Elizabeth Warren Wants to Know How Hertz Went From Bankruptcy to Buybacks in Six Months – The New Republic

Posted: December 13, 2021 at 2:37 am

Have you been inside a Hertz office lately? I was, last month, at Los Angeles International Airport. It didnt feel like a successful business. It wasnt like stepping into, say, an Apple store, agleam with brushed steel and white walls and pleasant, impeccably groomed salespersons. It wasnt even like stepping into a Starbucks. It was like stepping into a soup kitchen for the homeless: short-staffed, shabby decor, long lines, unhappy customers. A clerk told me to fetch my car from a separate office a couple of miles away (Take an Uber); the industrial-looking building I was sent to didnt have any kind of sign indicating whom I was doing business with. The sole attendant on the premises said it didnt matter that Id booked a reservation. There were no cars. The managers had overbooked, he said, and whenever they do that, they go home and leave me to handle irate customers like you. I felt sorry for him.

Yes, Covid-19 has created supply chain problems for Hertz and other rental car companies, and also a labor shortage that makes it hard for Hertz to staff back up. Still, it was hard to reconcile my customer experience with an enterprise thats so successful its profit margin is 39 percent and so flush that its buying back its own stock. Profits were up not because Hertz was renting more cars; they were up because Hertz was renting fewer cars, pricing them, according to an analyst cited by Warren, 147 percent higher than before the pandemic.

The supply chain snafu drove up the price of cars, but, as Warren further pointed out, Hertzs pricing for what it called the elements in vehicle rental pricing that management has the ability to control was up 44 percent over the previous year. Hertz wasnt enjoying financial success in spite of its seedy rental offices, its loss of half its workforce, its inability to furnish many rental cars, and the outrageously high price it commanded for those few rental cars that were available. It was enjoying financial success because of these things. It was acting very much like a corporation owned by two finance companies.

Whats happening at Hertz is emblematic of whats been happening at American corporations. Some people look at this picture and conclude that corporations increased concentration and rising profits demonstrate theyre becoming more powerful than ever. Thats true. Other people look at corporations indifferent treatment of all personnel except those in the C-suites, their disinclination even to pretend that they provide customer service until someone makes a stink on social media, and their desperation to please shareholders and conclude that corporations have become pitifully weak. Thats also true.

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Elizabeth Warren Wants to Know How Hertz Went From Bankruptcy to Buybacks in Six Months - The New Republic

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