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The Story of Hertz Going Bust

bloomberg.com

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Re: The Story of Hertz Going Bust

#31

Post by appleflaxen »

virgilp wrote: post #20
eru wrote: post #7

Earlier quoted context omitted.

Why do you say Kathryn Marinello failed? Compensation incentives are there for a reason. Acting according to them just means fulfilling the shareholders wishes. (Unless the shareholders are idiots or impotent and the board set the wrong incentives.) Running a riskier strategy that fails under a pandemic is a perfectly cromulent business decision to make. Shareholders and creditors knew what they were in for. Not all…

> Unless the shareholders are idiots or impotent and the board set the wrong incentives. That's quite a big leap. Humans are exceptionally good at gaming objective metrics if that's all that matters... setting the right incentives is by no means something any non-idiot can do; it's in fact exceptionally rare to find people able to set right incentives for an entire organization (or for it's leadership; if the leaders…

> Humans are exceptionally good at gaming objective metrics if that's all that matters

I think that's OP's point: the board should understand that, and set them appropriately.

Re: The Story of Hertz Going Bust

#32

Post by virgilp »

appleflaxen wrote: post #31
virgilp wrote: post #20

Earlier quoted context omitted.

> Unless the shareholders are idiots or impotent and the board set the wrong incentives. That's quite a big leap. Humans are exceptionally good at gaming objective metrics if that's all that matters... setting the right incentives is by no means something any non-idiot can do; it's in fact exceptionally rare to find people able to set right incentives for an entire organization (or for it's leadership; if the leaders…

> Humans are exceptionally good at gaming objective metrics if that's all that matters I think that's OP's point: the board should understand that, and set them appropriately.

And my point is that's basically impossible to "set them appropriately", and one shouldn't throw around strong words such as "idiots or impotents" for those failing to do so. Did the board fail in its mission? Obviously. But do only the idiots fail?

Re: The Story of Hertz Going Bust

#33

Post by eganist »

eru wrote: post #25
eganist wrote: post #19

Earlier quoted context omitted.

The odds, according to more than a few scientists (but citing just one here: https://cmr.asm.org/content/20/4/660 ), were 100% in not too much time. I don't know if that makes shareholders and board members "idiots," just that it's something the firm probably should've worked to mitigate a bit more effectively. Example: EHI is still holding on, and they (from my understanding based on employees I've spoken with) had…

That's good on EHI. Though perhaps that planning would have cost some extra time and money that would have been 'wasted', if the pandemic hadn't happened.

> perhaps that planning would have cost some extra time and money that would have been 'wasted', if the pandemic hadn't happened.

Same with insurance, which is why there are many cases where insurance is a requirement (usually cases where people dismiss the risk).

Re: The Story of Hertz Going Bust

#34

Post by rb808 »

> The company also found that Dollar Thrifty had let the tires on its cars get thinner than Hertz allowed, and many had to be replaced at a cost of $30 million

I always wonder if its worth going cheaper or more expensive when renting cars. Stuff like this is interesting, I wonder how many other corners are cut at the cheaper places.

Re: The Story of Hertz Going Bust

#35

Post by juskrey »

rb808 wrote: post #34

> The company also found that Dollar Thrifty had let the tires on its cars get thinner than Hertz allowed, and many had to be replaced at a cost of $30 million I always wonder if its worth going cheaper or more expensive when renting cars. Stuff like this is interesting, I wonder how many other corners are cut at the cheaper places.

I was able to get very cheap deals at renown companies with high quality service and also had to use expensive deals at very shitty ones.

With massive rental cars franchising you never know. Rental car is always a potential problem and should be treated as such.

Hence, the main property you should be looking for is how does the rental company manage problems. Starting from the rental garage (when you point to some issue like worn out tires) and throughout the road. Also it means you should make some trial and errors.

