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    Thread: Hertz is making maneuvers to avoid bankruptcy

    1. Member rick8018's Avatar
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      05-06-2020 06:56 PM #51
      Quote Originally Posted by IJM View Post
      Somewhat OT, but is that a late '90s Escort?
      Well...she's skinny enough, but can't be more than 30...oh, you mean the car...

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    3. Member esrballa's Avatar
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      05-06-2020 09:13 PM #52
      Quote Originally Posted by rick8018 View Post
      Well...she's skinny enough, but can't be more than 30...oh, you mean the car...

    4. Senior Member Sporin's Avatar
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      05-11-2020 04:14 PM #53
      Seriously? No OJ jokes? Y'all are slipping.





      Last edited by Sporin; 05-11-2020 at 04:19 PM.

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      05-11-2020 04:51 PM #54
      Quote Originally Posted by rick8018 View Post
      Well...she's skinny enough, but can't be more than 30...oh, you mean the car...


      Both hilarious and makes me feel old to know people born in the late 90's are now of whoring age.
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      This forum is more and more of an embarrassment every day...

    6. Senior Member AZGolf's Avatar
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      05-11-2020 11:48 PM #55
      Quote Originally Posted by chucchinchilla View Post


      Both hilarious and makes me feel old to know people born in the late 90's are now of whoring age.
      That's... an odd thing to think of. Earlier today I was thinking about how the year I was born was closer in time to the bombing of Pearl Harbor than my birth is to this year and it made me feel old.

    7. Senior Member Sporin's Avatar
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      05-18-2020 10:48 PM #56

    8. Senior Member chucchinchilla's Avatar
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      05-19-2020 12:09 PM #57
      Looking at the cars on AutoTrader the average mileage is 23K. In the before-times I was in a rental car every other week and there's a big difference between cars that have 5K on the clock and anything close to 20K. Anything more than that just felt trashed. Every surface has been beat on then washed hundreds of times so the paint, wheels, interior plastics, carpets, seats, switch gear, trunk, etc., looked tired and mechanically the cars just feel a bit off. That considered 23K miles on a Hertz Corvette =/= 23K on your average Ford Fusion Hybrid rental car. If I cared about GM and had a big car collection sure I'd toss one into the pile for the novelty but as a primary or 2nd car (i.e. the single fun car for me to enjoy/pamper) that's a very hard pass from me.
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      05-19-2020 01:28 PM #58
      Quote Originally Posted by chucchinchilla View Post
      Looking at the cars on AutoTrader the average mileage is 23K. In the before-times I was in a rental car every other week and there's a big difference between cars that have 5K on the clock and anything close to 20K. Anything more than that just felt trashed. Every surface has been beat on then washed hundreds of times so the paint, wheels, interior plastics, carpets, seats, switch gear, trunk, etc., looked tired and mechanically the cars just feel a bit off. That considered 23K miles on a Hertz Corvette =/= 23K on your average Ford Fusion Hybrid rental car. If I cared about GM and had a big car collection sure I'd toss one into the pile for the novelty but as a primary or 2nd car (i.e. the single fun car for me to enjoy/pamper) that's a very hard pass from me.
      Yeah, 23k rental car miles usually feels about like 80k responsible-owner miles.

      A cheap Z06 is interesting, but a cheap Z06 from Hertz......eh, actually, not gonna lie, still interesting.

    10. Member GTijoejoe's Avatar
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      05-19-2020 01:39 PM #59
      Quote Originally Posted by ghost03 View Post
      Yeah, 23k rental car miles usually feels about like 80k responsible-owner miles.

      A cheap Z06 is interesting, but a cheap Z06 from Hertz......eh, actually, not gonna lie, still interesting.
      I thought the same thing
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      05-19-2020 01:45 PM #60
      As I mentioned earlier my shop landlord buys lots of rental cars, mostly enterprise.

      They usually come with 25-30k miles and are VERY clean. I haven't found an issue on any of them outside usually a dent or a scratch and most of the time they pay to have that fixed. (that and the weird specs I noted before)

      He's currently got his daughter in an altima that I didn't see when he first got it, but he is driving it today.. it is mint. He has another loaded one he is personally driving that I borrowed for a weekend to see if the GF wanted to buy, it had 34k? on it and still had protective film all over it, smelled new, not a dent or scratch or issue with the interior. I think sticker was like 31-33k and he was into it for 16,500 I think.


