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The Story of Hertz Going Bust

bloomberg.com

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Re: The Story of Hertz Going Bust

#41

Post by microtherion »

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…

What I liked about Hertz was being able to choose a particular from a collection of models in the chosen size category, which allowed me to get the combination of CarPlay and rear camera that I liked.

As for the article blaming their fleet for sticking with sedans for too long, to me as a European traveler, this is a feature. One time, I rented from a different company, which "generously" stuck me with some monster SUV, and I mostly hated the experience.

Re: The Story of Hertz Going Bust

#42

Post by m463 »

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 have always liked enterprise. You could sometimes get pretty interesting cars from them.

Re: The Story of Hertz Going Bust

#43

Post by stevetursi »

I am Hertz Alumni, 2011-2016. We had a great group of engineers and product people, many of us far too talented to be in company like what hertz turned into. We were under the leadership of an incredible division head and most of the folks in our group felt a deep sense of loyalty to her. Nearly all of us, including that division head, are gone now, mostly laid off. If you poll any random Hertz alumnus, the story you're likely to hear is "we had a great team and incompetent senior management."

To us, there is a quote in a different bloomberg article from last week [1] which strikes us as accurate. Attributed to Maryanne Keller, who is referred to in this article, it says:

> 'It’s a saga about gross mismanagement,” said Maryann Keller, a longtime auto-

> industry consultant who was on the board of Dollar Thrifty when Hertz acquired

> the company. “It could have been salvaged had he picked the right management,”

> she said, referring to Icahn.'

Icahn lost $1.6b. Thousands of us lost our jobs. But these C-suiters sailed the company to bankruptcy over five years, each of them extracting 7 or 8 figure bonuses. The CIO who laid us all off, for example, received $6.5 million compensation that year [2]. (Sidenote, the work we were doing was replaced with Accenture consultants, who couldn't handle it, screwing up so bad they ended up in court [3].)

One former colleague of mine wrote a post on LinkedIn suggesting Icahn was the unwitting victim of untenable debt situation, and while he may be correct that the debt made it difficult, Icahn can read a balance sheet and he understood the situation.

I can't speak about Marinello's performance, but I agree that the problem dates back to 2014 or even earlier. People have a widespread belief that Frissora was flying too close to the sun, driven by his aggressive personality. Despite his flaws, he had a great team of people who kept the business running, and it wasn't Frissora who fired them all. Nobody, it turns out, was a fan of him. But everyone agrees he was far better than the gang of unusually wealthy miscreants that Icahn replaced him with.

[1] https://www.bloomberg.com/news/articles/2020-05-27/icahn-fil...

[2] https://www.cio.com/article/3404205/how-much-do-cios-really-...

[3] https://news.ycombinator.com/item?id=19737070

Re: The Story of Hertz Going Bust

#44

Post by atyppo »

elliekelly wrote: post #38

What is the ten-year survival rate for companies after a leveraged buyout? It has to be near zero right?

Full disclosure: I've worked in PE before, though I do not currently. Did not directly do anything involving LBOs.

Companies seeking LBOs are not generally in a great financial position. As a result, they tend to go bankrupt at a much higher rate than would otherwise be experienced. Hertz LBO happened before Icahn (a HF manager) got involved. People like Icahn don't invest in a company to lose money — clearly he believed that the company still had value even after PE got involved.

Re: The Story of Hertz Going Bust

#45

Post by rb808 »

stevetursi wrote: post #43

I am Hertz Alumni, 2011-2016. We had a great group of engineers and product people, many of us far too talented to be in company like what hertz turned into. We were under the leadership of an incredible division head and most of the folks in our group felt a deep sense of loyalty to her. Nearly all of us, including that division head, are gone now, mostly laid off. If you poll any random Hertz alumnus, the story you…

2014 - its interesting this is when headquarters moved from NJ to Florida. Its a bit like SV - are California/North East expensive because its worth it? I'm not sure if Hertz went downhill because of the move or you just can't run a smart company from Florida.

Re: The Story of Hertz Going Bust

#46

Post by namdnay »

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 can’t remember if I’ve ever seen Sixt in North America? They’re definitely one step above the rest here in Europe

Re: The Story of Hertz Going Bust

#49

Post by inetsee »

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 hated Hertz with a passion. On one occasion I reserved a compact car. When I arrived they didn't have any available, so they "upgraded" me to an Infiniti Q60. The Q60 is a two-door car; the other couple we were traveling with were older and it would have been extremely difficult for them to get in and out of the back seat. Fortunately, they had rented an SUV, so when we went to the same places on our trip we went in their car.

The trunk on the Q60 wasn't big enough to hold all our luggage, the car required super-premium gas, it got crap gas mileage, and after the trip Hertz tried to bill me $150 for gas, even though I had paid the premium for a gas fill up at the end. I swore I would NEVER rent from Hertz again. I even cancelled a reservation I had with Dollar Rent-a-car when I discovered that they were owned by Hertz.

Re: The Story of Hertz Going Bust

#50

Post by ebiester »

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.

The more and less expensive places are owned by the same companies in most cases. The flagship gets the newest cars. When they get a bit older, they get moved to the mid-tier prices, then to the cheapest places, before sold as used cars in wholesale. So that would be Hertz-Dollar-Thrifty, And you can quickly find out many of the rest. I don’t know how Enterprise manages its fleet though.
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