Began by Walter L. Jacobs in 1918, who started a car rental operation in Chicago with a dozen Model T Ford cars. In 1923, Jacobs sold it to John D. Hertz who made it a subsidiary of his Yellow Truck and Coach Manufacturing Company and renamed it "Hertz Drive-Ur-Self System".
He sold a controlling interest in the Yellow Truck and Coach Manufacturing Company (and hence also 'Hertz Drive-Ur-Self') to General Motors in 1925 who then purchased the remaining shares in 1943.
Hertz arranged for The Omnibus Corporation, which he also owned, to purchase the car rental business back from GM in 1953. He sold all The Omnibus Corporation's public transport interests the same year, changed its name to 'The Hertz Corporation' and floated it on the New York Stock Exchange the following year.
[edit]The Hertz Corporation
In 1954, the new corporation bought New York truck leasing company, Metropolitan Distributors.[3]
In 1967, The Hertz Corporation became a wholly owned subsidiary of RCA but was operated as a separate entity. In 1985, Hertz joined UAL Corporation. On December 30, 1987, Hertz was sold to 'Park Ridge Corporation', which was then owned by Ford Motor Company and members of Hertz senior management. In 1988, Volvo North America Corporation invested in Park Ridge Corporation.[3]
On June 13, 2005, Ford issued a notice that Hertz would be let loose in an initial public offering. On September 13, 2005 it was announced it was to be sold to a private equity group for $5.6 billion in cash and debt acquisition. The sale was completed on December 22, 2005.
This private equity group took Hertz public on November 16, 2006 and is now available on the New York Stock Exchange under the symbol 'HTZ'.
On January 11, 2010. Hertz announced the acquisition of used car dealer British Car Auctions (BCA) for an undisclosed sum.[4] On April 26, 2010, Hertz announced the acquisition of rival Dollar-Thrifty Automotive Group for a purchase price of $41.00 per share, in a mix of cash and Hertz common stock.[5] Investors in Tulsa, Oklahoma-based Dollar Thrifty rejected the $1.44 billion bid from Hertz on Sept. 30. [6]
Despite the end of its affiliation with Ford, the rental fleet of most Hertz locations still consists of Ford and its brands, such as Mazda, Volvo, Mercury and Lincoln, along with various others (mostly Korean and Japanese).
The Hertz Corporation's Data Center is located in Warr Acres, and its Worldwide Reservations Center is located in The Village; both are cities in Oklahoma County, Oklahoma.
If you've ever said, "Don't worry about it, it's just a rental," guess who hurts: Hertz, a world leader in car rental. On its own and through agents and licensees, Hertz operates some 8,500 rental locations in more than 145 countries worldwide. The US is home to about 2,360 of Hertz's staffed rental sites, of which about one-fifth are at airports. Its fleet includes approximately 444,000 cars from Ford, General Motors, Toyota, and other manufacturers. Car rental accounts for about 85% of its sales. Hertz also rents a variety of heavy equipment through about 320 locations in North America, Europe, and China. Not to be left at the curb, Hertz is investing in electric and hybrid vehicles as well as car sharing.
In another legal battle, a federal judge in New York City upheld a newly enacted city ordinance that prohibited all rental companies from imposing 'resident-based' rates, but at the same time barred the city from putting the law into effect. Specifically, Hertz and others were charging residents of the boroughs of Manhattan, the Bronx, Brooklyn, and Queens higher rates when cars were rented locally. The U.S. Court of Appeals later reversed the U.S. District Court ruling and remanded the case for trial. Later, in 1994, the state of New York sued Hertz and other rental car companies for refusing to rent vehicles to licensed drivers between the ages of 18 and 25. The judgment in this case eventually went against Hertz in 1997, the same year that Hertz agreed to pay somewhere between $4 million and $6 million in refunds to customers who had purchased their unregulated rental car insurance in Texas.
