A blog about societal, cultural, and civilizational collapse, and how to stave it off or survive it. Named after the legendary character "Crazy Eddie" in Larry Niven and Jerry Pournelle's "The Mote in God's Eye." Expect news and views about culture, politics, economics, technology, and science fiction.
Thursday, August 13, 2020
Company Man asks 'Hertz...What happened?' A tale of the Retail Apocalypse and pandemic
In May of 2020, the rental car company Hertz filed for bankruptcy. This video takes a look at their constantly changing history while trying to find reasons behind their recent troubles.
Viewer Peter Barlow summarized Hertz's issues in his comment.
That’s private equity for you: do leveraged buyout then leverage the acquired company to buy more companies. Take company public, run off with the cash. Asset Strip the acquired company. Declare bankruptcy and walk away. Rinse and repeat. (Also cars are some of the worst assets to leverage against as hey presto they depreciate every single month)
Bingo. As I've written about retail chains, companies that were in trouble before the Retail Apocalypse, or in this case, the COVID-19 pandemic, are the ones that are failing now. Hertz is no exception. One of the causes of trouble is debt from mergers and aquisitions in addition to private equity. That's an argument for corporate reform if I ever saw one.
Post a Comment