The title picture comes from “My Complaint”, this article comes from the WeChat public account: Feng Lunfeng Horse Bull (ID: fengluntalk) < / span> , author: wind horse cow
On May 22, the world ’s largest car rental company Hertz (Hertz) officially filed for bankruptcy. A month ago, Hertz ’s executives publicly complained that Trump would rather give tens of billions of dollars to the aviation industry that ca n’t be heaven, rather than glance at car rental companies that ca n’t survive.
Hertz used to be a beneficiary of turning crises into opportunities. Eight years ago, taking advantage of the overall downturn in the car rental industry, Hertz acquired rival Dollar Thrifty, and became the largest car rental company in the United States and the world. Eight years later, Hertz digested the burden caused by whaling and swallowing his opponent, and was ready to show his strength. However, he encountered a new crown epidemic. Even if he still has a billion dollars in his hands, he has to apply for bankruptcy protection in the face of a large amount of debt due.
Hertz circulates this sentence: “Hertz is a very flexible company.” Compared with the airlines that have attracted the attention of the media and big brothers, Hertz, with 102 years of history and 567,000 vehicles, is always dull. Development is not fashionable enough, but it is such a company that has witnessed how the traditional American auto culture and business have coexisted, and how to self-renovate the difficult process of survival under the challenge of the Internet sharing economy.
One
When you mention Hertz, you have to mention the bizarre pursuit.
On June 17, 1994, in Los Angeles, the United States, a white Mustang car was driving on the highway, and a fugitive suspected of brutalizing and killing his ex-wife and waiter was sitting in the car. The speed of this wild horse is only 56 km / h, and the interception is not difficult. However, several policemen accompanied the gun and drove to the side, and they persuaded the fugitives to say, “Do n’t do stupid things,Think about your mother and child. “
At the same time, several well-known TV stations competed for helicopters to broadcast live, and even interrupted the ongoing NBA Finals report. A total of 95 million people watched this live broadcast, setting the highest record in the history of the United States. .
This slow hunt lasted for two hours. A helicopter even ran out of fuel. After the children on the road recognized the suspect, they shouted: “Go! OJ! Go!” Finally, this white mustang Slowly stopped, the suspect got off at the door of the house and motioned to surrender. Four months later, the murder opened for trial. Under the operation of the “lawyer dream team” employed by the suspect, the jury ruled that the suspect was not guilty and was released in court.
This is the “People v. Simpson Case” known as the “Trial of the Century” in the history of American law. The suspect is OJ Simpson. He was originally an African American rugby player. After shooting an advertisement for Hertz, he officially entered the entertainment industry. Become a household star in the United States.
The children shouted “Hurry up! OJ!” during the chase from this advertisement. When Simpson had an accident, the advertisement had been available for 19 years, but its influence was enduring. If OJ Simpson was not arrested, he would attend the second day of the Hertz meeting as originally planned. At that time, he was still Hertz’s spokesperson.
“Century Trial” scene | gloves are important evidence for Simpson ’s innocence
Hertz can stand out from many car rental companies, and has a lot to do with this OJ Simpson’s advertisement.
In 1918, Hertz ’s predecessor, “Leasing a Car Co., Ltd.” began operations. This is a small private company with only a dozen Ford Model Ts initially.
Ford Model T car is of great significance to the automotive industry. Before its birth, cars were hand-made and expensive products. It was not until 1908 that Ford launched the assembly line and standardized production and assembly of auto parts.Daily necessities that ordinary people can consume.
Ten years after the launch of the Ford Model T, the US economy has generally ballooned. The entire country overhauled highways, the Detroit urban agglomeration became the most attractive region, the car culture was rapidly fermenting, and the United States became a “country on wheels”. With the rise of the car rental industry, Hertz is only one of them.
In the 1970s, the U.S. car rental industry was fiercely competitive. There were endless promotional activities launched by major companies. The urban car rental crowd was mostly price-sensitive and not very loyal to the brand. Car rental companies can only desperately squeeze profit margins, and life is tight. It was at this stall that Hertz stared at the fat piece of “airport rental car”. Unlike the urban car hire crowd, there are a large number of business travelers in American airports. They are less sensitive to price, but care about time. They are the typical people who prefer to “time for money”.
After seeing this, Hertz called an advertising company and hired OJ Simpson to shoot an advertisement: Simpson wore a three-piece suit and hurried out of the airport, just in time to catch the car sent by Hertz, Simpson was satisfied with Looking at the camera, “Hertz, a superstar in the car rental industry.”
