Current Event Report: The Toll of COVID-19 on Hertz Global Holdings

The COVID-19 pandemic almost paralyzed the operations of Hertz Global Holdings company. According to the company, some of its Canadian and United States (US) subsidiaries filed for bankruptcy early in 2020 (Hertz Global Holdings, 2020). In accordance with US legislation, the organization filed for voluntary bankruptcy and embarked on reorganization to salvage its operations in the US and globally. Hertz faced an abrupt decline in future bookings and revenue due to the sudden travel restrictions around the world. Notably, travel demand in most countries sharply declined, and travel companies like Hertzbore the cost (Hertz Global Holdings, 2020). In this regard, the corporation used various leadership aspects to contain the negative effects of the pandemic on its operations. 

​The events surrounding Hertz’s predicament covered a few leadership topics. For instance, the company’s management had to use innovation, problem-solving, and dealing with change to cope with the pandemic. For instance, the management has to preserve liquidity, eliminate all non-essential spending, and prioritize the safety and health of its customers and employees(Hertz Global Holdings, 2020). Accordingly, the uncertainties on when the used-car market will reopen for sales and revenue return necessitated Hertz’s financial and managerial decision to conduct reorganization (Hertz Global Holdings, 2020). Thereorganization was essential to pave the way for the company’s economic recovery. 

​I believe that other companies in the industry have an array of lessons to learn from Hertz Global Holdings. Notably, despite financial constraints and bankruptcy, the corporation continued to serve its customers and opened all its global businesses: Donlen, Hertz Car Sales, Firefly, Thrifty, Dollar, and Hertz subsidiaries (Hertz Global Holdings, 2020). Nevertheless, a company report indicated that all loyalty programs, vouchers, promotional offers, and customer reservations would continue as usual. Encouragingly, the company urged its customers to count on the same level of reliability and service, which include new projects like safety response to the pandemic, sanitization protocols, and “Hertz Gold Standard Clean.”

​Many things about the news caught my attention. Foremost, the company has survived difficult times to maintain strong earnings and revenue momentum, maintaining a leadership position in its industry (Hertz Global Holdings, 2020). The management’s resilience to contain the pandemic’s severity on its operations is commendable. According to Hertz’s CEO, the reorganization decision paves the way for future sustainability, allowing for continued operations and stronger financial foundations to withstand future shocks (Hertz Global Holdings, 2020). Moreover, Hertz employees and mid-level management across the US maintained a positive perspective during the reorganization journey. The company also attributes its resilience to a pool of loyal customers. 

​Overall, Hertz Global Holdings used various leadership aspects to contain the negative effects of the pandemic on its operation. I learned a few management lessons from the story of Hertz’s endurance amid the Coronavirus pandemic. First, the management of corporations must use innovation and involve all its stakeholders during decision-making at critical times.Second, all company departments and customer loyalty programs must keep running even during the most difficult times to maintain a steady flow of revenue. Lastly, company top management must use their current and past experiences to prepare for similar uncertainties in the future. Therefore, I am opined that Hertz will fully overcome its management and financial issues during the pandemic. The company has robust reorganization measures which will ensure continued operations in the US, Canada, and across the world. 

References

Hertz Global Holdings, I. (2020). Hertz Global Holdings takes action to strengthen capital structure following impact of global Coronavirus crisis. Retrieved 9 April 2021, from https://www.prnewswire.com/news-releases/hertz-global-holdings-takes-action-to-strengthen-capital-structure-following-impact-of-global-coronavirus-crisis-301064610.html