A Hertz location at Munich Airport
Hertz Global Holdings announced late Friday the resignation of CEO Stephen Scherr, who had joined the company just two years earlier.
Scherr, a former Goldman Sachs CFO, had joined the car rental company in February 2022, about seven months after Hertz exited Chapter 11 bankruptcy. The executive moves come after the rental car company posted a fourth-quarter 2023 loss of $348 million compared with income of $116 million a year prior.
The automaker’s board of directors immediately announced the appointment of Gil West, who served as the COO of Delta Air Lines from 2008 through 2020 and later as the COO of Cruise, an operator of driverless taxis, also known as robotaxis, that was recently forced to halt its operations in all markets after the state of California pulled its operating permit stating that its vehicles “are not safe for public operation.” Scherr was one of nine executives that General Motors, which owns Cruise, dismissed at the end of last year.
West, come April 1, will be the latest in a long line of Hertz CEOs who have been tasked with turning the company into a formidable competitor against archrival Avis Budget Group. He is also not the first former airline executive to attempt this. In 2014, Carl Icahn, who controlled the company at the time, installed former United Airlines COO John Tague as Hertz CEO. Tague lasted about two years after misreading consumer sentiment, which was shifting in the direction of SUVs versus sedans.
After emerging from bankruptcy, the company started making large, headline-worthy investments in electric vehicles. Under its new owners, Knighthead Capital Management and Certares Management, the rental company announced in late 2021 plans to purchase 100,000 Tesla electric vehicles and later said that it will rent 50,000 of them to Uber drivers.
The rental giant, which had declared bankruptcy at the start of the pandemic in 2020, said at the time it is making a substantial investment in an electric-vehicle fleet as well as charging infrastructure. Hertz exited Chapter 11 in June.
The move was intended to give a post-bankruptcy Hertz a high-tech fleet and to give customers greener options, the company said.
“Today’s partnership with Uber is another major step forward in Hertz becoming an essential component of the modern mobility ecosystem and executing on our commitment to being an environmentally forward company,” said Mark Fields, the company’s interim CEO at the time.
Then in April 2022, Hertz further strengthened its commitment to EVs, announcing a deal to acquire up to 65,000 electric vehicles from Swedish automaker Polestar, a unit of Volvo Cars, Hertz also announced separate deals with Volvo and GM for additional electric cars, although the company ultimately acquired very few compared to what the original announcements called for.
The automaker said at the time that the five-year purchase agreement is part of the rental car company’s plan to expand its offerings in the electrically-powered vehicle space.
Hertz will initially offer customers the Polestar 2, the EV maker’s main production model, which competes with the Tesla Model 3, in its retail and rideshare fleets, it said.
“Today’s partnership with Polestar further builds on our ambition to become a leading participant in the modern mobility ecosystem and doing so as an environmentally-forward company,” said Scherr at the time.
“By working with EV industry leaders like Polestar, we can help accelerate the adoption of electrification while providing renters, corporate customers and rideshare partners a premium EV product, exceptional experience and lower carbon footprint.”
In a statement, Hertz said that Scherr will assist with the CEO transition until he leaves the company and its board on March 31.
(Photo: Accura Media Group)
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