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Old 23rd May 2020, 05:26   #1
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Default Car-rental company Hertz files for bankruptcy

The popular international car rental company, Hertz is planning to file for bankruptcy as soon as this weekend.

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I've never had a personal experience with this company but have seen that it was a popular one. I've seen it's kiosk at Delhi airport earlier. I guess with advent of many self rentals at more economical rates, this might have suffered.
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Old 23rd May 2020, 05:49   #2
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Default re: Car-rental company Hertz files for bankruptcy

I have used Hertz rentals, but not in India. Never knew they had a branch here. However, I guess this is happening in the US.

It is a good rental company, a bit costly I would say. The cars were in excellent condition. An advantage of Hertz is they are available at premium locations, such as Airports. They had tie-ups with leading hotel chains like Marriott.

Sad to hear a popular company going Bankrupt. Looks like the grim picture of recession has started to surface.

Last edited by Thermodynamics : 23rd May 2020 at 05:51.
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Old 23rd May 2020, 10:48   #3
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Default re: Car-rental company Hertz files for bankruptcy

I have used Hertz in US but only once because they were the only one near to my hotel. Otherwise enterprise was my choice even for personal rentals.
Also Hertz wasn't there in all cities as such and enterprise was even there in a relatively small city I was staying.
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Old 23rd May 2020, 12:33   #4
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Default Car-rental company Hertz files for bankruptcy

Hertz Global Holdings Inc., the US-based car rental company has filed for bankruptcy.

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According to a media report, travel restrictions to contain the spread of Covid-19 and the subsequent economic collapse have killed the demand for rental cars. Mounting debt is also said to have lead to the collapse of Hertz's rental car business.

The Chapter 11 filing allows Hertz to keep operating while it formulates a recovery plan. The company listed about $25.8 billion in assets and $24.4 billion of debts. It has also sought a bailout from the US Treasury Department. The Chapter 11 proceedings only involve the US and Canadian subsidiaries.

Hertz has a fleet of about 4 lakh cars in the US. These are not subject to repurchase agreements with vehicle manufacturers. It is believed that the liquidation of the company's fleet could adversely affect the auto industry in general.

Hertz was founded in Chicago in 1918. Today, the company's business is spread to 12,400 locations worldwide.

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Old 23rd May 2020, 12:39   #5
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Default Re: Car-rental company Hertz files for bankruptcy

One of many chapter 11 filings to follow I'm guessing. Just yesterday I was talking to a friend who's relative is in the high echelons of AVIS in India. They are going through high amount of job cuts and salaries are on hold. I have been a regular user of AVIS outside of India and was already starting to think that they are going to be in trouble when COVID19 outbreak started.

Going forward there is going to be a huge challenge for self-drive / short rental and chauffeured car rental service providers as people will just not have the comfort to use these platforms. The flexibility and ease that these platforms offered might get outweighed by the risks associated / paranoia in people's minds for a foreseeable future while the population starts accepting the virus as a part of life and ignore the risk.

Uncharted territories ahead...
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Old 23rd May 2020, 13:22   #6
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Default Re: Car-rental company Hertz files for bankruptcy

I have given my business to Hertz.

Just like Enterprise and Avis some of their locations are great but some were truly unprofessional. The best thing about them was the range of cars they offered and probably had the best airport locations.

This pandemic has sounded a death knell for many established business.

Last edited by bigron : 23rd May 2020 at 13:27.
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Old 23rd May 2020, 13:43   #7
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Default re: Car-rental company Hertz files for bankruptcy

As many may know this is a US bankruptcy. That is to say you declare bankruptcy to earn legal protection against your creditors {vendors, banks, etc}. This allows the company to continue operations with certain caveats, the creditors/lenders have to yield a little and over time hopefully the company revives or another shareholder steps in and the creditors get their dues back.
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Old 23rd May 2020, 22:06   #8
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Default Re: Car-rental company Hertz files for bankruptcy

I have used most car rental agencies in the USA. Hertz and Avis were the best. With Budget, National and Enterprise, you ran the risk of getting a crappy car.

