The Hertz Corporation
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The Hertz Corporation

The Hertz Corporation
Subsidiary
Traded asNYSEHTZ
Russell 2000 Component
ISINUS42805T1051 Edit this on Wikidata
IndustryCar rental and leasing
FoundedChicago, Illinois, USA (1918)
FounderWalter L. Jacobs[1]
HeadquartersEstero, Florida, USA
Number of locations
10,200 corporate and franchise between Hertz, Dollar, and Thrifty (as of 2018)[2]
Key people
Kathryn V. Marinello [3](President and CEO)
RevenueIncrease US$9.504 billion (2018)[4]
Decrease US$167 million (2017)[4]
Decrease US$(225) million (2018)[4]
Increase US$21.382 billion (2018)[4]
Decrease US$1.120 billion (2018)[4]
OwnerHertz Global Holdings
Number of employees
~38,000 (December 2018)[4]
Websitewww.hertz.com

The Hertz Corporation, a subsidiary of Hertz Global Holdings Inc., is an American car rental company based in Estero, Florida that operates 10,200 corporate and franchisee locations internationally. As the second-largest US car rental company by sales, locations, and fleet size, Hertz operates in 150 countries, including North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand.[2] The Hertz Corporation owns Dollar and Thrifty Automotive Group--which separates into Thrifty Car Rental and Dollar Rent A Car.

Hertz Global Holdings, the parent company of The Hertz Corporation, was ranked 335th in Forbes' 2018 Fortune 500 list.[5] As of 2018, the company has revenues of US$9.5 billion, assets of US$21.3 billion, and 38,000 employees.[6]

The company's early years

The Hertz Corporation, originally known as Rent-a-Car Inc., was founded by Chicago, Illinois native Walter L. Jacobs in 1918.[1] This small car rental operation began with a dozen Model T Ford cars.[7][8] Within five years, Jacob's fleet expanded to 600 vehicles--generating annual revenues of approximately US$1 million.[8]John D. Hertz, owner of Yellow Truck and Coach Manufacturing Company, developed an interest in the brand, leading to him purchasing the company in 1923.[9] It was then renamed to Hertz Drive-Ur-Self System.[8] Jacobs continued to serve as president and chief operating officer of Hertz Drive-Ur-Self System until 1961.[1]

After three years of ownership, John Hertz sold the rental car brand to General Motors Corporation in 1926. GM purchased the rest of Yellow Truck and Coach Manufacturing Company in 1943.[8][10] Under the ownership of General Motors, the company released the first rental car charge card in 1926, opened its first rental car location at Chicago's Midway Airport in 1932, and introduced the first one-way rental plan in 1933.[8][11] Hertz Drive-Ur-Self System expanded services to Canada in 1938 and Europe (France) in 1950.[8][12]

Development of the corporation

Street view of a Hertz location in Denver, Colorado in 1959

John Hertz repurchased the brand from General Motors in 1953 through his other company, The Omnibus Corporation,[12] which he renamed to The Hertz Corporation. In 1954, its stock began trading on the New York Stock Exchange[12], and it purchased a New York-based truck leasing company, Metropolitan Distributors, including a fleet of 4,000 trucks. This acquisition increased The Hertz Corporation's fleet to 15,500 trucks and 12,900 passenger cars.[8]

The company expanded to South America in 1961.[8] In 1967, The Hertz Corporation became a subsidiary of Radio Corporation of America.[13] In 1985, the car rental company was sold to UAL Corporation, later known as Allegis Corporation, for a cash deal of US$587.5 million.[14] This acquisition expanded Hertz's vehicle renting and leasing, with nearly 400,000 cars and trucks in 120 countries across the globe.[15]

In the summer of 1987, Allegis Corporation chairman and president Frank A. Olson announced the company would be selling Hertz due to internal changes.[16][17] Park Ridge Corporation, which was owned and operated under Ford Motor Company, purchased Hertz in October 1987 for US$1.3 billion,[17] and Hertz relocated its headquarters from Midtown Manhattan to Park Ridge, New Jersey in 1988.[18]

