Hertz CEO resigns amid Electric Vehicle fiasco – ET Auto

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Stephen Scherr, Chief Executive Officer

New Delhi: Hertz Global Holdings Inc. is bidding farewell to its Chief Executive Officer, Stephen Scherr. The rental-car giant, reeling from costly EV repairs and plummeting resale values, announced Scherr’s departure on Friday, marking the end of his tenure of just over two years. Taking the reins is Gil West, former Chief Operating Officer of General Motors Co.’s Cruise unit, set to join the board of directors on April 1, a global news organisation reported.

Scherr’s exit follows a series of ambitious moves by Hertz, undertaken shortly after emerging from bankruptcy. Backed by Knighthead Capital Management and Certares Management, the company committed to acquiring 100,000 Teslas, igniting a surge in the automaker’s valuation. However, as Tesla slashed prices and resale values tanked, Hertz found itself saddled with a fleet of depreciating assets, prompting the sale of 20,000 EVs by December.

The repercussions of Hertz’s EV misstep reverberated across the industry, with Sixt SE, a major European car rental company, opting to phase out Teslas entirely. Citing lackluster demand and mounting losses, Hertz disclosed a USD 245 million charge and reported its largest quarterly loss since the onset of the pandemic.

Gil West steps into the role of CEO amidst a challenging landscape, having weathered controversies at GM’s Cruise unit, where he served as COO until his departure last year. Despite these challenges, West brings with him a wealth of experience, having previously held executive positions at Delta Air Lines Inc., where he earned accolades for his operational prowess.

West’s appointment underscores Hertz’s commitment to charting a new course after its EV gamble soured. As he assumes leadership, all eyes will be on Hertz’s efforts to rebound from its recent setbacks and regain its footing in a fiercely competitive market dominated by Enterprise Holdings Inc. and Avis Budget Group Inc.

The departure of Scherr marks another chapter in Hertz’s tumultuous history, characterized by struggles to adapt to shifting market dynamics and technological disruptions. As Hertz embarks on this new chapter under West’s stewardship, the industry watches with bated breath to see if the rental-car giant can navigate the road ahead and emerge stronger from its recent challenges.

Source: Fortune.com

  • Published On Mar 19, 2024 at 11:36 AM IST

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