Stephen Scherr has stepped down as CEO of Hertz in the wake of the company’s biggest quarterly loss since the pandemic. Gil West, the former chief operating officer at Cruise, will step in and take over as CEO of the embattled rental car company.
Scherr joined Hertz in 2022 with no experience in the rental industry, but had nearly 30 years with Goldman Sachs. He followed interim CEO Mark Fields, who spent $2 billion on stock buybacks and made big bets on electric vehicles.
The company signed a deal to purchase 100,000 EVs from Tesla, and Shcerr followed that up by signing a similar agreement with Polestar. According to Bloomberg the deal quickly turned sour for Hertz, as Tesla slashed prices for its EVs to maintain sales momentum, subsequently impacting the resale values of the rental company’s vehicles.
Read: Hertz Selling 20,000 Rental EVs, Will Replace Them With ICE Cars
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By January 2024, Hertz announced its plans to sell off its electric vehicles over lackluster demand, expensive repairs, and costly depreciation. In the fourth-quarter of 2023, the company announced a $245 million loss, its biggest since the pandemic.
“The execution and marketing of EV’s [by Hertz] was a horror show across the board,” Daniel Ives, an analyst with Wedbush Securities who specializes in the EV market, told CNN. “It’s a black eye they couldn’t recover from.”
Scherr will be followed by West, and Hertz hopes that his experience in the automotive industry will help him lead it to success. However, the incoming CEO is one of nine executives dismissed by Cruise, GM’s robotaxi company, after its vehicle dragged a pedestrian several feet down the street, and the company allegedly withheld evidence from regulators. Before working at Cruise, West worked at Delta Air Lines, and is credited with helping to improve its efficiency and performance.
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“Gil’s success in leading over 70,000 people at Delta and orchestrating highly effective operational turnarounds will position him well to lead Hertz,” said Colin Farmer, lead director of the Hertz board of directors. “He will be able to build upon the strategic projects begun during Stephen’s tenure, including improvements to technology, commercial partnerships and the revitalization of our value brands.”
Scherr will stay on with the company in the coming weeks to help ease West’s transition, Hertz noted in a statement.
“I am excited to join Hertz and build on its extraordinary family of brands and global network,” said West. “With a 106-year history, Hertz enjoys incredible brand strength and customer loyalty and I look forward to working with the team to achieve its potential for our customers, team members and shareholders.”
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