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What a difference a year makes.
When 2020 started, The Hertz Corp. was amid its bankruptcy case and facing the uncertainty that comes with it. Today, the company — with a new interim CEO, new fleet financing and some ambitious programs in place — seems like it’s solid and has weathered the worst of the storm.
Financially it’s in strong shape. In October, it reported $2.2 billion in revenue for the third quarter, up 19% over the second quarter.
The Lee County-based company, in its earning statement, credits the increase in part to travelers hitting the road again and tight fleet inventory. While the numbers weren’t back to pre-pandemic levels, “these headwinds were partially mitigated by improvements in pricing power.”
Mark Fields, the interim CEO who took over in October, says in the earnings statement that the quarter “puts us in a position of strength as we create the new Hertz and lead the future of mobility and travel.”
Hertz, with a corporate office in Estero, declined to respond to repeated attempts to comment for this story. A company spokesperson asked for a written list of questions, then failed to get back answers prior to deadline.
Creating a new Hertz is a big part of the messaging the company has pushed since exiting bankruptcy in August. And, to a degree, it’s begun to do that.
In the past few months it has announced, and begun to implement, an electric vehicle program that includes buying 100,000 cars from Tesla; a partnership with Uber to make Hertz vehicles available to drivers; a partnership with online automobile retailer Carvana to sell its fleet; and it joined the Nasdaq exchange.
According to its initial Chapter 11 filing, Hertz had $25.8 billion in assets and $24.3 billion in debt on March 31, 2020, less than two months before it filed May 22.
Hertz exited bankruptcy June 30 with $5.9 billion in capital, its debt load reduced, a new ticker symbol and a new board of directors that included Fields, the former president and CEO of the Ford Motor Co.
But, as the saying goes, it’s not easy to turn an ocean liner around. And Hertz, a multibillion dollar international corporation, is about as unwieldy as a freighter.
Fields is the third CEO in the past two years and the seventh in the past six years. Then there was this nugget from early November: Elon Musk took to Twitter to dispute that the deal to sell Teslas to Hertz was actually signed.
And, as it works to rebound into 2022, it faces a class action lawsuit from customers alleging they were falsely arrested after the vehicles they rented were incorrectly reported stolen.
According to a spokeswoman for the Philadelphia law firm behind the lawsuit, more than 180 claimants are asking for $530 million. This is based on “days in prison, days of prosecution, reputation damage, expungement and credit repair.”
The lawsuit includes eight people allegedly arrested in 2021 “who have come forward with proof of new false arrest incidents, confirming that Hertz continues its egregious practices,” the spokeswoman says.
Hertz officials, in previous statements, has disputed the allegations, saying it does occasionally report vehicles stolen but “the vast majority of these cases involve renters who were many weeks or even months overdue returning vehicles and who stopped communicating with us well beyond the scheduled due date.”
It will take some time for the company to work through the case and other issues, but the current CEO is optimistic, at least publicly, about the direction that’s been set.
“We see the opportunity for profitable growth by building on our iconic brand and global fleet management expertise,” Field says in the third quarter earnings report, “and combining it with new technology and new investments in electrification, shared mobility and a digital, customer-first experience.”
In 2021, many companies discovered new ways to adjust to the pandemic. These nimble entrepreneurs believe that know-how — and guts — will be a key factor for continued success in 2022. Click the links below to read more about the Business Observer's 2021 newsmakers.
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