Hertz Global Holdings Inc. replaces its CEO after a disastrous bet on electric vehicles that the company began backing away from in recent months.
Stephen Scherr, who led Hertz for just over two years after three decades at Goldman Sachs Group Inc., has decided to retire, the car rental company said late Friday. He will be replaced by Gil West, former chief operating officer of General Motors’ Cruise robotaxi division. West will also join the board on April 1, according to the statement, confirming an earlier Bloomberg report.
Scherr, 59, joined Hertz a few months after the company emerged from bankruptcy and began making high-profile bets on electric vehicles. Under new owners Knighthead Capital Management and Certares Management, the rental company announced plans to order 100,000 vehicles from Tesla Inc., sending the automaker’s market capitalization soaring above a record high. 1 trillion dollars mark at that time.
Within months of Scherr taking over, Hertz doubled its electric vehicle sales by placing large orders with polar Staran electric vehicle maker owned by China’s Geely and Sweden’s Volvo Car, and GM. The company ended up buying a small number of vehicles from the two companies, the spokesman said.
Those bets went awry last year when Tesla prices reduced across its entire lineup to continue growing vehicle sales. This sharply lowered the resale value of used Model 3 sedans and Model Y crossovers immediately after Hertz added tens of thousands these vehicles into your fleet.
By December, Hertz began selling off. 20,000 electric vehiclesor about a third of its electric vehicle fleet. The German company Sixt SE, Europe’s leading car rental company, is taking even more drastic measures. Tesla phase out its entire fleet.
Hertz announced its plans to sell electric vehicles in January, citing low demand, costly depreciation and costly repairs. The Estero, Fla.-based company took on $245 million in costs and reported its biggest quarterly loss since the pandemic.
Hertz shares fell 2% after regular trading in New York on Friday.
Read more: Hertz’s Tesla Fire Sale Presages a Reckoning for Electric Vehicles
Scherr’s successor, West, was one of nine Cruise executives whom GM fired late last year after California regulators accused the company of hiding information about one of its self-driving cars. hits and pulls a pedestrian.
Before joining Cruz as chief operating officer in early 2021, West held the same position at Delta Air Lines Inc. There he was instrumental in the integration with Northwest Airlines and is credited with improving efficiency and productivity.
“Gil is a fantastic cameraman. We’ve worked side by side for a dozen years,” Delta CEO Ed Bastian said in an interview. “He’s innovative, he loves technology, he’s meticulous, he’s curious and he loves a challenge—all great qualities.” Play video
Even before the Hertz acquisition was completed, Knighthead’s Tom Wagner and Certares’ Greg O’Hara identified West as a candidate for CEO and approached him about leaving Cruise, according to two people familiar with the discussions, who asked not to be identified. . But GM, which had big plans for robotaxis at the time, didn’t want to let West go. So investors named Mark Fields, who had led Ford Motor Co., as Hertz’s interim CEO and conducted a full CEO search, settling on Scherra in February 2022.
Once he left Cruz, Wagner and O’Hara approached West again, confident that his personal experience with electric vehicles and understanding of the pitfalls of electrification would make him a better fit. And they liked that because he was a Southwest Florida resident, he wouldn’t have to travel far to Hertz headquarters, the people said.
West will be the latest in a long line of Hertz executives tasked with transforming the company into a more profitable player and a tougher competitor to closely related Enterprise Holdings Inc. companies. and Avis Budget Group Inc.
Before Knighthead and Certares swooped in to save Hertz from bankruptcy, billionaire investor Carl Icahn was struggling to put some shine on the company. hundred year old business as the controlling shareholder. Misunderstanding the auto market has cost Hertz dearly in the past, including under John Tague, the former United Airlines chief operating officer whom Icahn named CEO in 2014.
Teig inherited an aging fleet from ousted CEO Mark Frissora and I drove cars for a long time as consumer tastes shifted towards SUVs. He worked in this position for just over two years.
Hertz said Scherr will assist in the CEO transition until he leaves the company and its board of directors on March 31.