In 2002, Hertz became the first international car rental company to open in China.[19] (In 2013, Hertz began partnering with China's largest car rental company, China Auto Rental. In 2016, it reduced its ownership stake but announced a continuing commercial relationship through 2023.[20])

By the second quarter of 2005, Hertz produced about ten percent of Ford's overall pre-tax profit.[21] However, after 18 years of ownership, the Ford Motor Company announced it would be selling the Hertz brand with the intent to focus more on building Ford cars and trucks.[22] Private equities Clayton, Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity agreed to purchase all shares of common stock in Hertz for an estimated US$15 billion, including debt, and the business itself for US$5.6 billion in 2005.[22]

The Clayton, Dubilier & Rice consortium took Hertz Global Holdings public again on the New York Stock Exchange in November 2006, and Hertz began to expand through Europe.

Hertz launched subbrand "Simply Wheelz" in September 2007 for economy-minded and leisure-market audiences. By 2008, the service expanded to airports in California, Florida, and the McCarran International Airport in Las Vegas, Nevada.[23] Once an online reservation was made, customers were able to choose one of six types of vehicles at self-service rental kiosks.[23] Simply Wheelz was rebranded as Advantage Rent-a-Car in the fall of 2009.[24]

In late December 2009, Hertz announced the acquisition of used cars dealer British Car Auctions (BCA) from London-based equity firm, Montagu Private Equity, for an estimated £390 million.[25][26]

Dollar Thrifty and Advantage transactions

In November 2012, Hertz Global Holdings Chairman and CEO Mark P. Frissora announced the company's purchase of Dollar Thrifty Automotive Group, a U.S.-based car rental brand with headquarters in Tulsa, Oklahoma, for US$2.3 billion.[27][28] The business transaction included Hertz paying $87.50 per share of the Dollar Thrifty stock.[24] The deal was finalized on November 19, 2012 and resulted in a combined 10,400 locations in approximately 150 countries.[18] Before the merge, Dollar Thrifty was the fourth-largest car rental company.[27]

In December 2012, Hertz announced it would sell its Advantage Rent a Car unit to Franchise Services of North America and Macquarie Capital after the acquisition of Dollar Thrifty Automotive Group was finalized.[24]

Modern corporate changes

In May 2013, Frissora and Florida Governor Rick Scott announced Hertz Global Holdings would relocate their worldwide headquarters from Park Ridge, New Jersey to Estero, Florida.[18] Relocation to Southwest Florida was influenced by the state's travel and tourism industry, proximity to Orlando and Miami, to condense corporate offices, and to increase efficiency of Hertz Global brands.[18] A temporary office building in Naples, Florida housed 640 employees until construction of a new facility was completed in 2015.[29][30]

John P. Tague replaced Frissora as Chief Executive Officer and President of The Hertz Corporation in November 2014.[31]

Kathryn V. Marinello, former CEO of Stream Global Services, was appointed President and Chief Executive Officer of The Hertz Corporation on January 2, 2017, following Tague's retirement.[3][32][33]

Activist investor Carl Icahn holds approximately one-third stake in the Hertz brands and controls three board seats.[34]

New technologies

In 2000, Hertz introduced SiriusXM Satellite Radio to its rental fleet.[35]

In 2007, the company began testing hourly car rentals at three locations in New York City.[36] It launched a global carsharing service under the name Connect by Hertz in December 2008,[37] serving customers who paid a fee to rent cars by the hour in Park Ridge, New Jersey, New York, Orlando, Florida, London, England, Paris, France, and Sydney, Australia.[37][38] Later branded as Hertz on Demand and Hertz 24/7, operation in the United States ceased in September 2015.[38]

In 2009, it began testing a photo system to record damage to its rental cars.[39]

It introduced ExpressRent kiosks at various rental locations in November 2011. This was the first introduction of large-scale car rental kiosks in the United States that used a live agent through video chat[40]

Hertz car rental locations and operation

Hertz has 9,700 corporate and franchise rental locations in 150 countries throughout North America, Europe, Latin America, Africa, Asia, Australia, The Caribbean, the Middle East, and New Zealand.[2] Hertz rental car locations also exist at major airports including Hartsfield-Jackson Atlanta, O'Hare Airport, Newark Liberty International, Beijing Capital Airport, and Tokyo Haneda Airport.

