The absence of cash, revenue, & business caused by the COVID Lockdown along with overburdening debt forced #1 car rental leader to go into Chapter 11 Bankruptcy.
In spite of this, Hertz has a $1B in cash on hand to keep the business going.
Global operations are excluded and Hertz sought funding from foreign governments,
Debt management & fleet cycling practices caught up with the revolving top management at Hertz.
Combination of ownership strategy, used vehicle values, & servicing debt requirements lead to bankrupt protection.
Carl Icahn owns 40% of the company. No word from him.
COVID 19 has impacted car rental, hotels, and travel.
Car rental is cash generating business with dependence on a sustained revenue stream.
One half or about 14,000 employees have been laid off.
Future of the company is uncertain even though analysts are optimistic & believe Hertz can restructure.
Hertz had $17 B in debt. Strategic missteps contributed to collapse.
40% of the fleet was old and used car market declined. Customers complained.
“I don’t think Hertz is going away, When you think about car rental, you think about Hertz.” — Betsy Snyder, Credit Analyst
“The fleet had aged to the point that we had customer mutiny.” – Former Hertz Chief Executive John Tague.
Hertz has 12,000 corporate locations and franchise operations.