Hertz is in more than a pickle.
Hertz is in real trouble. What will Paul's strategy to move our debt ridden company forward? Look at the insurmountable problems he now faces:
- Declared Chapter 11
- No end in sight for COVID-19
- Let go 30% of your workforce that will give you limited options to ramp up operations without substantial future costs.
- 80% of your fleet is collateralized and Hertz will need to part ways with a lot of this.- there goes your market share!
- No real insurance replacement business to keep $$ flowing into the bank.
- Loss of big corporate accounts to Taylor because of uncertainty, garbage fleet, and poor service.
- All incentives will be cut to the bone, and so goes ancillary revenue.
- Facility and Labor costs increase due to safety measures will drive daily rates even higher pushing Hertz rentals beyond what customers will book resulting in lower UTE.
- Paul will not be able to borrow money for the much needed technology upgrades to stay relevant over the next 3 years.
- Taylor, Sixt, Payless, Uber, Lift, and to a smaller extent Avis will continue to erode market share leading to higher operating costs per transaction.
And the final problem will be potential legal issues with endemic accounting iregularites that will keep investors and creditors from doing business with this toxic organization.
Paul needs a Tylenol and a shot of Jack! This is going to be a real headache until he is pushed out of the plane at 30,000 feet. I hope he has a golden parachute like the old bag Kathy did.