Competition remained fierce among the top five car rental companies in the early 1990s, and many analysts likened the ensuing price wars to those of the airline and hotel industries, whose markets complemented the rental car business. The car rental business was becoming increasingly a commodity market, meaning that there were more rental cars available than customers. In addition to price cutting, Hertz offered various promotional strategies to expand its product base. One strategy, for example, allowed customers to earn mileage in the frequent flyer programs of such airlines as American, Northwest, United, and U.S. Air, as well as to gain points in Mariott's Honored Guest program. Another involved removing mileage limits in the United States in 1995 and expanding its 'Rent It Here/Leave it There' program in Europe. In 1994, in the aftermath of the O.J. Simpson murder trial, Hertz abruptly cancelled Simpson's sponsorship, begun in 1975, in favor of its new 'Not Exactly' campaign.
Improvements to the actual Hertz rental fleet were also focused on in the mid- and late 1990s. In 1995, Hertz introduced Rockwell-built vehicle navigation system units, a technology it named NeverLost, to many of its mid- and full-size cars. In 1996, it increased safety features&ndashding anti-lock brakes and airbags in most of its cars--and teamed with Shared Technologies Cellular to offer cell phone rental.
Hertz also began to diversify; in 1991, for example, the company established Hertz Technologies, a wholly owned subsidiary involved in the telecommunications services business. Four years later, it launched Hertz Insurance Replacement Entity (HIRE), later renamed Hertz Local Edition, a subsidiary specializing in providing vehicles to insurance community and auto dealers. In 1996, the company expanded its used-car sales business, adding lots in almost 40 U.S. cities of 50 to 60 cars. The year also marked Hertz's foray onto the Internet, with the introduction of its informational Website located at www.hertz .com. By 1997, the site would become interactive, offering rate quotes and the possibility of checking on availability, and booking, confirming, and canceling reservations on-line.
Adding to the competition among rental car companies, the big three automakers raised their acquisition costs for cars, no longer subsidizing fleet purchases beginning in 1992. At the time, Hertz was purchasing approximately 70 percent of its domestic fleet and one-third of its European fleet from Ford. For three successive years, Hertz's holding costs rose about 30 percent per year, for a compounded impact in excess of 100 percent. The higher cost of cars meant that rental companies had to keep their vehicles longer (from three to six or nine months). Despite this hardship on revenue, the environment for rentals in the United States continued to improve steadily, a by-product of an American boom in travel; throughout most of the 1990s, the rental car industry averaged an 11 percent increase per year on rentals.
Eroding profits became a problem for Hertz and its competitors. Squeezed between spiraling car costs and competitive pricing, the industry as a whole showed losses of $150 million in 1995. Car rental companies, including Hertz, responded by raising rates several times beginning in 1993, and by cost-cutting, weeding out unprofitable locations, and limiting excess inventory. Yet Hertz managed to remain profitable throughout the early and mid-1990s. Its revenues for 1994 were $2.1 billion; in 1995, that figure rose to $2.27 billion.
Consolidation Trend in the Mid- to Late 1990s
By the mid- to late 1990s, the $14 billion-a-year car rental industry was undergoing a transition toward consolidation and public ownership. In 1994, Ford bought Commerzbank A.G.'s five percent stake in Hertz, thereby raising its own stake to 54 percent and acquiring control of Hertz. It then purchased the 46 percent of the company owned by Volvo and the company's management. In 1997, with Hertz enjoying 29 percent of the car rental market, Ford floated about one-fifth of its shares.
Although Hertz was eclipsed in 1995 by Enterprise as the rental car company enjoying the largest number of U.S.-based rentals, Hertz held its own through the remainder throughout the 1990s in terms of profit and kept its position as the largest car rental company worldwide. In fact, beginning in 1993, Hertz enjoyed a six-year string of record earnings. In 1999, it recorded revenues of $4.7 billion, an increase of more than 11 percent over the $4.2 billion garnered in 1998. Craig Koch, who became company president in 2000, attributed the 1999 record performance to strong demand, improved car rental pricing, and continuing cost efficiency.