      I have definitely been in some beat up rentals, but all the ones he has had come through are fantastic.

    12. Semi-n00b JIA.B's Avatar
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      05-22-2020 10:27 PM #61
      Well it's official: Hertz North America have officially filed for Ch. 11 bankruptcy with a staggering $19 billion in debt, about $14 billion of which is securitized and has $1 billion in cash.

      They've noted that the used values of cars have fallen and they're hoping to sell 30,000 vehicles per month until the remainder of the year to generate $5 billion. Wonder what it'll do to used car prices.

    13. Member gonzo08452's Avatar
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      05-23-2020 10:31 AM #62
      I worked for Enterprise for 12 years right out of college and made it all the way to Regional Vice President. They always bragged how recession proof the replacement rental car market was.

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      05-23-2020 10:42 AM #63
      Quote Originally Posted by JIA.B View Post
      Wonder what it'll do to used car prices.
      The whole used car thing right now is interesting in general. If prices drop it will cut both ways and probably slow purchases rather than accelerate them. I think the last recession really accelerated a lot of things in motion and aged the fleet.... I could see that happening even more this go round.
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    15. Senior Member Sporin's Avatar
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      05-23-2020 12:52 PM #64
      Hertz's Late-Night Bankruptcy Filing Sends Ripples Through The Auto Industry

      After weeks of hardship due to decimated demand, the car rental giant Hertz filled for Chapter 11 Bankruptcy late Friday night. Hertz has been struggling to keep its head above water since the Covid-19 crisis began, and it seems the company has held out for as long as it could. Its fleets of used cars are now hitting the market, and one company’s misfortune will soon become some car buyer’s killer deal.



      After a tense day of talks with creditors, Hertz filled for Chapter 11 Bankruptcy, according to Automotive News. While Chapter 11 allows the company to continue to operate in order to figure out how to pay debts and hopefully turn the business around, the situation for the car rental company is pretty dire:

      Hertz said it had $1 billion in cash to support its operations, which include Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen. But it might need to raise more, perhaps through added borrowings while the bankruptcy process moves forward, Hertz said.

      The court petition listed about $25.8 billion in assets and $24.4 billion of debts. Its biggest creditors include IBM Corp. and Lyft Inc., according to the document.

      Hertz has traditionally been a leading buyer of fleet cars from the Detroit 3 and other automakers. Last year, Hertz held as many as 567,600 vehicles in its U.S. fleet and 204,000 in its international unit, holding those in the U.S. for an average of 18 months and international vehicles for 12 months, according to a U.S. filing.

      Its biggest suppliers of fleet vehicles were General Motors (21 percent), Fiat Chrysler (18 percent), Ford (12 percent), Kia (10 percent), Toyota (9 percent), Nissan (7 percent) and Hyundai (5 percent), according to the filing.
      Hertz normally leases its fleet, instead of doing buybacks with the auto companies it works with. Normally, Hertz would simply sell off excessive vehicles when demand dropped, but with the used car demand dropping along with travel (Hertz does most of its business at airports) the company had no way to keep its head above water. But selling off inventory may not be enough.

      Hertz already tried selling enough cars to stay afloat, and it didn’t work. In early March Hertz sold 41,000 used cars in the U.S., but pumped the brakes as returns shrank and auto auctions stopped, according to CNN. Used car prices then fell 34.4 percent in April. A ton of new inventory on the market will likely push prices down even more, making it extremely difficult for Hertz to climb out of the hole it is in.
      continueshttps://jalopnik.com/hertzs-late-night-bankruptcy-filing-sends-ripples-throu-1843628287

    16. 05-23-2020 02:26 PM #65
      Tried to rent Hertz in Latin America and it was nearly impossible as they had so many dum rules

      That said this very sad for America ,hertz has been around forever

    17. Member rimtrim's Avatar
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      05-23-2020 06:04 PM #66
      Maybe we should do a thread about the impacts of the pandemic on the auto industry. There are so many different factors, and some of them are working against each other, making it hard to predict some things. The question about Hertz and the used-car market is a case in point. Obviously in the short term there will be an oversupply of used cars, driving down prices. But if we work through the backlog and the rental industry never really recovers, the medium- to long-term effects might be very different. Former rentals are a major source of late-model used cars sold at dealerships. If that pipeline dries up, ultimately there will be a shortage of late-model used cars and prices will go up. That could potentially lead to increased demand for new cars in the lower prices ranges, which is an area where most automakers have made significant cuts in recent years.