History of Hertz franchising

Wilford Gwilliam of Overland West purchased a portion of Hertz franchise in 1941.[41] Overland West is the largest Hertz franchise licensee in North America, operating 27 car rental and four car sales locations in eight states.[42] Gwilliam sold it to Devere J. Sparrow, who led the organization until selling it to his son-in-law, Jerry H. Petersen, in 1976.[43] As the current owner, president and CEO, Petersen oversees franchises and employees.[44]

Rental fleet

The Hertz rental car fleet has consisted of a variety of vehicle manufacturers, ranging from BYD, Mercedes, Infiniti, Cadillac, Mazda, Volvo, Toyota, Jeep, and Lincoln, along with various others. By December 2012, the company had over 490,000 cars in the United States.[45] As of 2014, 78 percent of Hertz's fleet includes vehicles that reach 28 miles per gallon or more on the highway.[46]

Specialty cars

In 1966, Hertz engaged racing and automotive designer Carroll Shelby to develop an exclusive version of his modified Ford Mustang.[47] The objective was to attract more customers to Hertz and the Hertz fleet would tempt car renters to buy a Mustang or a Shelby-Mustang.[48] One thousand GT350H Mustangs were built as rental cars, although urban legend also maintains that many were missing original engines when returned.[49] The "Rent-a-Racer" program was available in selected locations during the late 1960s for a limited time. The fleet has included Corvettes, Jaguar XK-Es, and AMC AMXs.[47] Hertz reintroduced the program in 2016.[50]

The Green Collection

Hertz launched its Green Collection of rental cars in September 2006. This fleet of environmentally friendly vehicles has included the Toyota Prius, Ford Fusion, Buick LaCrosse, Toyota Camry, and Hyundai Sonata.[39][51] All vehicles within this group feature Environmental Protection Agency (EPA) highway fuel efficiency ratings of 28 miles per gallon-highway.[46][39] The Green Collection was introduced in Singapore in 2014.[52]

Heavy equipment rentals

Hertz opened a heavy equipment rental division in 1965, the Hertz Equipment Rental Corporation, with its first location in Houston, Texas and headquarters in Park Ridge, New Jersey.[53] HERC became an independently publicly traded company called Herc Rentals Inc. on July 1, 2016.[54]

Advertising

Let Hertz Put You in the Driver's Seat

In 1959, the advertising firm of Norman, Craig & Kummel (NCK) was selected as the new advertising agency for Hertz. NCK developed the slogan "Hertz puts you in the driver's seat", which was first used commercially in September 1959. NCK changed the wording to "Let Hertz put you in the driver's seat" by October 1959. Popular a cappella quartet The Hi-Lo's sang the Hertz song for the commercials. Hertz used the line in the early 1960s in print, signs, and television. The series is listed as number 65 in the top 100 advertising campaigns of the 20th century by Advertising Age magazine.[55]

O.J. Simpson

Former football player O. J. Simpson appeared as a spokesperson in Hertz ads. Simpson's place in advertising is said to have sparked African-American athletes being featured in film and television.[56] One spot from the mid-1970s showed Simpson, as a football player he was, running through an airport terminal, dressed in business attire, leaping over rows seats to get his Hertz rental car. A woman yelled, "Go, O. J., Go!" The tagline of the ad, as spoken by Simpson, was "Hertz, the superstar in rent-a-car". Through the 1980s and 1990s, Simpson appeared with golf legend Arnold Palmer and actress Jamie Lee Curtis.