Achieve the classic advertisement of both Hertz and Simpson
From a modern perspective, this advertisement is very simple. But at the time, Simpson Sunshine’s smile, extremely fast picture rhythm, Hertz cars arriving on time, and Hertz customer service with a smile service all brought people a refreshing enjoyment.
After the advertisement was broadcast, Hertz ’s popularity rose rapidly, and it became a leader in car rental at the airport. According to the statistics of the survey agency Bates, the number of people who used Hertz as the first choice for airport car rental increased by 20%, and the number of people who remembered the advertising content was as high as 70%. %.
Avoiding the fierce but fierce city car rental, Hertz used advertisements to break out in the segment of airport car rentalMingtang, the phrase “superstar in the car rental industry” is a prophecy. And OJ Simpson may be the most cost-effective investment since Hertz was founded. Until the reputation of the murder case is notorious, Simpson still makes every effort to promote Hertz.
Two
In Hertz ’s 102-year history, frequent hand changes are a catalyst for its growth and an important cause of its deep crisis.
In 1923, John Hertz bought the “Leasing a Car Co., Ltd.” and renamed it “Hertz.” After only three years of operation, John Hertz cashed out and sold the company to General Motors. GM attaches great importance to the car rental industry and assigns many executives to enter Hertz, and new cars often enter the Hertz fleet first.
In 1953, seeing the Hertz company getting better and better, John Hertz came back. He bought the company back and packed it a few times. Hertz went public on the New York Stock Exchange. With the money from the listing financing, Hertz continued to expand, bought a truck company, and bought many new passenger cars, expanding its business to South America, the whole group of multinational companies. Unexpectedly, in 1967, John Hertz sold the Hertz company to American Radio Company and cashed again.
Afterwards, Hertz made an advertisement for OJ Simpson and firmly established itself in the field of airport car rental. The developed regional feeder industry in the United States is very developed, and the profit of airport car rental can be up to three times that of city car rental. Hertz has become a veritable “cash cow”. In order to get more profits, each new owner supports Hertz’s continuous expansion, but ignores the huge debts generated.
According to industry practice, if you want to attract customers, Hertz has to continue to buy new cars. In order to increase its influence, Hertz also frequently develops exclusive joint-name cars with GM, Ford, Chrysler and other manufacturers. It will enter the second-hand car market in a very good state to discount it, and use it as a mortgage in the coming year to continue to buy new cars.
Hertz to commemorate the 100th anniversary of its establishment, the limited edition Corvette
Therefore, after the US automobile industry is saturated, growth has slowed, and even rust belts have appeared, car rental companies are still a vital and important customer for automakers. At least 10% of new cars produced in the United States each year are directly rented Buy it and supplement the fleet.
In this way, the car rental company has become a natural “heavy asset” operating company, facing tens of millions of customers on the one hand and supporting hundreds of thousands of cars on the other, the better the company does The larger the fleet size, the larger the debt scale behind it.
In 2005, Hertz grew into the leading car rental company in the United States, creating 10% of the overall pre-tax profit for Ford ’s major shareholder at the time, and was also the heart of GM, Chrysler and other companies. Even so, Hertz could not escape the fate of being sold.
Ownership changes frequently, on the one hand, Hertz gets more resources and ranks among the forefront of the industry, on the other hand, it also brings huge profit pressure to Hertz. Every time it changes hands, the management will adjust the business goals because of the new owner ’s requirements, so Hertz ’s business scope is rapidly expanding, not only involving cars, but also leasing and selling heavy construction equipment such as trucks and cranes. Brand new business such as vehicle sales, logistics and emergency rescue.
The plate is getting bigger and bigger, the scale of Hertz ’s debt has continued to increase, and the major shareholders who are waiting to collect the money have expected that the crisis has come silently, but there is another wave after another.
Three
In 2009, Uber was founded. Initially Uber also took the traditional route, hiring drivers, wearing regular suits, and providing commercial vehicle services. But in California, where technology companies are crowded, Uber quickly turned to the Internet thinking and began allowing gig drivers to join. They dressed casually, used their own cars, and even took orders only when they were idle or on the way. With its strong background operation capabilities, Uber gradually shifted its development focus to low-cost, high-efficiency online car-hailing. More and more part-time drivers are joining Uber, and the scale advantages that traditional car rental companies are proud of disappear.
