Lobeck Returns To Lead Former ANC Into Car Rental Vanguard

Worldwide Accelerated Leasing Inc. last month purchased ANC Car Rental, parent of Alamo and National, renamed it Vanguard Car Rental USA and ended its five-year financial struggle.

William Lobeck—a former president of National Car Rental who subsequently headed National and Alamo in the late 1990s as president and CEO of Republic Industries' automotive rental group (predecessor of ANC)—on Oct. 14 became CEO. Former CEO William Plamondon, who guided ANC during the last year of its bankruptcy proceedings, will continue to serve Vanguard as a consultant.

As part of the sale, Cerberus Capital Management LP, a major shareholder in Worldwide Accelerated Leasing, is assuming more than $2 billion in vehicle debt and other current liabilities, $60 million in non-vehicle debt and $150 million of working capital.

The rescue of ANC literally was eleventh hour, according to Neil Abrams, president of Abrams International Consulting based in Purchase, N.Y. "The viability of the whole ANC business was highly in question," he said. Of the many challenges facing Lobeck, one of the main ones is "understanding the differentiation and value of the National and Alamo brands. Both brands have lost their identity."

Indeed, a cornerstone of Lobeck's plans to resuscitate the company is separating the two brands at the airport counter. To save costs, ANC had consolidated the Alamo and National counters at some major airports, although Lobeck said that probably occurred at fewer than 30 airports and was less extensive than perceived. "We've got to restore the quality of service and the company to what it was," he said, noting that National's base always has been the frequent business traveler and Alamo's, the value-conscious leisure traveler.

Another initiative is essentially a matter of picking up where he left off when he departed Republic in 1998. As originally planned, Lobeck expects to implement Global Odyssey—the soup-to-nuts automated system that was installed at National beginning in 1999—at Alamo, which has been operating on a separate legacy system. The company has taken the first steps in launching the system companywide and plans to have it completed by the end of next June.

In addition, Lobeck will attempt to gain an edge over the competition by implementing the 2004 model fleet early. "Our goal is to have 75 percent to 80 percent of 2004 cars in the fleet by the end of December"—as opposed to March and April of next year, which is the industry norm, he said.

Consolidation of the brand's two offices into one building also is on the drawing board, Lobeck said. "It could be in Fort Lauderdale," the current location of the two headquarters, "or Boca Raton," he said. "We don't need all the space of two large facilities." He added that company staff "are out talking to people" to find out how National can improve the quality of service and convenience to better meet the needs of the hardcore business traveler.

Lobeck's return also restores some of the long-term National management team in finance and fleet that were purged several years ago when Alamo management, following the purchase of ANC by former Alamo head Mike Egan, took over the company. Key among them is Jeff Parell, former president of Republic's North American car rental division, who is back as executive vice president and COO. Thomas Kennedy has been appointed senior vice president and CFO and Tyler Best is Vanguard's senior vice president and CIO.

One mistake ANC made in recent years was scrapping its local market locations, Abrams said. He noted that with business travel flat, this is one of the most promising growth markets for car rental. Lobeck has no plans to regain any of those locations, but he is more sanguine about Vanguard's prospects at the airport. "We saw an uptick in mid-September and mid-October," he said. "We see more people on the road." In addition, since June there has been an uptick of leisure volume at the airport, which bodes well for Alamo. Another bright spot is the United Kingdom, where National is the market leader. More generally, Lobeck said he is optimistic about Vanguard's prospects, given the fact "the car rental industry is far stronger and more rational than it was five years ago."