The CEO of Hertz Global Holdings Inc., one of the four largest car rental companies globally, will step down from his position as Chief Executive Officer and Board of Directors member effective on March 31. The company announced the news, which comes after just two years of Mr. Scherr’s leadership, on Friday, March 15. The news comes after Hertz reversed course on betting on electric vehicles.
As background, Hertz announced in January of 2024 that it was doing a near-180 on its car fleet, selling off about 20,000 electric vehicles in what it termed a “strategic decision.” That decision came as a result of problems with the tens of thousands of EVs purchased for its rental fleet, about 60,000 in total, namely higher repair costs and lower consumer rental demand for them.
Explaining the decision, Hertz said, “The company expects this action to better balance supply against expected demand of EVs. This will position the company to eliminate a disproportionate number of lower margin rentals and reduce damage expense associated with EVs.” CEO Scherr, for his part, added, “Collision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle.”
That was a major shift, as just months before it announced the sell-off of much of its EV fleet, Hertz had been praised by the Biden Administration for accelerating EV adoption. Posting about Team Biden’s praise on X, Hertz wrote, “This morning, [Hertz] was recognized by The White House for our efforts to expand access to electric vehicles across the country.” It continued, “Demand for EV rentals is growing and we’re here to help our customers electrify their travels.”
Hertz has also emphasized the shift to EVs on its website, stating, “Throughout our 105-year history, Hertz has moved people and things.” That statement continues, “Now, within a changing mobility landscape, we are building a more diversified fleet for our customers, including electric vehicles. EVs offer our customers a premium driving experience, attractive economics in the form of lower energy prices and the opportunity to reduce carbon emissions.”
In any case, Scherr will be stepping down after that failed initiative and replaced with Gil West, who formerly worked as the COO of Delta Airlines. Gil was also in charge of GM’s Cruise self-driving car unit. Tom Wagner, the vice chair of Hertz’s board of directors, announcing Scherr’s stepping down and replacement with Gil, said, “We are appreciative of Stephen’s contribution over the last two years, including on a number of key strategic initiatives, which Gil will now lead in their continued execution.”
In addition to the EV debacle, Hertz just suffered a massive year-over-year loss, suffering a $348 million loss in the fourth quarter of 2023 compared to a $116 million profit in the same 2022 quarter. Indicating that Hertz needs a major turnaround after Scherr’s lackluster leadership, Colin Farmer, the lead director of Hertz’s Board of Directors, said, “Gil’s success in leading over 70,000 people at Delta and orchestrating highly effective operational turnarounds will position him well to lead Hertz.”
Farmer continued, “He will be able to build upon the strategic projects begun during Stephen’s tenure, including improvements to technology, commercial partnerships and the revitalisation of our value brands. Gil’s prior experience in transportation, travel and mobility will give him important perspective on how to thoughtfully lead Hertz into the future.”
"*" indicates required fields