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Hertz aims to overcome lawsuit, Elon Musk tweet

After announcing several new initiatives meant to relaunch post bankruptcy, The Hertz Corp. gets hit with blowback on dual fronts.

  • By Louis Llovio
  • | 11:26 a.m. November 8, 2021
  • | 2 Free Articles Remaining!
  • Charlotte–Lee–Collier
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Talk about one step forward and two steps back.

For the past couple of weeks The Hertz Corp. has been rolling out announcements about changes it was making as it looked to reinvent the car rental industry and retake its place at the top of the heap post-bankruptcy. The Estero, Lee County company announced a new interim CEO who was going to lead the search for a permanent replacement, it announced its stock would return to Wall Street, it announced innovative partnerships with pioneers Carvana and Uber, it announced a massive deal to move into the world of electronic vehicles and, to top it off, it announced Super Bowl champion Tom Brady as a pitchman.

Things were looking good after nearly two years of struggle, layoffs and uncertainty. 

Then, Elon Musk took to Twitter and CBS News came calling.

In a matter of a few days, beginning Nov 2, much of what the company had done to reposition itself was overshadowed by black clouds rolling in from the two fronts.

First, Musk, CEO of Tesla, tweeted Nov. 2 that the deal Hertz had announced to buy 100,000 Teslas by the end of 2023 wasn’t actually signed. 

The company had sent out a press release touting the electric vehicles and the infrastructure to sustain the fleet. It appeared Hertz took its first major step into a new world. But with the Tweet-happy Musk casting doubt, without giving specific information, observers — and investors — were left wondering what the truth was.

Hertz officials cast doubt on Musk's doubts, saying things are moving along as expected. In a Nov. 8 email statement to the Business Observer, Hertz says “deliveries of the Teslas already have started.”

“We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”

Then, two days after Musk’s tweet, CBS New ran a report based on a year-old lawsuit with “claims filed by dozens of Hertz customers who say they were falsely arrested — and in some cases jailed — because the company reported the cars they had rented as stolen.”

The network interviewed two men who alleged they’d been pulled over for driving stolen cars when, in fact, they had valid rental contracts.

Hertz officials, in the email to the Business Observer, don't dispute that it occasionally reports rented vehicles stolen, saying that “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."

“Situations where vehicles are reported to the authorities are very rare," the email continues, "and happen only after exhaustive attempts to reach the customer.”

The company blames the lawsuit, and by extension the CBS report, on lawyers with “a track record of making baseless claims that blatantly misrepresent the facts.”

In both cases, only time will tell how the stories shake out and if it was a bad week of PR or if there is lasting damage to the rebound. But one has to imagine in the boardroom at company headquarters executives are looking on the bright side. This wasn’t one step forward and two steps back. It’s been more like five or six steps forward and only two steps back.

But, boy, those two steps were doozies.


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