. Grand Prix in Indianapolis on June 19 decided at the last minute not to participate, citing their concern about the safety of Michelin tires after faulty tires were discovered during weekend practice. Only six cars ended up participating, and as “a gesture of goodwill” Michelin reimbursed 100,000 fans the cost of their $100 race tickets and will be donating 20,000 tickets to next year’s race…but odds of winning were historically good for the six who “dared.”
6. 
   “The damage done” – In March, at a trade conference, Robert Lutz, General Motors Vice Chairman, incited an already nervous dealer body into an uproar when he was quoted in the press as calling Buick and Pontiac “damaged brands.” It didn’t matter that his full quote was, “Buick and Pontiac are both damaged brands that have suffered from years of harvesting with very little reinvestment. And that’s what we are trying to correct with an exciting array of new products”…hardly a death call, but somehow the press only caught on to the first sentence…I wonder why?
7. 
   “Class warfare” – Right after Delphi CEO Steve Miller made a case for obliterating the UAW wage structure after filing for Chapter 11, and asking the union to take up to 60% in wage cuts, he asked the bankruptcy court to approve a retention bonus structure for 500 top managers and executives with a potential windfall payment of about $500 million – needless to say, the union cried foul…and Miller decided to work for $1 this year, but kept his $3 million signing bonus…Seems to me that when Steve worked for Chrysler when it went through its first financial crises, and new CEO Lee Iacocca agreed to work for $1, there were no signing bonuses – apparently $1 was really $1 way back in those days.
8. 
   “The people’s party” – Klaus Vokert, the Chairman of Volkswagen works council in Germany, and the head of Volkswagen human resources, Peter Hartz, both resign over the “VW hooker scandal.” Seems German prosecutors are investigating charges that top Volkswagen labor union officials traveled around the globe and attended lavish parties complete with prostitutes paid for on the company tab. Kind of adds a new meaning to the word “fringe benefits” for labor, doesn’t it?
9. 
   “Slow go from China” – Old Malcom Bricklin is at it again. He’s the guy who scored big co-founding the company that imported Subarus back in the seventies, and has had many wild (though hardly successful) ventures in the car business since, has talked up his “imminent” plans for selling Chinese made cars through his own recruited dealer network. Bricklin’s “Visionary Vehicles” has pledged $200 million for a proposed joint venture with Chinese auto manufacturer Chery (sp?) Automobile Co., where the money would be used to design their vehicles for export to the US – the problem is the pledge only turns into reality when Bricklin sends the cash, which depends on the dealer network, which seems more unreality than reality…Seems every few years Bricklin comes up with a new colorful auto scheme that makes news for a while but never goes anywhere, but it’s fun to read.
10. 
    “GM’s Italian Divorce” – Another footnote to the “GM has had better years front,” GM spent $2 billion to buy its way out of the “put option” Fiat had for GM to buy its ailing Fiat Auto unit in 2005; but GM insists its five year association with Fiat gave them more value than the $4.4 billion in cash it cost them to get in, and then out, of the deal. I guess you really couldn’t expect them to claim anything different, right?

Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, Automotive News

Vol. 2 No. 2

The Best (and Worst) of Everything: Top 10 Lists of 2005

This is the time of year that Automotive News, the weekly newspaper that serves as the bible for the mainstream automobile trade, publishes one of my favorite issues, the one where their editorial staff offers their “top 10” lists of what seems like just about everything auto-industry related for the prior year. So with proper citation and approbation, I give you a few of my favorite Automotive News lists this year:

Feel free to let us know what you think…

Top Ten (Automotive) Stories of 2005

1. “Delphi forces the issue” – the world’s largest auto supplier -- files for Chapter 11
2. “Rick Wagoner’s terrible, horrible, no-good, very bad year” – for General Motors 2005 ‘started out bad and it got worse,’ CEO Rick Wagoner said in an interview with Automotive News in December
3. “GM, Ford try value pricing” – Note: Detroit’s “Value Pricing” maneuvers also got their “Flop of 2005” award
4. “Katrina pummels Detroit too” – as gasoline shot up to $3.07 a gallon Detroit’s SUV’s sales plunged the opposite direction
5. “Bill Ford’s new top guns” – by the end of the year, old guys out, new guys in charge, Mark Fields & Anne Stevens, president & COO respectively
6. “Transplant factories hum” – as Ford and GM cut production and plan to close plants, “North America’s import-brand manufacturers pushed factory volumes to record levels”
7. “Deiter moves on – and up” – Dieter Zetsche moves from CEO of Chrysler Group to the top job, CEO of DaimlerChrysler AG in Germany
8. “Music City, here we come” – Nissan dumps their headquarters in Southern California to move to Nashville, Tennessee
9. “Not a bad sales year overall” – US light vehicle sales expected to total 16.9 million, the Big 3 continued to lose market share though
10. “Toyota leads hybrid surge” – consumers flock to Toyota Prius for the “feel-good factor”; Note: the Toyota Prius also got the “Coup of 2005” award as well