Re: The Story of Hertz Going Bust

#36

Post by hylaride »

rb808 wrote: post #34

> The company also found that Dollar Thrifty had let the tires on its cars get thinner than Hertz allowed, and many had to be replaced at a cost of $30 million I always wonder if its worth going cheaper or more expensive when renting cars. Stuff like this is interesting, I wonder how many other corners are cut at the cheaper places.

I've always rented from Hertz because they've historically been the least hassle, if more expensive than Enterprise.

I live in downtown Toronto and don't own a car. I use car sharing for local needs, but the traditional car rental companies for when I need to leave the city. Enterprise has been consistently terrible. On multiple occasions I've had to wait hours past my scheduled pick-up time due to either understaffing, overbooking, and/or due to other events. Enterprise apparently has a deal with insurance companies where they loan cars after accidents. I once had to wait 12 hours for a car as they were over-booked due to accidents after a snow storm. One time I was rear-ended in an enterprise-rented car. The other person's insurance dealt with the damages, but 18 months later they called me up, demanding payment for the time the car was in the shop.

I used to rent from national/alamo as they would rent to me w/o mandatory extra insurance when I was under 25. They were bought out by enterprise and almost immediately went downhill.

Hertz has always had a car available when promised. I can also take the rentals across the border to the US w/o extra fees. Twice they had to upsize my car for whatever reasons and they gave me a discount to deal with the greater fuel consumption.

As somebody who is a loyal Hertz customer, I worry what the company will look like after the bankruptcy.

Re: The Story of Hertz Going Bust

#37

Post by 082349872349872 »

im3w1l-alt wrote: post #21
082349872349872 wrote: post #4

Earlier quoted context omitted.

US companies aren't supposed to pay back debt (in Hertz's case, how did 2005 affect the balance sheet?) because that would be an inefficient use of capital. US consumers are supposed to spend, not save, to stimulate the economy. US government is supposed to run a deficit, not a surplus. And yet the aggregate US net worth is positive: about 5x its GDP. What sector have I missed?

Debt is how much (negative) money you have. Net worth also takes non-monetary assets into account. If you take out a loan to buy a house your debt increases but your net worth is constant.

So combined US assets are worth a great deal, enough so the declining equity position of (consumers+businesses+government) in those assets has not been significant. That makes sense. Thank you.

Re: The Story of Hertz Going Bust

#39

Post by itsoktocry »

082349872349872 wrote: post #37
im3w1l-alt wrote: post #21

Earlier quoted context omitted.

Debt is how much (negative) money you have. Net worth also takes non-monetary assets into account. If you take out a loan to buy a house your debt increases but your net worth is constant.

So combined US assets are worth a great deal, enough so the declining equity position of (consumers+businesses+government) in those assets has not been significant. That makes sense. Thank you.

>So combined US assets are worth a great deal

Aggregate US household net worth is now upwards of $100 trillion.

That puts the $25 trillion in US National debt in perspective.

Re: The Story of Hertz Going Bust

#40

Post by yardie »

hylaride wrote: post #36
rb808 wrote: post #34

> The company also found that Dollar Thrifty had let the tires on its cars get thinner than Hertz allowed, and many had to be replaced at a cost of $30 million I always wonder if its worth going cheaper or more expensive when renting cars. Stuff like this is interesting, I wonder how many other corners are cut at the cheaper places.

I've always rented from Hertz because they've historically been the least hassle, if more expensive than Enterprise. I live in downtown Toronto and don't own a car. I use car sharing for local needs, but the traditional car rental companies for when I need to leave the city. Enterprise has been consistently terrible. On multiple occasions I've had to wait hours past my scheduled pick-up time due to either understaffi…

I've also had similar experiences with Enterprise. The outcome was different. In a few cases I've driven off with cars from their luxury fleet because the car I had reserved, midsize SUV, was unavailable. So for $50/day/weekend I've driven XC90, Escalade, and a F150. But I've never had to wait 12 hours. They'd call in a car from another location before that would happen.

Also, great experiences with Hertz. I've rented through them in many countries and it's always been great service.

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