Hertz

The company's early years

The Hertz Corporation, originally known as Rent-a-Car Inc., was founded by Chicago, Illinois native Walter L. Jacobs in 1918. This small car rental operation began with a dozen Model T Ford cars. Within five years, Jacobs' fleet expanded to 600 vehicles—generating annual revenues of approximately US$1 million. John D. Hertz, owner of Yellow Truck and Coach Manufacturing Company, developed an interest in the brand, leading to him purchasing the company in 1923. It was then renamed to Hertz Drive-Ur-Self System. Jacobs continued to serve as president and chief operating officer of Hertz Drive-Ur-Self System until 1961.After three years of ownership, John Hertz sold the rental car brand to General Motors Corporation in 1926. GM purchased the rest of Yellow Truck and Coach Manufacturing Company in 1943. Under the ownership of General Motors, the company released the first rental car charge card in 1926, opened its first rental car location at Chicago's Midway Airport in 1932, and introduced the first one-way rental plan in 1933. Hertz Drive-Ur-Self System expanded services to Canada in 1938 and Europe in 1950.

Development of the corporation

John Hertz repurchased the brand from General Motors in 1953 through his other company, The Omnibus Corporation, which he renamed to The Hertz Corporation. In 1954, its stock began trading on the New York Stock Exchange, and it purchased a New York-based truck leasing company, Metropolitan Distributors, including a fleet of 4,000 trucks. This acquisition increased The Hertz Corporation's fleet to 15,500 trucks and 12,900 passenger cars. During the General Motors ownership, the company had sold many local Hertz franchises to independent business entities. With the financial backing of investment bankers Lehman Brothers, led by Lehman partner and Hertz director, Frank J. Manheim, Hertz began a buyback program for the franchises in the US, then expanded globally. Manheim predicted the global growth and devised the strategy which made “Hertz” a household name and led to dynamic growth in the company's market capitalization from $7 million in 1953 to $100 million in 1965.The company expanded to South America in 1961. In 1967, The Hertz Corporation became a subsidiary of Radio Corporation of America. In 1985, the car rental company was sold to UAL Corporation, later known as Allegis Corporation, for a cash deal of US$587.5 million. This acquisition expanded Hertz's vehicle renting and leasing, with nearly 400,000 cars and trucks in 120 countries across the globe.In the summer of 1987, Allegis Corporation chairman and president Frank A. Olson announced the company would be selling Hertz due to internal changes. Park Ridge Corporation, which was owned and operated under Ford Motor Company, purchased Hertz in October 1987 for US$1.3 billion, and Hertz relocated its headquarters from Midtown Manhattan to Park Ridge, New Jersey in 1988.In 2002, Hertz became the first international car rental company to open in China. In 2013, Hertz began partnering with China's largest car rental company, China Auto Rental. In 2016, it reduced its ownership stake but announced a continuing commercial relationship through 2023.By the second quarter of 2005, Hertz produced about ten percent of Ford's overall pre-tax profit. However, after 18 years of ownership, the Ford Motor Company announced it would be selling the Hertz brand with the intent to focus more on building Ford cars and trucks. Private equity firms Clayton, Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity agreed to purchase all shares of common stock in Hertz for an estimated US$15 billion, including debt, and the business itself for US$5.6 billion in 2005.The Clayton, Dubilier & Rice consortium took Hertz Global Holdings public again on the New York Stock Exchange in November 2006, and Hertz began to expand through Europe.

Hertz launched subbrand "Simply Wheelz" in September 2007 for economy-minded and leisure-market audiences. By 2008, the service expanded to airports in California, Florida, and the McCarran International Airport in Las Vegas, Nevada. Once an online reservation was made, customers were able to choose one of six types of vehicles at self-service rental kiosks. Simply Wheelz was rebranded as Advantage Rent-a-Car in the fall of 2009.In late December 2009, Hertz announced the acquisition of used cars dealer British Car Auctions from London-based equity firm Montagu Private Equity for an estimated £390 million.

Dollar Thrifty and Advantage transactions

In November 2012, Hertz Global Holdings Chairman and CEO Mark P. Frissora announced the company's purchase of Dollar Thrifty Automotive Group, a U.S.-based car rental brand with headquarters in Tulsa, Oklahoma, for US$2.3 billion. The business transaction included Hertz paying $87.50 per share of the Dollar Thrifty stock. The deal was finalized on November 19, 2012, and resulted in a combined 10,400 locations in approximately 150 countries. Before the merge, Dollar Thrifty was the fourth-largest car rental company.In December 2012, Hertz announced it would sell its Advantage Rent a Car unit to Franchise Services of North America and Macquarie Capital after the acquisition of Dollar Thrifty Automotive Group was finalized.