References

  1. ^ a b c "Walter L. Jacobs, 88; Rent-a-Car Pioneer". Los Angeles Times. 1985. Retrieved 2017.
  2. ^ a b c "2016 U.S. Car Rental Market: Fleet, Locations, and Revenue". Hertz. 2019. Retrieved 2019.
  3. ^ a b "Hertz CEO John Tague to step down in January". FOX Business.
  4. ^ a b c d e f "Hertz Global Holdings, Inc. 10-K" (PDF). Hertz Global Holdings, Inc. February 2018.
  5. ^ "Hertz Global Holdings". Fortune. Retrieved 2018.
  6. ^ "Hertz Global Holdings". Fortune. Retrieved 2018.
  7. ^ "Walter L. Jacobs, 88, Chicago native who in 1918 founded..." Chicago Tribune. 1985. Retrieved 2017.
  8. ^ a b c d e f g h "The Hertz Corporation". Harvard Business School. 1961. Retrieved 2017.
  9. ^ Fowler, Glenn (1985). "W.L. JACOBS DIES; EX-HEAD OF HERTZ". The New York Times. Retrieved 2017.
  10. ^ "Hertz Corp". Advertising Age. 2013. Retrieved 2017.
  11. ^ "Hertz rental car founder born". A&E Television Networks. 2017. Retrieved 2017.
  12. ^ a b c McDonough, John (1997). The Advertising Age Encyclopedia of Advertising (42, No. 5 ed.). Routledge.
  13. ^ "R.C.A., Hertz Agree on Merger". Chicago Tribune. 1966. Retrieved 2017.
  14. ^ Ritcher, Paul (1985). "General Electric Will Buy RCA for $6.28 Billion". LA Times. Retrieved 2017.
  15. ^ Cole, Robert J. (1985). "UNITED AIRLINES SET TO BUY HERTZ FROM RCA IN $587 MILLION DEAL". The New York Times. Retrieved 2017.
  16. ^ Day, Kathleen (1985). "RCA Agrees to Sell Its Hertz Unit to UAL Inc. for $587 Million Cash". The New York Times. Retrieved 2017.
  17. ^ a b Dallos, Robert E. (1987). "Hertz Team, Ford Agree to Buy Car Rental Firm From Allegis in $1.3-Billion Deal". Los Angeles Times. Retrieved 2017.
  18. ^ a b c d "No mystery anymore: Hertz moving HQ to Estero". NBC2. 2013. Retrieved 2017.
  19. ^ "Hertz Car Rental - Company History". Bargain Wheels. 2017. Retrieved 2017.
  20. ^ "Hertz Reduces Shares of China Auto Rental". Auto Rental News. 2016. Retrieved 2017.
  21. ^ Sorkin, Andrew (2005). "Private Investors to Buy Hertz for $15 Billion". The New York Times. Retrieved 2017.
  22. ^ a b "Ford sells Hertz for $5.6B". USA Today. 2005. Retrieved 2017.
  23. ^ a b "Hertz Expands Simply Wheelz to California, Florida and Nevada". Auto Rental News. 2008. Retrieved 2017.
  24. ^ a b c De La Merced, Michael J.; Lattam, Peter (August 26, 2012). "After Long Pursuit, Hertz to Buy Dollar Thrifty for $2.3 Billion". The New York Times. Retrieved 2019.
  25. ^ "Hertz owner buys British Car Auctions". The Scotsman. 2009. Retrieved 2017.
  26. ^ "Hertz acquires used car dealer". News Statesman. 2010. Retrieved 2017.
  27. ^ a b Evatt, Robert (2013). "FTC clears final hurdle for Hertz and Dollar Thrifty merger". Tulsa World. Retrieved 2017.
  28. ^ Terlep, Sharon; Dezember, Ryan (2012). "Hertz Wins Bid to Buy Dollar Thrifty". Wall Street Journal. Retrieved 2017.
  29. ^ "A look into construction at Hertz's new headquarters". NBC2. 2015. Retrieved 2017.
  30. ^ "Form 8-K for Hertz Global Holdings, Inc. The Hertz Corporation". U.S. Securities and Exchange Commission. 2014. Retrieved 2017.
