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According to the Bloomberg Businessweek story, Hertz top management were a couple of finance bros from private equity. They appointed a Goldman CFO as CEO, one

by rchaud 2y ago

According to the Bloomberg Businessweek story, Hertz top management were a couple of finance bros from private equity. They appointed a Goldman CFO as CEO, one with no background in automotive/transport industry. The whole Tesla bet appeared to be part of a executive fever dream to rebrand Hertz as a vanguard of the future. [0] https://news.ycombinator.com/item?id=39928913 https://news.ycombinator.com/item?id=39928913

brigadier132 2y ago
Hertz is not an exciting company, the only people that want to be involved are people interested in money.
- vel0city 2y ago
  It's exciting in the same way fireworks or a train accident or a raging city fire are exiting. We're expecting to see some crazy big booms given the reagents at play.
lenerdenator 2y ago
Sounds like it's time for some lawsuits against the board/management from shareholders. EDIT: Not understanding the downvotes. Board members and executives have a fiduciary duty to shareholders. They let their hubris get the best of them and that left the company with a fleet of assets that are depreciating rapidly, even by automotive standards. Thus the company is not returning as much value as it could if it had purchased more traditional vehicles. "I have a fiduciary duty to shareholders" can't just be used by executives and board members to explain away budget cuts and massively upending peoples' lives with layoffs. It should cut both ways. Or are we going to just finally admit that this excuse only serves to protect management and capital?
- alwa 2y ago
  I don’t know, but I suspect people may be reacting negatively because, as they say, hindsight is 20/20. The bet didn’t work out, but that doesn’t mean it was a self-evidently stupid thing to try from the perspective of 2020/2021. It seems to me that sometimes somebody has to try a thing for us all to find out that it doesn’t work. If people with money in the company were sure it was a dumb idea all along, couldn’t they have sold their shares? Or even done fancy options trades to profit from their contrarian certitude? Why would a court be involved in something like this, where management very clearly said what they were going to do, they did it, and it just didn’t work out the way they’d hoped?
  - lenerdenator 2y ago
    >hindsight is 20/20 If Tesla's lack of parts is the problem - and the article asserts that as a possible problem - then it's nothing to do with hindsight. Tesla either had the demonstrable ability to provide repair/replacement parts on time, or they didn't. You get that in writing and you have people actually dig to see if the supply chain was there. That's something you check before you ink the deal. The article also mentions that there are other EVs in the fleet that haven't caused the financial problems. In other words, there's something about how Hertz structured the Tesla deal that was less-than-brilliant. > Why would a court be involved in something like this, where management very clearly said what they were going to do, they did it, and it just didn’t work out the way they’d hoped? Because they may not have done their due diligence in signing the deal with Tesla, and it's costing shareholders money. Making bets is one thing; making one that deals with something outside of your ken is another. Your job as a board or c-suite is to find the people to give you the straight dope on things you don't know about, not be distracted by new shiny from Silicon Valley.
- hluska 2y ago
  In 2020 (one year before Hertz made its purchase), Tesla models 3 and Y were retaining 90% of their resale value after three years. That resale value retention was harmed by two things that would not have been evident when they purchased the EVs: 1.) Tesla started cutting prices on new EVs. 2.) Incentives to purchase new EVs stayed high. If we interpret fiduciary duty that broadly, I think I better start cutting grass instead.
  - ghaff 2y ago
    There are a lot of reasons to think the execs who made the decision were stupid--and yes, it's easier with hindsight. But the reflexive "they should have been sued" or even tossed in jail you get here for a lot of things gets pretty dangerous and can very easily be extended to engineers who make a mistake. It does encourage the others perhaps but probably isn't what you want to do in general.
    - lenerdenator 2y ago
      > There are a lot of reasons to think the execs who made the decision were stupid--and yes, it's easier with hindsight. But the reflexive "they should have been sued" or even tossed in jail you get here for a lot of things gets pretty dangerous and can very easily be extended to engineers who make a mistake. Who's saying that engineers should be thrown in jail for making a mistake? I'm saying that there's reason to believe that maybe Hertz's leadership didn't do their jobs. Lawsuits for that kind of thing are filed all. The. Time. in this country. If we're here to create value for shareholders by any legal means, and they don't do that, well... the monetary loss and resulting lawsuit is the risk that justifies the insane amount of money people in that level of the company make. Who knows, maybe the suit would be tossed. If they don't want to deal with that, maybe a nice six-figure and full benefits compensation package would be more their speed.
  - lenerdenator 2y ago
    > 1.) Tesla started cutting prices on new EVs. Sounds like the executives who did the deal should have come to an understanding with Tesla about not doing things to massively dilute the value of the fleet. Either they forgot to, or they bought the bullsh*t. Either way they're incompetent and don't deserve more money than most people will make in their entire lives within the span of a few years of work. Drag them in for a deposition to find out which one it was and recover some of the money.
benopal64 2y ago
Have you ever had a Hertz Donut?
JohnFen 2y ago
> Hertz top management were a couple of finance bros from private equity. That explains quite a lot, right there.
Kon-Peki 2y ago
> Hertz top management were a couple of finance bros from private equity. They appointed a Goldman CFO as CEO, one with no background in automotive/transport industry. The whole Tesla bet appeared to be part of an executive fever dream to rebrand Hertz as a vanguard of the future. Mark Fields, who had spent ~30 years at Ford and was fired for not moving them fast enough into EVs, was the interim CEO while they searched for and found the Goldman guy for their permanent CEO. It was Fields that announced the deal with Tesla, although you have to wonder how much of it was already in place - he had been CEO for like 3 weeks at that point. Or, you know, maybe his thought process was "I'm not making this mistake twice" and the finance bros loved it and that's why they hired him.

