Collapsing in debts, Hertz eventually declared bankruptcy. Already weakened, the second American car rental company has seen its activity plummet with the coronavirus crisis, notably due to the closure of airports. In April, Hertz previously announced the loss of 10,000 jobs in the United States.
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The company therefore placed itself under the protection of section 11 of the United States bankruptcy law. This system must enable a company that has contracted debts with its creditors to undertake restructuring actions, according to a plan defined in agreement with them, and approved by a court. This procedure will only affect Hertz's activities in the United States and Canada.
The other subsidiaries, and in particular the French subsidiary, should be spared, insisted the general manager of Hertz, Paul E. Stone, in a press release: the bankruptcy procedure excludes operations in Australia, Europe and New Zealand, as well than the business franchises.
Sector in crisis
However, the French subsidiary of Hertz is preparing for a reorganization of its activity, which fell by 90% during confinement. In an interview with Flottes Automobiles, its director Arnaud Perard spoke of " a profound review of the fleet plan ", while acknowledging " that it is impossible to control this future ". The activity of Hertz, which has 30,000 vehicles in France, depends on the resumption of professional and tourist trips.
In the meantime, the firm must assume significant fixed costs due to its location in airports and large stations.
The entire vehicle rental sector is suffering from these conditions. The French competitor of Hertz, Europcar, obtained 220 million euros of loan guaranteed by the State, which does not prevent it from initiating a drastic savings plan: Europcar Mobility Group announced 850 million cost reductions in 2020.