Hertz files for bankruptcy

[Mook]

Hertz files for bankruptcy as the coronavirus pandemic crushes the car-rental industry

The car-rental giant became one of the first major corporate casualties of the economic fallout from COVID-19 after entering Chapter 11 proceedings.

www.businessinsider.com

Hertz has around $19 billion in debt, including $4.3 billion in corporate bonds and loans as well as $14.4 billion of debt backed by their vehicles, according to The Journal.

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[DEEZUZ]

How does this even happen. I don't understand business at all.. How can big companies be so in debt...?


The answer is probably obvious but I just don't understand

 

[Mook]

well currently, no one is traveling and they have something like 700,000 cars just sitting. that probably doesnt help.

 

[Flyn]

At least the CEO who just resigned is staying on as a consultant for up to a year. Gives her time to land on her feet. Maybe she can find some other company to leverage into bankruptcy?

 

[nytebyte]

I figured people would be avoiding planes right now and WANT to drive if possible.
The Enterprise car rental near me is always out of cars, although I haven't checked since this pandemic started.

 

[GTPpower]

It is baffling to me that this company could be in debt. They make a dollar for every dollar they spend on a car.

 

[SpeedSpeak2me]

Too much negative cash flow from the cars just sitting and not being rented. They have a lot of leases that need to be paid and don’t have the cash reserves to cover it.

 

[Mr_Roboto]

I thought we had a thread on here about how the rental industry was gonna go to shit? Maybe I saw it in an article?

Not especially surprised. Curious to see what happens to the used car industry in return. I can tell you at the start of the pandemic my XC90 V8 was an offer of 800 at the JY and I went today and it was 390. Scrap's at like 85 a ton right now. Could trigger the whole market's collapse tbh.

 

[sickmint79]

unf. hopefully the $40 i just spent on a fake rental to maintain my 16k hertz points wasn't all just in vain and a total loss...

 

[Flyn]

Hertz filed for chapter 11 so they're probably trying to reduce/slow down debt.

 

[Pewter-Camaro]

They Have been struggling for a while with Lyft and Uber taking away a chunk of their business. Now they have a massive fleet of vehicles that have not been making money on for months and can’t make the payments on.

 

[NigelTufnel]

I used to clean cars for Hertz back in the 1980's when I was working my way through college. Sad to see them go bust.

 

[sickmint79]

They Have been struggling for a while with Lyft and Uber taking away a chunk of their business. Now they have a massive fleet of vehicles that have not been making money on for months and can’t make the payments on.

i don't travel much for work anymore, but did need to keep my points alive with a fake rental since i had not made one for a year. i have just used a taxi or uber on all of my most recent trips, although sometimes it is a pain to use a mobile service at some airports cuz they put the pickup location out in some goofy spot.