A century-old car rental company Hertz Global Holdings filed for bankruptcy protection on May 22nd, following the irreversible damages caused by the COVID-19 pandemic.
Hertz operates in Europe, Australia, and New Zeland, but it’s the U.S. branch that seeks Chapter 11 protection in a Delaware bankruptcy court, reports Reuters. By the end of 2019 the company was already $19 billion in debt, since the competitors such as Uber begun to steadily gain more demand.
The company’s revenue, which used to vastly depend on car rentals at airports, suffered the most after the decline in vehicle demand during the U.S. lockdown. This is when the size of Hertz’s lease obligations increased. In May, Herz has already laid off 10,000 staff members and replaced CEO Kathryn Marinello with executive Paul Stone.
Herz had previously said that it could be saved from bankruptcy with relief from creditors or financial aid from the U.S. government, which never happened. It states that it currently possesses $1 billion in cash.
The history of Hertz began in 1918 with a founder Walter Jacobs who rented out a dozen Ford Motor Co Model Ts, becoming one of the first American entrepreneurs to start a business like that.