  31. ^ "Hertz Global Holdings Inc". Bloomberg. 2017. Retrieved 2017.
  32. ^ "Carl Icahn Is 'Excited' About New Hertz CEO Kathryn Marinello". Fortune. 2016. Retrieved 2017.
  33. ^ "Hertz Global Holdings". Fortune. 2017. Retrieved 2017.
  34. ^ "4 companies trying to turn things around". US News. 2017. Retrieved 2017.
  35. ^ "Hertz Neverlost Enters Smartphone App Market With First Mobile Application" (PDF) (Press release). Hertz. 2010. Retrieved 2017.
  36. ^ "More companies rent cars by the hour". USA Today. 2017. Retrieved 2017.
  37. ^ a b "Hertz Will Try to Connect With the Carless". The New York Times. 2008. Retrieved 2017.
  38. ^ a b "Hertz to cease car-sharing services in U.S." Travel Weekly. 2015. Retrieved 2017.
  39. ^ a b c Batallas, Tanya (August 19, 2009). "Hertz testing photo system to record damages". NJ.com. Retrieved 2019.
  40. ^ Collet, Stacy (2012). "Hertz Improves Customer Experience With Friendlier Kiosks". CIO. Retrieved 2017.
  41. ^ "Overland West, Inc". Better Business Bureau. 2017. Retrieved 2017.
  42. ^ "About Us". Overland West. 2015. Retrieved 2017.
  43. ^ "Arizona Daily Sun from Flagstaff, Arizona". Arizona Daily Sun. 1977. Retrieved 2017.
  44. ^ "Lots of hard work pays off for owner of Hertz franchises". Deseret News Business. 2001. Retrieved 2017.
  45. ^ "Form 10-K for Hertz Global Holdings, Inc". US Securities and Exchange Commission. 2014. Retrieved 2017.
  46. ^ a b "Hertz Rental-Car Fleet Gets Greener, With Higher Average Fuel Economy". Green Car Reports. 2014. Retrieved 2017.
  47. ^ a b "Rent-a-Racer: Hertz and the Muscle Car Era". Fossil Cars. March 17, 2015. Retrieved 2018.
  48. ^ Gunnell, John (2005). American Cars of the 1960s: A Decade of Diversity. Krause Publications. ISBN 9780896891319. Retrieved 2018.
  49. ^ Stone, Matt (2014). James Garner's Motoring Life: Grand Prix the movie, Baja, The Rockford Files, and More. CarTech. ISBN 9781613251362. Retrieved 2018. Urban legend also maintains that more than a few were returned to the rental lot with the fresh 289 Hi-Po V-8 having been replaced by a tired, garden-variety, low- performance Mustang or Falcon engine after a weekend engine swap. Few Hertz renters will confirm or deny.
  50. ^ Woodyard, Chris (May 20, 2016). "Hertz brings back Shelby's Ford Mustang GT-H 'Rent A Racer'". USA Today. Retrieved 2018.
  51. ^ Grant, John (1997). The Green Marketing Manifesto. John Wiley & Sons.
  52. ^ "Hertz introduces 'Green Traveler Collection' in Singapore". Car Mart. 2014. Retrieved 2017.
  53. ^ "Company Overview of Hertz Rentals Inc". Bloomberg. 2017. Retrieved 2017.
  54. ^ "Hertz to separate into 2 publicly traded companies on July 1". Marketwatch. 2016. Retrieved 2017.
  55. ^ "Ad Age Advertising Century: Top 100 Campaigns". AdvertisingAge. Crain Communications. Retrieved 2012.
  56. ^ Boyd, Todd (2008). African Americans and Popular Culture: Theater, film, and television. pp. 86-87. ISBN 9780313064081. Retrieved 2011.

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