Hertz files for bankruptcy protection after pandemic halts travel


There's been a lot of talk about the hard-hit airline industry during the coronavirus pandemic, but the decision by the United States' No. 2 car rental firm Hertz to file for bankruptcy protection Friday is just another example of how much the travel industry as a whole is reeling.
Hertz, which was founded in 1918, has struggled since the pandemic severely reduced global travel, and its lenders were unwilling to grant another extension on its auto lease debt payments beyond Friday's deadline. The Associated Press notes the filing wasn't much of a surprise as the company warned in its first-quarter report that it may not be able to repay or refinance debt or have enough cash to keep operating (though it will continue to do so, along with its subsidiaries, during the process.)
By the end of March, the company accrued more than $24 billion in debt and was unable to generate revenue after travel largely shut down. Around that time, Hertz laid off 12,000 workers, furloughed 4,000, cut vehicle acquisitions by 90 percent, and stopped all nonessential spending, but the moves proved too late. Read more at The Associated Press and Reuters.
Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.
-
Can Gen Z uprisings succeed where other protest movements failed?
Today's Big Question Apolitical and leaderless, youth-led protests have real power but are vulnerable to the strongman opportunist
-
The allegations of Christian genocide in Nigeria
The Explainer West African nation has denied claims from US senator and broadcaster
-
The best sherries to try this autumn
The Week Recommends The warming tipple from sunny Spain is an underrated cold-weather staple
-
Gold tops $4K per ounce, signaling financial unease
Speed Read Investors are worried about President Donald Trump’s trade war
-
Electronic Arts to go private in record $55B deal
speed read The video game giant is behind ‘The Sims’ and ‘Madden NFL’
-
New York court tosses Trump's $500M fraud fine
Speed Read A divided appeals court threw out a hefty penalty against President Trump for fraudulently inflating his wealth
-
Trump said to seek government stake in Intel
Speed Read The president and Intel CEO Lip-Bu Tan reportedly discussed the proposal at a recent meeting
-
US to take 15% cut of AI chip sales to China
Speed Read Nvidia and AMD will pay the Trump administration 15% of their revenue from selling artificial intelligence chips to China
-
NFL gets ESPN stake in deal with Disney
Speed Read The deal gives the NFL a 10% stake in Disney's ESPN sports empire and gives ESPN ownership of NFL Network
-
Samsung to make Tesla chips in $16.5B deal
Speed Read Tesla has signed a deal to get its next-generation chips from Samsung
-
FCC greenlights $8B Paramount-Skydance merger
Speed Read The Federal Communications Commission will allow Paramount to merge with the Hollywood studio Skydance