Hertz Global Holdings Inc. is set to welcome a new chief executive officer as the car rental giant seeks to navigate a challenging period marked by a recalibration of its electric vehicle (EV) strategy. Stephen Scherr, who has helmed the company for just over two years, will step down at the end of March, making way for Gil West, an industry veteran with significant experience at Delta Airlines Inc. and General Motors Co.'s autonomous-driving unit, Cruise.
West's appointment comes at a critical juncture for Hertz, which recently announced a downsizing of its EV fleet amid lower-than-anticipated customer demand and high repair costs. The move reflects a broader reassessment within the company of its push into electric vehicles, a strategy that had initially garnered significant attention but failed to meet expectations.
Colin Farmer, the lead director on Hertz's board, expressed confidence in West's ability to steer the company through its next phase, highlighting his operational expertise and successful track record at Delta. "West's success in leading over 70,000 people at Delta and orchestrating highly effective operational turnarounds will position him well to lead Hertz," Farmer stated.
The leadership transition follows a period of financial turbulence for Hertz, with the company's stock experiencing a 27% decline at the start of the year and a 53% drop over the past 12 months. The company, which emerged from bankruptcy in 2021, has been grappling with the fallout from its EV initiative, including higher repair costs and a shift in its vehicle offerings. Earlier this year, Hertz announced the sale of approximately 20,000 electric vehicles, including Teslas, from its U.S. fleet, opting instead to focus on gas-powered vehicles.
Despite these challenges, Scherr remained optimistic about Hertz's prospects, citing stable demand and the expected benefits of strategic adjustments made to the company's EV fleet. "Based on the continued stability of the demand and rate environment, the expected benefits of the strategic decision that we made in the fourth quarter regarding our EV fleet, which is also expected to reduce operational distraction, and the continued execution of our enhanced profitability plan," Scherr stated on Hertz's last earnings call in early February.
As Gil West prepares to assume the CEO role effective April 1, the industry will be closely watching how he navigates the complex landscape of car rentals and Hertz's ongoing efforts to rejuvenate its business model. The company's pivot away from electric vehicles and towards more traditional, gas-powered options marks a significant shift in strategy, one that will undoubtedly shape its trajectory in the coming years.
