Hertz files for Bankruptcy

[pedro47]

This is a good moved by Hertz IMO. Now they can lower their over all debt, their automobiles inventories, ther locations, utilities costs and their employees staff.

 

[Brett]

This is a good moved by Hertz IMO. Now they can lower their over all debt, their automobiles inventories, ther locations, utilities costs and their employees staff.

It may be a "good move" but not so good for their shareholders, bond holders and banks

 

[Big Matt]

The problem airlines are having translates to rental cars. Hertz, Thrifty and Dollar buy a depreciating asset and run it into the ground before unloading the cars. Cars sitting around, going down in value with property taxes isn't a good business to be in.

 

[CalGalTraveler]

I wonder why they haven't moved to a hotel/timeshare model and shift the ownership and risk of the capital assets to someone else while they manage the rental business.

 

[bbodb1]

I wonder why auto rental companies have yet to take a more aggressive approach to selling their rental cars that are getting close to the end of their service period with the company. With rental car demand gone, it stands to reason a large number of higher mileage vehicles will have very little service life left to the company. Why not get aggressive in making more reasonable sales of these vehicles while paring down fleet size?

 

[Big Matt]

I wonder why auto rental companies have yet to take a more aggressive approach to selling their rental cars that are getting close to the end of their service period with the company. With rental car demand gone, it stands to reason a large number of higher mileage vehicles will have very little service life left to the company. Why not get aggressive in making more reasonable sales of these vehicles while paring down fleet size?

Nobody is buying cars right now. Terrible time to flood the market. They won't get what they are worth.

 

[nerodog]

I will need to check as I have a Hertz car rental for Sept. I hope it will be ok.

 

[DaveNV]

I will need to check as I have a Hertz car rental for Sept. I hope it will be ok.

Same here. But mine is also in Hawaii in August, so I don't know if I'm even going to be able to go.

Dave

 

[nerodog]

Same here. But mine is also in Hawaii in August, so I don't know if I'm even going to be able to go.

Dave

Mine is in Connecticut...

 

[turkel]

Hertz does actively sell their fleet. My son bought his first car from them. They advertise online and have sales lots.

 

[csodjd]

It may be a "good move" but not so good for their shareholders, bond holders and banks

While COVID may have hastened this, my stock advisory recommended selling puts on Hertz with 2021 expiration dates about 6 months ago, and considered it a near sure thing. The had determined Hertz had no way to avoid bankruptcy by then. And that was before there was any COVID. The question now is whether, in light of COVID, they'll be able to get out of 11, or if they're going to be acquired by someone.

 

[rapmarks]

Hertz also lost about 1300 cars in airport fire

 

[Sea Six]

Hertz lost a LOT of cars to a fire in Ft Myers a few weeks ago. Something like 3000 cars burned up (not all Hertz) If they drop their sponsorship of the sports arena, they will have saved another fortune.

 

[DaveNV]

I have my rental reservation for August in Hawaii with Hertz through Priceline. I received this email today:

"Our records indicate that you have an upcoming rental car reservation with Hertz Corporation in KONA.

You may have heard news reports that The Hertz Corporation, operator of the Hertz, Dollar, Thrifty and Firefly brands, has filed for bankruptcy. Recent information from Hertz indicates that there will be no impact to existing reservations as locations will continue to operate and service customers. If anything changes, we will reach out to you again.

If you have any questions or concerns, please reach out to our customer care team. We appreciate your business and look forward to serving your future travel needs.

Sincerely,

The Customer Care Team"

********

So we'll see what happens.

Dave

 

[Sea Six]

I suspect you won't be disappointed until you show up for your car.

 

[controller1]

Hertz also lost about 1300 cars in airport fire

They probably wish they had lost 33,000 cars in that airport fire!

 

[Sea Six]

They probably wish they had lost 33,000 cars in that airport fire!

I'd guess insurance pays better than rental resale.

 

[nerodog]

H

I have my rental reservation for August in Hawaii with Hertz through Priceline. I received this email today:

"Our records indicate that you have an upcoming rental car reservation with Hertz Corporation in KONA.

You may have heard news reports that The Hertz Corporation, operator of the Hertz, Dollar, Thrifty and Firefly brands, has filed for bankruptcy. Recent information from Hertz indicates that there will be no impact to existing reservations as locations will continue to operate and service customers. If anything changes, we will reach out to you again.

If you have any questions or concerns, please reach out to our customer care team. We appreciate your business and look forward to serving your future travel needs.

Sincerely,

The Customer Care Team"

********

So we'll see what happens.

Dave

Thanks for this update. Very helpful and one less thing to think about !!!

 

[Big Matt]

Hertz does actively sell their fleet. My son bought his first car from them. They advertise online and have sales lots.

There is one 10 minutes from my house and it is packed with cars

 

[dioxide45]

This is chapter 11 filing. They could convert to chapter 7 but probably doubtful. Companies go through Chapter 11 all the time and come out on the other side still operating.

 

[Big Matt]

Chapter 11 - keeps creditors at by while a company restructures their debt obligations. I don't see Hertz going away as a brand right now.

 

[bbodb1]

Hertz does actively sell their fleet. My son bought his first car from them. They advertise online and have sales lots.

I am aware of their sales, @turkel but in their current state of financial affairs, it would seem to be prudent to trim off their oldest assets they will not likely be able to use for quite some time. Not only would this reduce their inventory, it would also reduce their maintenance costs with respect to those vehicles.

@Big Matt 's point is accurate too (used car sales are negligible at this time), but Hertz is not exactly in a position where they can wait several months for the economy to improve as it appears they need to take action in the very immediate future to survive. Regardless of what direction they choose, Hertz will emerge from COVID 19 a smaller version of the company that existed prior to COVID 19.

It will also be interesting to see if the same forces work on the Avis family of car rental brands. The one thing that seems certain is there will be less consumer choice at the not-as-large airports, and that could change our travel habits too. It may become fiscally prudent to fly into larger cities somewhere near your final destination and drive further to your final destination than we do now in order to keep travel affordable.

 

[rapmarks]

There was an article about a local Scrap metal company buying the cars that burned in the fire and pointing out that hertz is the only one that did not use The local company

 

[bobpark56]

My understanding is that this bankruptcy is just for Hertz US. It does not apply to Hertz in other countries.

 

[Big Matt]

The hard part about their situation is that there is a huge unknown on the future of business travel (Hertz's bread and butter). If you really believe that business travel will decrease forever because of the pandemic then selling off the cars makes sense. If you believe that everything will be back to normal, they will need to buy new cars knowing that they will depreciate right away. Very tough spot to be in.