by rchaud 2y ago

brigadier132 2y ago

Hertz is not an exciting company, the only people that want to be involved are people interested in money.

vel0city 2y ago
It's exciting in the same way fireworks or a train accident or a raging city fire are exiting. We're expecting to see some crazy big booms given the reagents at play.

lenerdenator 2y ago

Sounds like it's time for some lawsuits against the board/management from shareholders. EDIT: Not understanding the downvotes. Board members and executives have a fiduciary duty to shareholders. They let their hubris get the best of them and that left the company with a fleet of assets that are depreciating rapidly, even by automotive standards. Thus the company is not returning as much value as it could if it had purchased more traditional vehicles. "I have a fiduciary duty to shareholders" can't just be used by executives and board members to explain away budget cuts and massively upending peoples' lives with layoffs. It should cut both ways. Or are we going to just finally admit that this excuse only serves to protect management and capital?

alwa 2y ago
I don’t know, but I suspect people may be reacting negatively because, as they say, hindsight is 20/20. The bet didn’t work out, but that doesn’t mean it was a self-evidently stupid thing to try from the perspective of 2020/2021. It seems to me that sometimes somebody has to try a thing for us all to find out that it doesn’t work. If people with money in the company were sure it was a dumb idea all along, couldn’t they have sold their shares? Or even done fancy options trades to profit from their contrarian certitude? Why would a court be involved in something like this, where management very clearly said what they were going to do, they did it, and it just didn’t work out the way they’d hoped?
- lenerdenator 2y ago
  >hindsight is 20/20 If Tesla's lack of parts is the problem - and the article asserts that as a possible problem - then it's nothing to do with hindsight. Tesla either had the demonstrable ability to provide repair/replacement parts on time, or they didn't. You get that in writing and you have people actually dig to see if the supply chain was there. That's something you check before you ink the deal. The article also mentions that there are other EVs in the fleet that haven't caused the financial problems. In other words, there's something about how Hertz structured the Tesla deal that was less-than-brilliant. > Why would a court be involved in something like this, where management very clearly said what they were going to do, they did it, and it just didn’t work out the way they’d hoped? Because they may not have done their due diligence in signing the deal with Tesla, and it's costing shareholders money. Making bets is one thing; making one that deals with something outside of your ken is another. Your job as a board or c-suite is to find the people to give you the straight dope on things you don't know about, not be distracted by new shiny from Silicon Valley.
hluska 2y ago
In 2020 (one year before Hertz made its purchase), Tesla models 3 and Y were retaining 90% of their resale value after three years. That resale value retention was harmed by two things that would not have been evident when they purchased the EVs: 1.) Tesla started cutting prices on new EVs. 2.) Incentives to purchase new EVs stayed high. If we interpret fiduciary duty that broadly, I think I better start cutting grass instead.
- ghaff 2y ago
  There are a lot of reasons to think the execs who made the decision were stupid--and yes, it's easier with hindsight. But the reflexive "they should have been sued" or even tossed in jail you get here for a lot of things gets pretty dangerous and can very easily be extended to engineers who make a mistake. It does encourage the others perhaps but probably isn't what you want to do in general.
  - lenerdenator 2y ago
    > There are a lot of reasons to think the execs who made the decision were stupid--and yes, it's easier with hindsight. But the reflexive "they should have been sued" or even tossed in jail you get here for a lot of things gets pretty dangerous and can very easily be extended to engineers who make a mistake. Who's saying that engineers should be thrown in jail for making a mistake? I'm saying that there's reason to believe that maybe Hertz's leadership didn't do their jobs. Lawsuits for that kind of thing are filed all. The. Time. in this country. If we're here to create value for shareholders by any legal means, and they don't do that, well... the monetary loss and resulting lawsuit is the risk that justifies the insane amount of money people in that level of the company make. Who knows, maybe the suit would be tossed. If they don't want to deal with that, maybe a nice six-figure and full benefits compensation package would be more their speed.
- lenerdenator 2y ago
  > 1.) Tesla started cutting prices on new EVs. Sounds like the executives who did the deal should have come to an understanding with Tesla about not doing things to massively dilute the value of the fleet. Either they forgot to, or they bought the bullsh*t. Either way they're incompetent and don't deserve more money than most people will make in their entire lives within the span of a few years of work. Drag them in for a deposition to find out which one it was and recover some of the money.

benopal64 2y ago

Have you ever had a Hertz Donut?

JohnFen 2y ago

> Hertz top management were a couple of finance bros from private equity. That explains quite a lot, right there.

Kon-Peki 2y ago

> Hertz top management were a couple of finance bros from private equity. They appointed a Goldman CFO as CEO, one with no background in automotive/transport industry. The whole Tesla bet appeared to be part of an executive fever dream to rebrand Hertz as a vanguard of the future. Mark Fields, who had spent ~30 years at Ford and was fired for not moving them fast enough into EVs, was the interim CEO while they searched for and found the Goldman guy for their permanent CEO. It was Fields that announced the deal with Tesla, although you have to wonder how much of it was already in place - he had been CEO for like 3 weeks at that point. Or, you know, maybe his thought process was "I'm not making this mistake twice" and the finance bros loved it and that's why they hired him.