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Hertz announces CEO stepdown amid EV cutback

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Market Trends
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Hertz CEO Stephen Scherr has announced he’ll step down March 31 following the company’s electric vehicle (EV) pullout.

Gil West, former chief operating officer for Delta Airlines and General Motors’ Cruise unit, will become COO for Hertz April 1, and join the board. West and Scherr will work together over the next several weeks to ensure a smooth transition, Hertz said in a news release.

“We are thrilled to have Gil join Hertz as chief executive officer,” said Tom Wagner, Hertz Board vice chair, in the release. “Gil’s experience as a successful leader in operationally intensive businesses will further strengthen the company’s world-class team of over 27,000 global employees who work tirelessly to deliver outstanding service to customers daily. We are appreciative of Stephen’s contribution over the last two years, including on a number of key strategic initiatives, which Gil will now lead in their continued execution.”

In January, Hertz dumped nearly 20,000 EVs, or about one-third of its global EV fleet, spurring political attacks on the Biden Administration’s climate change policy as the American Car Rental Association (ACRA) geared up lobbying around the likelihood of EVs becoming more prominent in the industry.

In a Jan. 11 SEC filing, Hertz said it planned to reinvest money from selling the EVs into internal combustion engine (ICE) vehicles to meet customer demand. 

At the time, Scherr told the New York Times that Tesla’s decision to cut the cost of its vehicles by 30% devalued Hertz’s fleet. Tesla also wouldn’t play ball with discounting parts for the rental company, according to the article.  

“One potential reason the electric vehicles at Hertz were involved in more accidents, Mr. Scherr said, was that many people renting those cars did not have experience with the technology despite efforts by the company to educate customers,” the New York Times article said. “Electric cars accelerate more quickly than gasoline vehicles, and they are heavier. Demand for the vehicles was also less than the company had expected, Mr. Scherr continued.”

According to Fox Business, Scherr began at Hertz as the company was coming out of bankruptcy, spending two years as CEO, after a 30-year tenure at Goldman Sachs. And in February, Hertz announced its biggest quarterly loss since 2020 after its decision to move away from EVs.

“Over the last two years, the Hertz team has worked diligently to put the company on track for long-term success in a changing automotive landscape,” Scherr said, in the news release. “Hertz is well-positioned for the future, and I look forward to seeing the company execute on its strategy as a leader in mobility.”

West says he’s excited to join Hertz and “build on its extraordinary family of brands and global network.”

“With a 106-year history, Hertz enjoys incredible brand strength and customer loyalty and I look forward to working with the team to achieve its potential for our customers, team members and shareholders,” he said, in the release.

Colin Farmer, Hertz Board lead director, said West’s prior career experience will work well in leading the company.

“Gil’s success in leading over 70,000 people at Delta and orchestrating highly effective operational turnarounds will position him well to lead Hertz,” he said. “He will be able to build upon the strategic projects begun during Stephen’s tenure, including improvements to technology, commercial partnerships and the revitalization of our value brands. Gil’s prior experience in transportation, travel and mobility will give him important perspective on how to thoughtfully lead Hertz into the future.”

The Biden Administration announced $623 million in grants to build the EV charging network on the same day Hertz filed with the SEC. Last year, the administration used Hertz as an example of a company committed to the expansion of EVs. 


Featured image: Hertz logo provided by Hertz

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