To counter the growing online car-hailing platform like Uber, car rental companies have started a new wave of mergers.
In 2012, Hertz invested US $ 2.6 billion to buy Dollar Thrifty, the fourth largest car rental company in the United States. At the time, both Hertz and competitor Avis wanted to swallow Dollar Thrifty into their stomachs, and the acquisition price continued to rise, and eventually Hertz won at a high price. However, according to the assumption of Hertz executives, this purchase price should not exceed 12 One hundred million U.S. dollars.
The result of whaling is obvious. Hertz expanded its debt and became the largest car rental company in the United States and the world. The traditional heavy asset operation model has not changed. Depreciation and replacement of vehicles are still a heavy burden that Hertz has to grapple with every year . In contrast, young ride-hailing platform companies such as Uber and Lyft have exhausted the dividends of the gig economy and low-cost platform companies. After several rounds of financing, the market value has exceeded the century-old stores such as Hertz.
In 2014, Hertz ’s debt was difficult to save himself and was sold again. The hedge star Karl Icahn, known as the “Wolf of Wall Street”, acquired Hertz and became Hertz ’s largest shareholder. At the same time, he also invested in Uber ’s largest competitor. The online car-hailing platform Lyft truly implements the concept of “hedging” to the extreme.
In the following years, Hertz hired Accenture to tailor its IT back-end system. However, Accenture wanted money to be fast and work inefficiently. In the Hertz mobile app, there have been two versions with the same appearance but completely incommunicable. Relying on external forces, the centuries-old store “touching the net” is particularly awkward and slow.
Under the interference of new shareholders such as Karl Icahn, Hertz changed coaches again, and the new CEO drastically cut off businesses that are not related to car rental, such as heavy equipment rental and sales, and also streamlined the company ’s organization as much as possible, but Hertz has spread all over the world.148 There are 560,000 vehicles and 12,000 business locations in various countries, but it is not allowed to “revert from light to heavy” instantly.
It is worth mentioning that Uber and Lyft have created huge survival pressure for Hertz, but these ride-hailing platforms themselves are still in the vortex of continuous financing-burning-loss. Uber is a platform company on Wall Street and Softbank that has high hopes. After going public, it quickly fell below the issue price and has not made normal profits so far.
2016In 1994, Hertz proposed to form a team with Lyft to provide vehicles for those who want to open a car and have no cars, so as to achieve a win-win situation. However, this idea failed to bring much improvement to both parties. The competition between traditional car rental companies and online car-hailing platforms “you enter and retreat” will continue. Hertz has a huge scale and cash flow, but it is constantly being declining. Platform companies have traffic and praise, but they are trapped in the vortex of losing money. It is difficult to get out.
Hertz offline service points are located in various airports in the United States
Since April this year, the epidemic in the United States has deteriorated rapidly. After the implementation of the home order, whether it is Uber, Lyft, or Hertz, it can only survive for a few months without harvest.
Uber and Lyft announced layoffs in the face of large expenditures. Hertz first applied for a deferred payment of debt due in April. After seeking help from the government and major shareholders to no avail, he had to apply for bankruptcy protection. After the crisis blew through the wind and swept away all the occlusions, the “heavy asset” model that Hertz relied on for life finally became a veritable “heavy debt” burden.
Investor Carl Icahn is a shareholder of both Lyft and Hertz. At the end of April, a reporter interviewed him if he would lend a helping hand to Hertz. Although not long ago, Carl Icahn had just overweighted Hertz ’s stock Still firmly said: “No, I will not.” According to media reports, at a historic moment of negative oil prices this year, Karl Icahn grabbed at least one million barrels of crude oil. When Hertz made headlines due to bankruptcy, he The rebound in oil prices directly earned nearly US $ 70 million in cash.
From this point of view, Hertz ’s bankruptcy story is also very interesting. On May 22, Hertz formally submitted bankruptcy documents, applying for Chapter 11 bankruptcy reorganization in the US Bankruptcy Law, rather than Chapter 7 bankruptcy liquidation. According to Chapter 11 of the US Bankruptcy Law, applicant companies can continue to operate under the supervision of the court, formulate restructuring plans and debt repayment plans until the situation improves, and actively withdraw from bankruptcy protection. In this way, the $ 1 billion in cash left by Hertz will not be run by the creditors, but will become