Hertz eyes carmaker co-operation

By Jorn Madslien
Business reporter, BBC News, Heathrow airport, London

The transfer buses that connect Heathrow's airport terminals with the Hertz rental car depot keep arriving and departing at regular intervals.

Hertz bus operations manager Kearnan McGrane
Hertz's bus drivers re-engineered the route they were driving

It was not always so. For years the service was both slow and chaotic, until Hertz asked the drivers for ideas on how to improve it.

"We sat down and said 'let's question it'," says bus operations manager Kearnan McGrane.

"We had never questioned it; we were never flexible before."

A small team comprising drivers and managers soon discovered that it would make sense to replace large buses that circled the then four terminals with smaller buses that would serve just one or two terminals each.

"You can either go around all the terminals in an orderly fashion or you can split the routes and halve the journey times," adds regional manager Gustaf Isaksson.

Falling demand

For Michel Taride, president of Hertz Europe, the restructuring of the bus service at the Heathrow branch is an example of the "speed and depth of the transformation" Hertz is going through.

"We are proud to have done a lot of what companies are now forced to do while we were in good shape," he says, explaining that staff members are being urged to get involved in planning and improving how work is being done.

These days, the car rentals sector, including global leader Hertz, is in trouble, having seen a sharp decline in both holiday and business travel since the onset of the recession.

Ratings agency Standard & Poor's has pointed to how Hertz and its rivals have been hit by a sharp reduction in the number of flights taken and raised concerns about their ability to raise finance in the future.

Hertz's share price has plunged from a peak of $14.50 last spring and now trades at about $2.40.

Cutting costs

Shaking his head, Mr Tavares is eager to mollify investors.


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Currently, it takes carmakers between three months and one year resell a buy-back car. Mr Taride says Hertz should be allowed to keep cars running until they are sold, thus boosting its own income and reducing carmakers' costs.