Goodbye, Hertz. Don’t Come Back.
There's something tragically ironic about Hertz filing for bankruptcy late on the Friday evening headed into Memorial Day weekend.
I don't know whether this particular holiday is usually a boon for car rental companies, but what I do know is that Americans have been living under unprecedented mobility restrictions, and Memorial Day generally marks the beginning of the summer vacation season.
State and local officials have spent the last several weeks lifting restrictions on businesses, includi
Chalk another one up for Team LBO.
Having observed (and been impacted) by Icahn over the years I can guarantee you he has a plan. Now you might not be part of the plan or be able to profit along side him but rest assured….. he has a plan to come out on top. Remember, he loves distressed companies, he will either buy into them or distress them himself if need be. A bankruptcy is merely an opportunity for Carl.
Yeah, but remember: Everybody gets old. Everybody loses a step. When I heard him discuss this on Bloomberg TV last month, he came across as hapless. I’m not saying he doesn’t have a plan, but he damn sure didn’t see a pandemic coming.
With 3 of his people on the board how long do you think it will take for the law suites to begin. Carl has 38+ ownership, it had to hertz!
That pun had to be made
The funny thing is that this is precisely the landscape I would expect to say “so they can’t make money, have terrible margins and nobody in particular likes or cares about the business? Well let’s make sure they get a huge bailout and lots of cheap debt to keep them afloat for a couple decades. I mean why shouldn’t companies be successful even if they do nothing right and contribute nothing to society? It isn’t like they are some poor wage earning citizen who deserves their fate.
If Hertz changed its model to something closer to Zipcar, that might decrease the inefficiency in the current rental model- which has a lot of underutilized capacity.
Zipcar is owned by Avis… and I am not sure how profitable it is as a business, but I agree in that shared mobility is a huge competitor and Hertz have not been able to innovate the business or venture into them.
Hertz Gold just went to Copper. The buybacks were a lifeline ‘til the auto companies wised up on these loss leader deals.
We do it to ourselves. We used to accept that the Sear’s price for a new shirt was fair. Now we drive across town to save a few cents on gasoline and order through Amazon and hope it fits. The real price of renting cars has gone down over the decades (a lot). The rental company can only survive by posting a low rate and gouging us for insurance, child car seats, unfilled gas tanks, etc. while being gouged themselves by airports and governments. We’ve created an environment where only the most conniving survive.
I think a lot of businesses do it to themselves. Using Sears as an example, I used to buy a dozen new Lands’ end dress shirts each year. Sears bought the company and my they completely destroyed the shirts. They changed the fit, the tails were shortened, the locker loop was gone, and they hemmed the lower button hole with a contrasting color thread so that the new shorter shirt body pulled out of my trousers and the button hole looked like a belly button. I called to return the shirts and was told I had to return them to a Sears location. The closest Sears with a clothing department was an hour and a half away. Sorry, no other way to return it. I was so pissed off I never returned to a Sears again. I also don’t have warm fuzzy feelings about my dealings with Hertz.
I can’t believe I am still mad at Sears…
Regular readers are aware that I’ve been extremely sympathetic to businesses that have fallen on hard times due to the virus. But there is nothing – nothing at all – that I like about this story.
Does seem they are trolling for federal bailout dollars. We will see one day who got federal loan gaurantees during bankruptcy.