Hertz CEO announces plans for growth with Dollar Thrifty
BY D.R. STEWART World Staff Writer
Friday, September 14, 2012
9/14/12 at 4:18 AM
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Merging Tulsa-based Dollar Thrifty Automotive Group Inc. with Hertz Global Holdings Inc. will create a dynamic company where talented Dollar Thrifty employees will have a secure future, Hertz CEO Mark Frissora says.
"We want to make sure the message is out about what our intentions are - assuage any fears about turnover," Frissora said. "There is a lot of talented people at Dollar Thrifty, and we don't want them leaving."
In his first direct address to Dollar Thrifty employees, Frissora said in an open letter published Friday in the Tulsa World that his company is excited to be joining forces after a more than two-year courtship and three buyout offers for the Tulsa company.
On Aug. 26, Dollar Thrifty and Hertz announced their boards had agreed to the $87.50-per-share, $2.3 billion acquisition of Dollar Thrifty by Hertz.
Until the proposed deal passes antitrust scrutiny by the Federal Trade Commission, Hertz and Dollar Thrifty will be operated as stand-alone companies, Frissora said
"When we receive approval, we will then turn our focus to transition and integration issues," Frissora said in his letter. "To make the right decisions, we have a lot more to learn quickly about Dollar Thrifty, and about all of you. Here's what I can tell you now.
"First, there will be tremendous opportunities for individual success and advancement in our companies going forward. Adding the Dollar and Thrifty brands to Hertz will be critical to our future success in U.S. and international car rental markets. We plan to grow all three brands rapidly and we need great people to make the growth plans a reality."
Hertz's CEO said the combination of Hertz, the second-ranked U.S. rental car company, with Dollar Thrifty, the nation's fourth-largest rental car operator, will create a $10.2 billion company with three distinct brands that complement each other in the corporate and leisure markets.
Fleet sharing between leisure-oriented Dollar Thrifty and corporate-conscious Hertz will lead to better fleet utilization, lower depreciation and fleet interest expense, greater purchasing power and profit growth, Frissora said.
Integrating the companies' information technology systems will provide additional cost savings, he said.
Hertz expects $160 million in annual cost savings and sales growth after the merger.
But Frissora said some layoffs are inevitable.
"You don't need two corporate headquarters, two corporate staffs," he said. "I would imagine Tulsa employees are worried about how we are going to manage this thing, but I would hope there will be few layoffs. No growth plans are perfect. We don't know where there will be redundancies."
Hertz, based in Park Ridge, N.J., has 24,000 employees, 1,700 of whom work at a regional reservations center in Oklahoma City.
Dollar Thrifty's corporate offices at 5310 E. 31st St. house 780 employees of 5,900 workers companywide.
Dollar Thrifty owns debt-free its corporate offices in Tulsa, while Hertz owns at least one of its three buildings in Oklahoma City, Frissora said.
Dollar Thrifty's ownership of its Tulsa corporate offices and reservation center doesn't necessarily mean Tulsa is the preferred consolidation site, Frissora said, because Hertz hasn't begun its ground-level evaluation of facilities or staffing.
"Nothing's on the ground (now in Tulsa). We're doing zero right now," Frissora said. "Maybe in 60 days we will have people on the ground. It depends on how the FTC case is shaping up. We may have a better idea in October. FTC approval is the only thing we are focused on right now."
Hertz is anticipating FTC approval in mid-October and the completion of its tender offer for 29.4 million shares of outstanding Dollar Thrifty stock by the end of October, company officials said.
As soon as the merger closes, Hertz will deploy executives to Tulsa to start the company evaluation process, Frissora said.
Dollar Thrifty's employees, fleet, technology and purchasing systems, and facilities will be examined during the process, Frissora said.
"I'll have a study team looking at this for four to six months," Frissora said. "We have to see if we need more resources or less resources and determine the best fit in the company. We're going to work as hard as we can to preserve jobs and preserve talent. We're going to reach out to the high potential people."
The Hertz chief executive said the company an employee now works for will not be a factor in the employee evaluation process.
"It is my philosophy that we will be company-neutral in our analysis and we will choose who we believe will be the best managers for the jobs that overlap," Frissora said in his letter.
Original Print Headline: Hertz CEO discusses growth plans
D.R. Stewart 918-581-8451