Top Ten (Automotive) Newsmakers of 2005

1. Steve Miller, CEO, Delphi
2. Malcolm Bricklin, promoter of Chinese imports to US
3. Fujio Cho, Toyota, Vice Chairman
4. Bill Ford, CEO, Ford Motor Company
5. Ron Gettelfinger, President, United Auto Workers Union
6. Carlos Ghosn, CEO, Renault & Nissan
7. Kirk Kirkorian, Las Vegas multibillionaire
8. Anne Stevens, COO, Ford (of the Americas)
9. Rick Wagoner, CEO, General Motors
10. Dieter Zetsche, CEO DaimlerChrysler

Top Ten (Automotive) Marketing Gambits of 2005

1. Lee Iacocca pitches Chrysler employee discount plan with Snoop Dog and
   Jason Alexander
2. Pontiac introduces the Solstice on NBC’s “The Apprentice”
3. Lexus attempts product placement in magazine articles
4. GM budgets $300 million to market value pricing strategy
5. Toyota launches massive ad campaign to promote hybrid technology
6. Jaguar, Land Rover end ads in gay oriented magazines; parent Ford Motor denies it succumbed to pressure from Christian conservatives
7. Cadillac enlists rappers, pro athletes and actors as advisors on Escalade
8. GM combines media buying and planning in a single agency
9. Toyota takes a financial bath on sponsorship of the NBC reality show, “The Contender”
10. GM pulls it ads from the Los Angeles Times to protest editorial coverage it perceives as negative

Top Ten (most popular) Vehicle Colors in North America of 2005

1. Silver
2. White/white pearl
3. Gray
4. Blue
5. Black (tie)
6. Red (tie)
7. Light brown
8. Green
9. Yellow/gold
10. Other…

And let’s throw in one other list just because…well, just because…

Ten Automotive CEO’s Favorite Restaurants of 2005

1. Bill Ford, CEO, Ford Motor Company – Giovanni’s Ristorante; Detroit, Mich
2. Mike Jackson, CEO, AutoNation – Jackson’s Four Fifty; Fort Lauderdale, Fla
3. Koichi Kondo, CEO, American Honda Motor Company – Ooedo; Tokyo Aoyama, Japan
4. Tom LaSorda, CEO, Chrysler Group – Lino’s; Rochester Hills, Mich
5. Steve Miller, CEO, Delphi – Trout House; Sunriver, Ore
6. Roger Penske, CEO, United Auto Group – The Mariposa; Park City, Utah
7. Jim Press, CEO, Toyota Motor Sales USA – Montgomery Inn; Cincinnati, OH
8. Tom Purves, CEO, BMW North America – The Great Gallery in the Royal Automobile Club; London, UK
9. John Sanderson, CEO, Siemens VDO – Opus One; Detroit, Mich
10. Rich Wagoner, CEO, General Motors – Il Posto; Southfield, Mich

There were lots more, but I just thought I’d give a sampling of a few of my favorites…

Vol. 2 No. 1

Fleet Events 2006: Preview Part 1

Just as the last entry was a review, I thought I’d make this first entry of the new year a preview of what's “on the plate” for attendance over the next few months. Not to say there won’t be some surprises, as I always seem to forget some events until they sneak right up on me, but here's what the fleet-minded have in sight for the next six months:

