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Introduction
This case study examines Hertz Global Holdings and provides a look at the events surrounding their corporate relocation with a particular focus on the aspects of corporate control involved during this process. It includes discussion of the hiring of Mark Frissora as CEO, Hertz’s acquisition of Dollar Thrifty and the consolidation of this car rental business, the corporate headquarter relocation of Hertz from Park Ridge, New Jersey, to Estero, Florida, the dismissal of Frissora as CEO, the hiring of John Tague and replacement of Tague with CEO Kathyrn Marinello.
This case begins with a description of Hertz as a company, discussing the company’s history and the time before 2007, when Mark Frissora came as CEO. During his tenure, Frissora led Hertz in a huge merger of Dollar Thrifty, a major competitor in the industry. After the merger, Hertz relocated its headquarters to Estero, Florida, ostensibly to merge the cultures of these two companies. During this process, there were several issues that Hertz had to deal with, such as material accounting errors, restatements of SEC filings and potential agency problems related to the CEO’s desire to relocate to an area in which he already owned a home.
Hertz: a history
In September 1918, 22-year-old Walter L. Jacobs opened up a car-rental operation in Chicago. Starting with a dozen Model T Fords, which he repaired and repainted himself, Jacobs expanded his operation to the point where, within five years, the business generated annual revenues of about $1m. In 1923, Jacobs sold his car rental business to John Hertz, then President of Yellow Cab and Yellow Truck and Coach Manufacturing Company. Jacobs continued as Hertz operation and administrative executive. This business, called Hertz Drive-Ur-Self System, was acquired in 1926 by General Motors.
In 1932, Hertz opened their first rent-a-car facility at Midway Airport in Chicago. That same year, they introduced the first Fly/Drive car rental program. In 1953, Omnibus Corporation bought Hertz from General Motors, and The Hertz Corporation was born. The company was listed for the first time on the New York Stock Exchange, and Walter Jacobs became Hertz’s first president, serving until 1960. In the 1970s, Hertz established their Worldwide Reservations Center and the Hertz Data Center in Oklahoma City. They soon expanded their operations...