United States —
Car rental company Hertz, hit by the impact of the coronavirus pandemic, announced Friday that it filed for bankruptcy in the United States and Canada.
Miami Mundo / .
“The impact of covid-19 on travel demand was sudden and dramatic, leading to a sharp drop in company revenue and future bookings,” the company said in a statement.
Hertz said he took “immediate steps” to prioritize the health and safety of employees and customers and eliminate “all non-essential expenses.”
“However, uncertainty persists as to when revenue will return and when the used car market will fully reopen for sales, which required action today,” he added.
Hertz’s major global operating regions, including Europe, Australia and New Zealand, are not included in the bankruptcy.
On April 21, Hertz had announced the cut of 10,000 jobs in North America, 26.3% of its global workforce, to save money after the confinement by the coronavirus paralyzed travel and the economy.
The group said on Friday that it finally laid off 20,000 people, half of its global workforce.
The company resorted to Chapter 11 of the United States bankruptcy law, a mechanism that allows a company that can no longer pay its debt to restructure without pressure from creditors.
Hertz franchises, which are not owned by the company, are not included in the Chapter 11 procedure.
Hertz did not mention the amount of his debt, but the Wall Street Journal reported on Friday that it amounted to about $ 19 billion.
“The financial reorganization will provide Hertz with a path to a more robust financial structure that better positions the company for the future, while navigating what could be an extended journey and a global economic recovery,” the company statement said.
– Victim of the crisis –
The coronavirus pandemic led numerous countries to impose containment measures that paralyzed economic activities.
Hertz’s management fears that the return to normality will be considerably delayed, and the spread of teleworking during the pandemic raises questions about whether the company will be able to recover its business clientele after the crisis ends.
The Estero, Florida-based company employed 38,000 people in late December, including 29,000 in the United States.
For a few years now, Hertz suffered from competition from Avis Budget and chauffeured transportation services like Uber.
The company recorded a net annual loss in 2019, for the fourth consecutive time. But 2020 had started well with an increase in turnover of 6% in January and 8% in February, compared to the same months last year.
The bankruptcy illustrates the magnitude of the crisis the United States is undergoing as a result of the anti-coronavirus measures, which have devastated entire sectors of the economy such as transportation and tourism.
Since mid-March, 38.6 million people have applied for unemployment benefits in the United States.