I also had an accident with a Hertz car when I was on my way back to the airport to board a flight. The entire exercise took no more than a few minutes and I was on my way to board my flight. Absolutely no hassles at all.
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Old 23rd May 2020, 23:12   #9
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Default Re: Car-rental company Hertz files for bankruptcy

I have used Hertz multiple times and it is a convenient way to travel in the US. The charges were on the higher side, esp. with insurances bundled in. Will leave a big gap in the self drive market for sure. Makes me wonder if these businesses were already suffering and Corona just pushed them over the brink !
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Old 23rd May 2020, 23:23   #10
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Default Re: Car-rental company Hertz files for bankruptcy

Quote:
Originally Posted by Reinhard View Post
One of many chapter 11 filings to follow I'm guessing.
This was my first thought as well. Asset intensive companies which were directly/indirectly promoting sharing of resources are going to be in deep-deep trouble. Not that others won't be affected, but your Zoomcar and Weworks will need some magic to survive this pandemic.

Coming to Hertz, never used their service but as another member mentioned, have seen them at prime slots across airports and otherwise. I hope this is not a Lehman Brothers moment for this industry.
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Old 23rd May 2020, 23:49   #11
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Default Re: Car-rental company Hertz files for bankruptcy

Whatever a person uses outside of his residence is at danger today. Hotel, transport, tourism, they are all under threat. You cant even provide relief for them to be viable as business. You can only provide sustenance relief. Its really sad and hope something can be done to freeze them and people working in those sectors to be able to live respectfully until this is over.
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Old 24th May 2020, 09:17   #12
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Default Re: Car-rental company Hertz files for bankruptcy

It appears Hertz might heading from chapter 11 to chapter 7 bankruptcy. Asset liquidation has already begun and their website has listed many of the cars for sale -

https://www.hertzcarsales.com/used-c...y=odometer+asc

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Old 24th May 2020, 09:34   #13
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Default Re: Car-rental company Hertz files for bankruptcy

The lockdown, rather freeze on travel, has been a death-knell for the car rental business. Companies like Hertz rely on business rentals during the week and leisure travelers over the weekend. With neither happening, they'd have no cash flows.

Their business model must have already been under threat from Uber/Lyft since many companies moved to a business account on Uber for the hotel-office-airport travel their consultants do, rather than book a car for five days.

Quote:
It's easy to blame the company’s misfortunes, as well as the other corporate casualties, on the pandemic. The reality is a different story. The failures of Hertz and the others have more to do with their own arrogant inertia and inability to recognize the fast-changing trends and a refusal to adapt their business models accordingly.

Back in the day, Avis was Hertz’s major rival. Avis branded itself as the scrappy underdog and adopted the advertising tagline, “We Try Harder.” It was meant to convey that the folks at Avis will do whatever it takes to make its customers happy. Hertz’s slogan should’ve been “We Didn’t Try Hard Enough.”

The Wall Street Journal reported, “Hertz Global Holdings Inc., one of the nation’s largest car-rental companies, filed for bankruptcy protection Friday, saddled with about $19 billion in debt and nearly 700,000 vehicles that have been largely idled because of the coronavirus.” The company has lost money for the past four consecutive years, including $58 million in 2019.
https://www.forbes.com/sites/jackkel.../#3548fefa2bca
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Old 25th May 2020, 08:57   #14
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Default Re: Car-rental company Hertz files for bankruptcy

Guys, just a note. I think this will be a classic "Chapter 11" bankruptcy. Hertz will NOT die; instead, it will emerge from the bankruptcy as a leaner organisation (think GM bankruptcy of 2009). Who loses? Creditors, shareholders & employees. The bankruptcy is especially disappointing because Hertz operates at the top end of the market and commands premium pricing.

I'm surprised that a company the size of Hertz can't withstand a couple of months of bad business. "Working capital" either saves or kills companies in such economic downturns. The problem with Hertz is:

- Excessive debt
- Brainless expansion
- Management churn. See how many CEO changes they've had
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Old 25th May 2020, 16:12   #15
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Default Re: Car-rental company Hertz files for bankruptcy

Shame, I always used Hertz, I had a gold membership or whatever it was called. You would just show up at their premises, you name would be on a display and where to pick up your car. you would step in and drive off, only a quick check at the exit barrier. Very convenient, excellent service.

I always thought they were pretty good on customer service too. The odd times, I used other rental companies, I always felt Hertz was doing a much better job.

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