In a move to revitalize the struggling rental car giant, Hertz Global Holdings Inc. (Nasdaq: HTZ) CEO Gil West has appointed several former Delta Air Lines executives to key positions within the company. This overhaul comes as part of West’s broader effort to stabilize Hertz since assuming the CEO role on April 1.
West, who previously served as Delta’s Chief Operating Officer, has focused on leveraging his extensive experience in the airline industry to bring new perspectives and expertise to Hertz. Among the notable appointments is Sandeep Dube, who will take on the role of Chief Commercial Officer effective July 22. Dube, who has recently been involved with tech companies such as Microsoft’s Activision Blizzard, also held senior roles at Delta.
Joining Dube in the executive lineup are Henry Kuykendall as Executive Vice President of North America Operations, Greg May as Executive Vice President of Fleet Management, and Mike Moore as Executive Vice President of Technical Operations.
West’s strategy includes selling off Hertz’s fleet of Tesla electric vehicles, a move aimed at curbing the substantial losses incurred due to higher-than-expected repair costs and lower-than-anticipated customer demand. This initiative marks a significant shift from the company’s previous ambitious electrification plan.
“We need to focus on sustainable growth and profitability, and part of that strategy involves making tough decisions about our fleet composition,” said West in a recent interview.
May, in particular, will play a crucial role in overseeing Hertz’s vehicle fleet management. With his background in managing aircraft fleets, May faces the challenge of navigating the complexities of the new and used car markets to optimize the company’s rental car inventory.
In addition to these appointments, West brought on Scott Haralson, former Chief Financial Officer at Spirit Airlines, to serve as Hertz’s CFO. Haralson’s expertise in financial management is expected to provide the company with the fiscal discipline needed during this transitional phase.
Last month, Hertz raised $1 billion in debt to enhance its financial flexibility as it phases out the electric vehicle fleet. The decision to offload the Tesla fleet stems from significant financial setbacks. Tesla’s price cuts last year significantly devalued the used EVs Hertz had acquired in bulk, leading to a $245 million charge in the fourth quarter and contributing to the company’s largest quarterly loss since the pandemic.
West’s predecessor, Stephen Scherr, a former Goldman Sachs executive, initiated the ambitious electric vehicle strategy after joining Hertz in early 2022. The plan included a high-profile order for 100,000 Teslas, which initially boosted Tesla’s market cap over $1 trillion. However, the strategy backfired due to poor demand, high depreciation, and costly repairs, ultimately forcing Hertz to sell off a substantial portion of its EV fleet.
Hertz, under new ownership by Knighthead Capital and Certares Management, is now looking to regain its footing and competitiveness in the rental car market against rivals such as Enterprise and Avis.
Hertz last traded at $3.64 at the NASDAQ.
Information for this story was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
