Stephen Scherr has decided to resign as the
CEO of rental car giant Hertz.
He was
only on the job for a little more than two years. He was previously with
the investment firm of Goldman Sachs.
Scherr will be replaced by Gil West, a
former chief operating officer at General Motors. He will also join the
rental car company’s board of directors on April 1.
Scherr, 59, helped Hertz emerge from
bankruptcy. But his decision to step down is blamed in part on an ill-fated
gamble to invest in several electric vehicles.
At one point, the rental car company ordered
100,000 vehicles from Tesla. It was a gamble that did not pay off.
Tesla price cut hurt resale value
Tesla cut prices and the resale value
of the electric cars plummeted. Many rental car companies sell their used
vehicles. Hertz announced its EV sell-down plans in January, citing lackluster
demand, costly depreciation and expensive repairs. The company took a $245
million charge and reported its biggest quarterly loss in years.
Shares of Hertz
fell two percent after regular trading last Friday after the company confirmed Scherr’s
departure.
His
successor, West, also worked at Delta Air Lines and was said to have played a
key role several years ago when Delta merged with Northwest.
“Gil
is a fantastic operator. We worked side-by-side for a dozen years,” Delta CEO
Ed Bastian said. “He’s an innovator, he loves technology, he’s meticulous, he’s
curious and he loves a challenge — all great attributes.”
Hertz
said Scherr will assist with the CEO transition until he leaves the company and
its board on March 31.
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