Sometimes growth is associated with pain. That seems to be the case for Hertz, which has been beleaguered by recent quarterly losses, and its relatively new CEO, Gil West, who took over April 1.
West inherited Hertz's significant electric vehicle selloff. The company had been a leader in investing in EVs, and West's predecessor, Stephen Scherr, often touted that corporate customers were strong candidates for EV usage, but demand turned out not to meet supply. In January, Scherr announced the company was in the process of offloading 20,000 EVs from its U.S. fleet. After West's arrival, an additional 10,000 EVs were to be cut.
The former COO of Delta Air Lines, West didn't waste any time in revamping the executive suite with many former colleagues from the carrier, including Sandeep Dube as chief commercial officer. Hertz's CFO also departed and was replaced by another aviation executive, Scott Haralson.
During a second-quarter earnings call, in which the company reported a net loss of $865 million after a profit the year prior, West announced the company was in the midst of a "critical transformation," with a priority of "getting back to the basics, operational excellence and unmatched customer service."
Three pillars of the plan include reducing its fleet by accelerating rotation, focusing on driving more quality revenue through direct booking channels, and working on its cost management to be more efficient by reducing operating costs.
It remains to be seen if the plan will work. Hertz reported a third-quarter loss of $1.33 billion, down from a profit of $629 million a year prior. The company may have more pains to endure before getting to the other side. The turnaround plan is expected to be carried out through the end of 2025.