American car rental firm Hertz announced that it would replace its current chief executive officer after a catastrophic bet on electric vehicles. According to the press release, this major company shakeup is in response to CEO Stephen Scherr’s decision to leave its position on March 31, 2024.
Company shakeup
Hertz announced Friday that the Chief Operating Officer of Delta Airlines and General Motors‘ Cruise unit will take the place of Stephen Scherr as the company’s Chief Executive.
Gil West will officially claim the position starting on April 1, 2024, following Stephen Scherr’s departure on March 31, 2024. At the same time, he will also succeed Mr. Scherr’s position as a member of the Board of Directors.
The new and former Hertz CEO will cooperate over the following weeks to guarantee a smooth shift.
“We are thrilled to have Gil join Hertz as Chief Executive Officer. 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.”
Hertz
Brief background
This company shakeup came just several months after Hertz suffered from its failed attempt in electric vehicles. In 2022, the American car rental firm placed an enormous order of 100,000 Tesla Model 3s and Ys. It then expanded its electrification plans with new orders from other OEMs, including Polestar and General Motors.
Unfortunately, the value of electric vehicles continues to decline, especially for Tesla. Last year, the Musk-led automaker launched a series of price cuts, which caused Hertz to lose almost $250 million, prompting it to resell the Tesla EVs in its fleet.
Hertz sells used EVs, including Teslas
Hertz decided to resell the electric vehicles it previously acquired due to the high cost of repair and maintenance, particularly Tesla EVs.
It started reducing its electric vehicle fleet from 60,000 to 20,000 units, with plans to use the funds to expand its traditional ICE-powered vehicle fleet. The move resulted in a $245 million charge for Hertz, which reported its highest quarterly loss since the pandemic.
As of late January, 657 Tesla EVs were listed on Hertz’s car sales website.