Principal Subsidiaries: Hertz Claim Management Corporation; Hertz Equipment Rental Corporation (HERC); Hertz Local Edition; Hertz Technologies, Inc.
Principal Competitors: Alamo Rent A Car, Inc; Avis Rent A Car, Inc.; Budget Rent-A-Car Corporation; Enterprise Rent A Car, Inc.; National Car Rental System, Inc; Dollar Thrifty Automotive Group, Inc.
Financial Highlights
Fiscal Year End: December
Revenue (2010): 7562.50 M
Revenue Growth (1 yr): 6.50%
Employees (2010): 22,900
Employee Growth (1 yr): (-0.70%)
Statistics:
Public Company
Incorporated: 1967
Employees: 26,700
Sales: $4.71 billion (1999)
Stock Exchanges: New York
Ticker Symbol: HRZ
NAIC: 532111 Automobile Rental; 53212 Truck Rental
Key Dates:
1918: Walter L. Jacobs starts a car rental business in Chicago with a fleet of 12 cars.
1923: Jacobs sells the company to John Hertz, head of Yellow Cab and Yellow Truck.
1927: Jacobs sells his Hertz DriveUrSelf System, along with Yellow Truck, to General Motors.
1950: Hertz begins European operations.
1954: Omnibus Corporation acquires Hertz and takes it public on the New York Stock Exchange.
1960: Walter L. Jacobs retires.
1967: Hertz becomes a subsidiary of Radio Corporation of America (RCA).
1985: UAL, holding company of United Airlines, acquires Hertz.
1987: Hertz is sold to Park Ridge Corporation, an investor group affiliated with Ford Motor Co.
1988: Volvo North America Corporation becomes an investor in Park Ridge.
1991: Hertz Technologies subsidiary is established.
1994: Ford buys out the Park Ridge investors, and Hertz becomes a subsidiary of Ford.
1997: Hertz is spun off as a public company.
Address:
225 Brae Boulevard
Park Ridge, New Jersey 07656
U.S.A.
He sold a controlling interest in the Yellow Truck and Coach Manufacturing Company (and hence also 'Hertz Drive-Ur-Self') to General Motors in 1925 who then purchased the remaining shares in 1943.
Hertz arranged for The Omnibus Corporation, which he also owned, to purchase the car rental business back from GM in 1953. He sold all The Omnibus Corporation's public transport interests the same year, changed its name to 'The Hertz Corporation' and floated it on the New York Stock Exchange the following year.
[edit]The Hertz Corporation
In 1954, the new corporation bought New York truck leasing company, Metropolitan Distributors.[3]
In 1967, The Hertz Corporation became a wholly owned subsidiary of RCA but was operated as a separate entity. In 1985, Hertz joined UAL Corporation. On December 30, 1987, Hertz was sold to 'Park Ridge Corporation', which was then owned by Ford Motor Company and members of Hertz senior management. In 1988, Volvo North America Corporation invested in Park Ridge Corporation.[3]
On June 13, 2005, Ford issued a notice that Hertz would be let loose in an initial public offering. On September 13, 2005 it was announced it was to be sold to a private equity group for $5.6 billion in cash and debt acquisition. The sale was completed on December 22, 2005.
This private equity group took Hertz public on November 16, 2006 and is now available on the New York Stock Exchange under the symbol 'HTZ'.
On January 11, 2010. Hertz announced the acquisition of used car dealer British Car Auctions (BCA) for an undisclosed sum.[4] On April 26, 2010, Hertz announced the acquisition of rival Dollar-Thrifty Automotive Group for a purchase price of $41.00 per share, in a mix of cash and Hertz common stock.[5] Investors in Tulsa, Oklahoma-based Dollar Thrifty rejected the $1.44 billion bid from Hertz on Sept. 30. [6]
Despite the end of its affiliation with Ford, the rental fleet of most Hertz locations still consists of Ford and its brands, such as Mazda, Volvo, Mercury and Lincoln, along with various others (mostly Korean and Japanese).