      Another question I was wondering about is the impact of more people working from home, potentially for the long term, weighed against the impact of commuters potentially staying away from public transit. People who shift to working from home might buy fewer cars, while people who used to depend on public transit might go out and buy a car instead. On top of all that is the general trend toward lower auto sales during recession periods. I'm not sure which trends will outweigh the others. This is not a time when I would want to be in product planning at an automaker.

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    18. Member Stevo12's Avatar
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      05-23-2020 09:49 PM #67
      Quote Originally Posted by gonzo08452 View Post
      I worked for Enterprise for 12 years right out of college and made it all the way to Regional Vice President. They always bragged how recession proof the replacement rental car market was.
      Yup, I remember that too (worked for Enterprise on/off between 2005-2009)

    19. Senior Member AZGolf's Avatar
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      05-24-2020 01:37 AM #68
      Quote Originally Posted by rimtrim View Post
      The question about Hertz and the used-car market is a case in point. Obviously in the short term there will be an oversupply of used cars, driving down prices.
      It's not clear how many cars they have total, but this is reorganization, not liquidation. Even if Hertz liquidates 75% of their estimated 500,000 vehicles in the US market, that would be 375,000 cars. A quick search says that a little over 40 million used cars were sold in the USA in 2019. So even if Hertz liquidates 400k, that's 0.4 million of the 40 million, or 0.1% impact on the used car market. I honestly don't think that's anything meaningful compared to the effect of COVID-19 itself, which cut vehicle sales by 50%.

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      05-24-2020 11:09 AM #69
      Quote Originally Posted by AZGolf View Post
      It's not clear how many cars they have total, but this is reorganization, not liquidation. Even if Hertz liquidates 75% of their estimated 500,000 vehicles in the US market, that would be 375,000 cars. A quick search says that a little over 40 million used cars were sold in the USA in 2019. So even if Hertz liquidates 400k, that's 0.4 million of the 40 million, or 0.1% impact on the used car market. I honestly don't think that's anything meaningful compared to the effect of COVID-19 itself, which cut vehicle sales by 50%.
      And even if COVID cuts 2020 sales in half that's still only 0.2%. Cars also seem to be fairly elastic demand (I mean, just look at the COVID purchase thread ) so I don't think Hertz is going to have an overwhelming effect on the industry as a whole.

      Still, if I had a 20k mile Chevy Malibu I needed to unload I'd be concerned.

    21. Member rimtrim's Avatar
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      05-24-2020 12:30 PM #70
      Quote Originally Posted by AZGolf View Post
      It's not clear how many cars they have total, but this is reorganization, not liquidation. Even if Hertz liquidates 75% of their estimated 500,000 vehicles in the US market, that would be 375,000 cars. A quick search says that a little over 40 million used cars were sold in the USA in 2019. So even if Hertz liquidates 400k, that's 0.4 million of the 40 million, or 0.1% impact on the used car market. I honestly don't think that's anything meaningful compared to the effect of COVID-19 itself, which cut vehicle sales by 50%.
      Keep in mind, that 40 million number includes everything from Ferraris to a 1996 Century on craigslist. The Hertz sales will be mainly one- to two-year-old mainstream vehicles, which is a smaller slice of the used-car market. And, even though other rental companies may not declare bankruptcy, they're all facing similar problems with low demand, so Hertz may not be the only one to offload a bunch of cars and then reduce orders for new ones. I think it will likely be enough to have a noticeable effect in that part of the market. Like I said, it may be a short-term glut followed by a medium-term shortage as the fleet-to-consumer pipeline dries up. Of course, all of this depends on what "normal" looks like going forward, and how quickly we get there. These things are always difficult to predict. I remember a lot of predictions about the aftermath of the 2009 recession that didn't pan out in the long term.

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      05-26-2020 10:07 PM #71
      Hertz paid top executives $16 million in bonuses ahead of its bankruptcy filing

      New York (CNN Business)Hertz paid out millions of dollars in bonuses to its executives just before its bankruptcy -- and a month after it started laying off thousands of employees.