January – As it turns out, since I’m so far behind in traveling to see specific clients and prospects, and there are no major events specifically related to our business, I’m going to miss two of my favorite new car shows. Usually, while I don’t attend both in the same year, each year I usually begin with either the North American International Car Show, Detroit, MI, this year January 14-15, or, alternately, the Los Angeles Auto Show, Los Angeles, CA, this year January 6-15. The Detroit show is quite an event, and, I think, still the largest new car show in North American with the most manufacturer “premiers..” The LA show has the advantage of being in southern California in January and the Asian imports usually show their new models or “concept cars”… Wish I could go to at least one, but schedules already conflict…I’m afraid this year I’ll have to make due with Chicago’s show, or New York’s in the Spring…as well, of course, with good old Philadelphia’s Auto Show coming up next month…

February – This year presents a schedule challenge as the Fleet News Europe Conference held in Brussels, Belgium, begins the night of the 7th and goes all day through the 8th of February, while the next JD Power International Roundtable Conference, the one that happens just before the gigantic National Automobile Dealers Association (NADA) Convention, starts the night of February 9th, in Orlando, Florida. While it's possible to make both, I can tell you from experience it’s a mad dash…

So I’ll definitely make the JD Power International Roundtable, the “State of the Industry,” February 9-10th this year, and, of course, the National Automobile Dealers Association Convention and Exposition right afterward, February 11-14th, both in Orlando, FL. But I can’t guarantee I’ll make the Fleet News Europe Brussels event this year (the appeal of sleeping in airports wore off a while ago…).

Once again, I have no good immediate business related reason to attend the Limousine & Chauffeured Transportation Show, February 26-28th put on by Bobit Business Media, except, of course, it's in Las Vegas again this year so I could easily do it as a stopover between an east coast/west cost trip, and this time it's at the Venetian and there are no conflicts on my calendar, and, and, and…(I do like Vegas, did I happen to mention that before?).

March - This month brings three events all folded into a few days at the same place, in this case, a kind of "remarketing convergence." Leading off is the International Automotive Remarketers Alliance (IARA) Roundtable meeting, March 8th, in conjunction with Bobit Media’s Conference of Automotive Remarketing (CAR), March 8th – 10th, in Las Vegas, at Caesar's Palace. Also, the newly formed Internet Remarketing Business Roundtable, a group of Internet focused car remarketing folks (yours truly is a founding member), is scheduled to have its first-ever introductory roundtable conference also during this time in coordination with CAR.

Towards the end of the month, it looks like Auto Remarketing is conducting for the first time a Used Car Manager Conference & Workshop, March 22-23, in Dearborn, MI. Now Dearborn’s weather is nowhere near as pleasant as the weather in Las Vegas is in March, but it looks like an interesting program so I’ll probably attend.

April – So far nothing scheduled for April, but it's usually one of those months that fills up quickly on its own…we shall see.

May – The National Association of Fleet Administrators (NAFA) Annual Conference and Exposition comes later this year, May 6-9, in Orlando, a short hop from the “happiest place on earth.” This is the largest annual forum focused solely on our core clients, thousands of commercial and municipal fleet administrators and the fleet management vendors who service them all in one place, so although in Mickey (and Marvel superhero) land, it promises to be three full days (and nights) of “day job” work, in conjunction with the festivities.

Also in May is AutoRemarketing’s annual I-Remarketing Conference, May 17-18th, in San Antonio, TX…haven’t missed one of these in a very long time, so I’ll be there again this year.

June – This is one of those months when I wish I could kind of split myself in two so that I could attend two things simultaneously. Typically, independent local commercial lessors wouldn’t care whether or not their annual National Vehicle Leasing Association (NVLA) Convention, May 7-10, this year in Grapevine (Dallas), TX, conflicted with the National Independent Automobile Dealers Association (NIADA) Convention, May 6-10, in Las Vegas, NV. It affects us “dual discipline” types though – I have to decide where to put myself when. I’ll probably begin for a day or so at the dealer conference, as it starts one day before NVLA, and then spend the bulk of my time at the NVLA event (it’s the way it works out, and just so happens to give me the weekend in Vegas…).

A point of trivia to wrap up this six-month sojourn. It turns out that this year’s NVLA Convention is exactly the same place, same city, even the same hotel complex, as last year’s annual NAFA Convention, and, indeed, this year’s annual NAFA Conference is in Orlando, where NVLA held its annual event last year...In any case, if anyone reading this missive is in attendance at any of the events above (or if you want more information, just send me an e-mail), make sure to find me and say “hello” - to run into old friends and brand new ones as well, that’s why I write this, after all.