Put it to death and then live.
Editor’s note: This article comes from the WeChat public account “Fenglunfeng Horse Bull” (ID: fengluntalk) author: wind horse cattle.
On May 22, Hertz, the world ’s largest car rental company, 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 and struggle to survive under the challenge of the Internet sharing economy.
01
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 Mustang is only 56 km / h, and the interception is not difficult. However, several policemen accompanied them with guns and cars, and persuaded the fugitives, “Do n’t do silly things, think about your mother and children.”
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 case was opened. 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 “Century Trial” in the history of American law. The suspect’s name is OJ Simpson.He was originally an African American rugby player. After making an advertisement for Hertz, he officially entered the entertainment industry and became a household name in the United States.
The children shouted “Hurry up! OJ!” during the hunt, 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.
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 expensive handmade products. It was not until 1908 that Ford introduced the assembly line to standardize the production and assembly of auto parts. Consumable daily necessities.
Ten years after the launch of the Ford Model T, the US economy has generally ballooned. As the entire country overhauled highways, the Detroit metropolitan area became the most attractive region. The car culture was rapidly fermenting. The United States became a “country on wheels”, and the car rental industry began to emerge. Hertz is just one of the upper reaches.
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 focused on the fat piece of “airport rental car”. Unlike the urban car hire crowd, there are a large number of business travellers at American airports. They are less sensitive to price, but care about time. They are the typical crowd who would rather “use money for time.”
After seeing this, Hertz found an advertising company and hired OJ Simpson to shoot an advertisement: Simpson wore a three-piece suit and ran out of the airport in a hurry. Looking at the camera, “Hertz, a superstar in the car rental industry.”
Achieve classic advertisements for both Hertz and Simpson
From a modern perspective, this advertisement is very simple. But at the time, XinPusen Sunshine’s smile, extremely fast picture rhythm, Hertz cars arriving on time, and Hertz customer service with a smile service all bring a refreshing enjoyment to people.
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 hot but fierce city car rental, Hertz used advertisements to make a name for himself in the subdivision of car rental at the airport. The phrase “superstar in the car rental industry” came to an end. 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.
02
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 “Rent a Car Co., Ltd.” and renamed it “Hertz.” After only three years of operation, John Hertz cashed out and sold the company to GM. 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 aviation 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.
In order to commemorate the 100th anniversary of the establishment, Hertz launched a 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. On the one hand, it faces tens of millions of customers, and on the other hand, it has to support hundreds of thousands of cars. 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.
03
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 that time, Hertz and competitor Avis wanted to convert Dollar ThriftySwallowed in the belly, the acquisition price continued to rise, and finally Hertz won at a high price. However, according to the assumption of Hertz executives, the purchase price should not exceed 1.2 billion US 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 “touch 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 around the world 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.
In 2016, 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 has not brought 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.
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 be as long as several