Modern corporate changes

In May 2013, Frissora and Florida Governor Rick Scott announced Hertz Global Holdings would relocate their worldwide headquarters from Park Ridge, New Jersey to Estero, Florida. Relocation to Southwest Florida was influenced by the state's travel and tourism industry, proximity to Orlando and Miami, to condense corporate offices, and to increase efficiency of Hertz Global brands. A temporary office building in Naples, Florida housed 640 employees until construction of a new facility was completed in 2015.John P. Tague replaced Frissora as chief executive officer and president of The Hertz Corporation in November 2014.Kathryn V. Marinello, former CEO of Stream Global Services, was appointed president and chief executive officer of The Hertz Corporation on January 2, 2017, following John Tague's retirement.Marinello resigned as CEO on May 18, 2020, and Hertz announced that Paul Stone as new president and chief executive. Stone previously served as Hertz's executive vice president and chief retail operations officer for North America.On Oct. 5, Hertz announced it has named Mark Fields interim CEO and Paul Stone president and chief operations officer.In February 2022, Stephen M. Scherr was named Chief Executive Officer of Hertz.

Bankruptcy

As a result of the COVID-19 pandemic, on April 30, 2020, Hertz announced that it had missed lease payments on its fleet and was seeking support from its lenders, including activist investor Carl Icahn, in an attempt to avoid bankruptcy. Marinello resigned as CEO on May 18, 2020, and Hertz announced that Paul Stone would be the new president and chief executive. Stone previously served as Hertz's executive vice president and chief retail operations officer for North America. On May 22, 2020, the Wall Street Journal reported that Hertz was preparing to file for bankruptcy because it did not reach an agreement with top lenders. That same day, the company filed for Chapter 11 bankruptcy. Carl Icahn held 39% of Hertz's shares when it filed for bankruptcy on May 22, 2020, and he controlled three board seats. He invested a total of $2.3 billion into Hertz shares from 2014 to 2020.Hertz financed itself mostly by taking out loans secured by its fleet of cars, and if the cars fell in value, Hertz's lenders had the right to demand an immediate payment, reducing the amount of the loan, so they were still comfortably covered by the cars’ now-lower value. Because of the crisis, used-car values and sales volumes fell right as Hertz lost most of its customers. The bankruptcy filing started a 60-day clock, during which Hertz's secured lenders must wait before they can foreclose on the 400,000 U.S. cars that were financed through such arrangements.Despite the bankruptcy filing, Hertz announced on June 11 that it was seeking to raise up to $1 billion in new equity . The Wall Street Journal characterized the potential stock sale as a "seemingly unprecedented move for a large bankrupt company eager to capitalize on market anomalies," as its stock price rose nearly 1000% from a low of 59 cents after its bankruptcy filing to $5.50 a share. Hertz's stock has been heavily traded by retail investors, becoming one of the most-traded stocks. Hertz sold $29 million in stock before the Securities Exchange Commission halted further sales. The stock was delisted from the New York Stock Exchange in October 2020.On July 1, 2021, Hertz emerged from Chapter 11 bankruptcy and changed its ticker symbol from HTZGQ to HTZZ.In October 2021, Mark Fields was named interim CEO of Hertz with a focus on forward looking investments. On October 25, 2021, Fields announced that Hertz will buy 100,000 Tesla vehicles citing his goal of fleet electrification and that Tesla is the "only manufacturer that can produce EVs at scale".In November 2021, the company went public again on the Nasdaq with symbol HTZ.In February 2022, Stephen M. Scherr was named CEO of Hertz.

Accusing customers of car theft

Since 2019, Hertz has been embroiled in a mounting controversy where numerous reports have emerged of Hertz falsely accusing its customers of having stolen automobiles which were under an active rental agreement. Many of the victims report having been arrested in full view of their families and at gun point. Victims report loss of licensure, professional credentials and employment while their falsely filed felonies languish through the system, depriving them of income and their rights. Victims report being jailed for months before being released. Victim reports that Hertz claims that outdated computer systems are to blame, local and corporate systems "not communicating correctly", but victim profiles indicate that these false arrests are more likely to happen to minority groups. In February 2022, a judge forced Hertz to reveal that it reports about 3,365 of its customers to the police every year for theft. Hertz claims that such instances are only a "rare situation" as this is only 0.014% of their 25 million annual transactions in the United States. According to reports, 47 customers have filed lawsuits against Hertz for misreporting cars as stolen resulting in many false arrests and imprisonment.

In December 2022, Hertz announced the settlement of 364 pending claims relating to vehicle theft reporting, bringing resolution to more than 95% of its pending theft reporting claims. In this settlement, Hertz agreed to pay approximately $168 million by year-end to resolve these disputes.