      Retention bonuses are typical for bankrupt companies that want to prevent their management from abandoning ship. But they're always awkward: the company can't pay its employees or its debts to lenders, but it prioritizes payments to its already handsomely paid bosses.
      Hertz (HTZ) paid a total of $16.2 million to 340 executives on May 19 as part of a plan to keep them in place while the company attempts to reorganize, the company announced in a filing with the Securities and Exchange Commission. The executives will be required to return the money should they leave Hertz on their own before March 31, 2021.
      Paul Stone, who was just promoted to CEO three days before the retention bonuses were awarded, got $700,000 under the plan. Chief Financial Officer Jamere Jackson got $600,000, while Chief Marketing Officer Jodi Allen got about $190,000.
      The company did not respond to a request for comment, but said in its SEC filing that the payments are justified by financial and operational uncertainty that the company and its employees face. Hertz also declared the payments necessary because of the substantial additional efforts undertaken by the company's key employees with a reduced work force, and the risks to the company if key employees decide to leave.

      Still, paying bonuses to executives isn't a great look. The car rental company let go of 14,300 of its workers since April 14 -- nearly half its staff. Hertz has serious financial problems that have been exacerbated by the plunge in air travel in recent months because of the coronavirus pandemic.
      Additional job losses are probably coming at Hertz. The company's press release Friday night said it planned to close an undisclosed number of its locations away from airports. It had 2,600 such locations in the United States as of last year.
      https://www.cnn.com/2020/05/26/inves..._medium=social
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      05-27-2020 01:00 AM #72
      You literally have to pay people to stay and turn the lights off. Happens all the time.
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      05-27-2020 07:09 PM #73
      Quote Originally Posted by The_Real_Stack View Post
      You literally have to pay people to stay and turn the lights off. Happens all the time.
      Plus - this is chapter 11, not chapter 7. If you want to reorg and keep the company running, you need to pay the good people to stay with the company. There's no way to reorg and keep the company going if everyone in leadership just up and leaves. How much is appropriate for retention bonuses is a subject of great debate though. I'd argue that they likely needed very little in the way of bonuses given that this pandemic affects everyone, everywhere. So it's not like they're at risk of running to the competitors since the competitors are all in bad shape too. Minimal retention bonuses should be required in such a scenario.

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      05-27-2020 07:45 PM #74
      Quote Originally Posted by AZGolf View Post
      Plus - this is chapter 11, not chapter 7. If you want to reorg and keep the company running, you need to pay the good people to stay with the company. There's no way to reorg and keep the company going if everyone in leadership just up and leaves. How much is appropriate for retention bonuses is a subject of great debate though. I'd argue that they likely needed very little in the way of bonuses given that this pandemic affects everyone, everywhere. So it's not like they're at risk of running to the competitors since the competitors are all in bad shape too. Minimal retention bonuses should be required in such a scenario.
      Yeah, with $1B in cash left it's not the bottom of the piggy bank, and as ridiculous as it may sound I don't think it's that unusual. Still, the efficacy of retention bonuses is debatable even in good times. These execs have a resume with a huge company that was unprepared in an environment with ridiculously high unemployment. I don't see them as a huge flight risk, and if they do leave, with the number of other people in the job market I'll guess their "wins above replacement" is negative.

      What really bothers me about this is the connotation it leaves about bonuses. I think a bonus is a fantastic incentive to work harder before you've gotten it, and also a good way for companies to share profit with those earning it. Kind of the opposite of greed. But when they're used like this, it looks so greedy and is just easy to write off the concept.
      Last edited by ghost03; 05-27-2020 at 07:48 PM.

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      05-28-2020 08:46 AM #75
      Quote Originally Posted by The_Real_Stack View Post
      You literally have to pay people to stay and turn the lights off. Happens all the time.
      Yup, precisely. The first company I worked for ended up being closed up by the parent company. They offered an offensive retention bonus to stay an additional 8 months. I started looking for another job immediately and ended up leaving 3 months later. Among the few of us who were left, it quickly became a game between various factions to see who could work out the best deal with management. My deal was terrible so I just rolled out one day and didn't come back (after I found another gig).

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