The Hertz Corporation's Data Center is located in Warr Acres, and its Worldwide Reservations Center is located in The Village; both are cities in Oklahoma County, Oklahoma.
If you've ever said, "Don't worry about it, it's just a rental," guess who hurts: Hertz, a world leader in car rental. On its own and through agents and licensees, Hertz operates some 8,500 rental locations in more than 145 countries worldwide. The US is home to about 2,360 of Hertz's staffed rental sites, of which about one-fifth are at airports. Its fleet includes approximately 444,000 cars from Ford, General Motors, Toyota, and other manufacturers. Car rental accounts for about 85% of its sales. Hertz also rents a variety of heavy equipment through about 320 locations in North America, Europe, and China. Not to be left at the curb, Hertz is investing in electric and hybrid vehicles as well as car sharing.
In another legal battle, a federal judge in New York City upheld a newly enacted city ordinance that prohibited all rental companies from imposing 'resident-based' rates, but at the same time barred the city from putting the law into effect. Specifically, Hertz and others were charging residents of the boroughs of Manhattan, the Bronx, Brooklyn, and Queens higher rates when cars were rented locally. The U.S. Court of Appeals later reversed the U.S. District Court ruling and remanded the case for trial. Later, in 1994, the state of New York sued Hertz and other rental car companies for refusing to rent vehicles to licensed drivers between the ages of 18 and 25. The judgment in this case eventually went against Hertz in 1997, the same year that Hertz agreed to pay somewhere between $4 million and $6 million in refunds to customers who had purchased their unregulated rental car insurance in Texas.
Competition remained fierce among the top five car rental companies in the early 1990s, and many analysts likened the ensuing price wars to those of the airline and hotel industries, whose markets complemented the rental car business. The car rental business was becoming increasingly a commodity market, meaning that there were more rental cars available than customers. In addition to price cutting, Hertz offered various promotional strategies to expand its product base. One strategy, for example, allowed customers to earn mileage in the frequent flyer programs of such airlines as American, Northwest, United, and U.S. Air, as well as to gain points in Mariott's Honored Guest program. Another involved removing mileage limits in the United States in 1995 and expanding its 'Rent It Here/Leave it There' program in Europe. In 1994, in the aftermath of the O.J. Simpson murder trial, Hertz abruptly cancelled Simpson's sponsorship, begun in 1975, in favor of its new 'Not Exactly' campaign.
Improvements to the actual Hertz rental fleet were also focused on in the mid- and late 1990s. In 1995, Hertz introduced Rockwell-built vehicle navigation system units, a technology it named NeverLost, to many of its mid- and full-size cars. In 1996, it increased safety features&ndashding anti-lock brakes and airbags in most of its cars--and teamed with Shared Technologies Cellular to offer cell phone rental.
Hertz also began to diversify; in 1991, for example, the company established Hertz Technologies, a wholly owned subsidiary involved in the telecommunications services business. Four years later, it launched Hertz Insurance Replacement Entity (HIRE), later renamed Hertz Local Edition, a subsidiary specializing in providing vehicles to insurance community and auto dealers. In 1996, the company expanded its used-car sales business, adding lots in almost 40 U.S. cities of 50 to 60 cars. The year also marked Hertz's foray onto the Internet, with the introduction of its informational Website located at www.hertz .com. By 1997, the site would become interactive, offering rate quotes and the possibility of checking on availability, and booking, confirming, and canceling reservations on-line.
Adding to the competition among rental car companies, the big three automakers raised their acquisition costs for cars, no longer subsidizing fleet purchases beginning in 1992. At the time, Hertz was purchasing approximately 70 percent of its domestic fleet and one-third of its European fleet from Ford. For three successive years, Hertz's holding costs rose about 30 percent per year, for a compounded impact in excess of 100 percent. The higher cost of cars meant that rental companies had to keep their vehicles longer (from three to six or nine months). Despite this hardship on revenue, the environment for rentals in the United States continued to improve steadily, a by-product of an American boom in travel; throughout most of the 1990s, the rental car industry averaged an 11 percent increase per year on rentals.
Eroding profits became a problem for Hertz and its competitors. Squeezed between spiraling car costs and competitive pricing, the industry as a whole showed losses of $150 million in 1995. Car rental companies, including Hertz, responded by raising rates several times beginning in 1993, and by cost-cutting, weeding out unprofitable locations, and limiting excess inventory. Yet Hertz managed to remain profitable throughout the early and mid-1990s. Its revenues for 1994 were $2.1 billion; in 1995, that figure rose to $2.27 billion.
Consolidation Trend in the Mid- to Late 1990s
By the mid- to late 1990s, the $14 billion-a-year car rental industry was undergoing a transition toward consolidation and public ownership. In 1994, Ford bought Commerzbank A.G.'s five percent stake in Hertz, thereby raising its own stake to 54 percent and acquiring control of Hertz. It then purchased the 46 percent of the company owned by Volvo and the company's management. In 1997, with Hertz enjoying 29 percent of the car rental market, Ford floated about one-fifth of its shares.
Although Hertz was eclipsed in 1995 by Enterprise as the rental car company enjoying the largest number of U.S.-based rentals, Hertz held its own through the remainder throughout the 1990s in terms of profit and kept its position as the largest car rental company worldwide. In fact, beginning in 1993, Hertz enjoyed a six-year string of record earnings. In 1999, it recorded revenues of $4.7 billion, an increase of more than 11 percent over the $4.2 billion garnered in 1998. Craig Koch, who became company president in 2000, attributed the 1999 record performance to strong demand, improved car rental pricing, and continuing cost efficiency.
Principal Subsidiaries: Hertz Claim Management Corporation; Hertz Equipment Rental Corporation (HERC); Hertz Local Edition; Hertz Technologies, Inc.
Principal Competitors: Alamo Rent A Car, Inc; Avis Rent A Car, Inc.; Budget Rent-A-Car Corporation; Enterprise Rent A Car, Inc.; National Car Rental System, Inc; Dollar Thrifty Automotive Group, Inc.
Financial Highlights
Fiscal Year End: December
Revenue (2010): 7562.50 M
Revenue Growth (1 yr): 6.50%
Employees (2010): 22,900
Employee Growth (1 yr): (-0.70%)
Statistics:
Public Company
Incorporated: 1967
Employees: 26,700
Sales: $4.71 billion (1999)
Stock Exchanges: New York
Ticker Symbol: HRZ
NAIC: 532111 Automobile Rental; 53212 Truck Rental
Key Dates:
1918: Walter L. Jacobs starts a car rental business in Chicago with a fleet of 12 cars.
1923: Jacobs sells the company to John Hertz, head of Yellow Cab and Yellow Truck.
1927: Jacobs sells his Hertz DriveUrSelf System, along with Yellow Truck, to General Motors.
1950: Hertz begins European operations.
1954: Omnibus Corporation acquires Hertz and takes it public on the New York Stock Exchange.
1960: Walter L. Jacobs retires.
1967: Hertz becomes a subsidiary of Radio Corporation of America (RCA).
1985: UAL, holding company of United Airlines, acquires Hertz.
1987: Hertz is sold to Park Ridge Corporation, an investor group affiliated with Ford Motor Co.
1988: Volvo North America Corporation becomes an investor in Park Ridge.
1991: Hertz Technologies subsidiary is established.
1994: Ford buys out the Park Ridge investors, and Hertz becomes a subsidiary of Ford.
1997: Hertz is spun off as a public company.
Address:
225 Brae Boulevard
Park Ridge, New Jersey 07656
U.S.A.
Last edited: