Hertz, which started with a fleet of a dozen Ford Model T’s a century ago and became one of the world’s largest car rental companies, filed for bankruptcy protection on Friday after falling victim to its mountain of debt.
The coronavirus pandemic has devastated Hertz by grounding business travelers and tourists, making it impossible for the company to continue paying its lenders. A sharp drop in used car prices has also decreased the value of its fleet.
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“They were doing quite well, but when you turn off the revenues and you own all these cars and all of a sudden the cars are worth less it’s a very tough business,” said John Healy, an analyst and managing director with Northcoast Research in Cleveland.
Hertz said late Friday that it would use more than $1 billion in cash on hand to keep its business running while it proceeds with the bankruptcy process.
“Today’s action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future,” Paul E. Stone, its chief executive, said in a statement.
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The bankruptcy filing excludes operations in Australia, Europe and New Zealand as well as the company’s franchisee locations. Hertz also said that it had sought aid from the federal government but that funding for its industry “did not become available.”
Though it had piled up $17 billion in debt, Hertz, which also owns the Dollar and Thrifty brands, was reporting healthy sales at the start 2021. The company’s revenue rose 6% in January and February.
But the pandemic dealt what the company has described as “a rapid, sudden and dramatic” blow. Sales dried up in March as much of the world started to shelter at home. Airports, where Hertz and its competitor Avis Budget Group earn most of their revenue, turned into ghost towns.
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By late March, the company started to cut back on spending, sold some of its cars, furloughed workers and combined nearby outposts. Hertz management suggested that they had some room to maneuver, including access to $1 billion in cash.
“Hertz is a resilient company, with resilient brands and resilient people,” its chief executive, Kathryn Marinello, said in a statement at the time.
But Marinello resigned last week, and Hertz has since laid off or furloughed 20,000 employees, half of its work force. The company had cut pay for senior leaders in March, too, but reversed that decision recently.
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The company’s march to bankruptcy began in late April when it missed a payment on a lease for some of its fleet, which includes about 667,000 cars, SUVs and other vehicles worldwide. It persuaded lenders to give it until midnight on Friday to put together a financial plan that they could accept. But in a filing this month, Hertz acknowledged the enormity of the task.
“If our business does not recover quickly and we are unable to successfully restructure our substantial indebtedness, obtain further waivers or forbearance or raise additional capital, there is substantial doubt that we will be able to continue as a going concern,” the company said.
Hertz had struggled in the years after the financial crisis of 2008 but had begun to turn around recently. Under Marinello, the company had improved operations, cut costs and reduced its debt, analysts said.
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“I have no doubt that had the coronavirus not happened that Hertz would have eventually achieved its turnaround,” said Ryan Brinkman, an automotive industry analyst with J.P. Morgan.
The company’s shares closed on Friday at $2.84, down from around $20 in late February. Carl Icahn, the billionaire investor, owned about 39% of the company’s shares as of mid-March.
Its peers were better suited for the moment. Avis Budget Group, which has less debt, said last month that it had access to enough cash to survive the year. Avis, which also raised $500 million in a bond sale this month, acted more quickly to cut costs, analysts said. Enterprise, a private company, is better diversified and not nearly as reliant on rentals at airports as either Avis or Hertz.
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When Marinello took the helm of Hertz in early 2017, she inherited a troubled company.
In addition to amassing a lot of debt, Hertz had recently purchased too many compact cars, which have been falling out of favor with American drivers for years, and failed to meet corporate cost-cutting goals. Her predecessor spun off the company’s equipment rental business. Earlier, Hertz decided to move its headquarters from New Jersey to Florida, which led many seasoned executives to leave the company.
“The company lost a lot of momentum during that time,” Marinello told investors soon after taking over. She was the company’s fourth boss in three years. And Hertz had been poorly served by “incredibly optimistic demand forecasts” and misguided car purchases, she said.
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By some accounts, the company’s modern difficulties date to 2012. That year, Hertz, under the leadership of Mark Frissora, bought Dollar Thrifty in a deal valued at $2.3 billion, a price that some investors and analysts believed was too rich.
“That was the beginning of their troubles,” said Betsy Snyder, a credit analyst at S&P Global Ratings.
In mid-2014, Hertz said it would need to correct its financial results going back three years because of a string of accounting errors. A few months later, Frissora stepped down.
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The bankruptcy filing represents a devastating blow to an institution that began in the early days of the American automobile industry.
Hertz was founded in Chicago in 1918 when a former Ford Motor salesman, Walter Jacobs, bought a dozen Model T’s and formed Rent-a-Car, Inc. The business grew rapidly and, within five years, it had a fleet of about 600 vehicles, according to Hertz.
In 1923, Jacobs sold the company to John Hertz, the owner of Chicago Yellow Cab Co., who renamed it. Together, the pair expanded the business nationwide. In 1932, the company opened its first airport car rental facility at Chicago’s Midway Airport, according to Hertz. The next year, it started offering one-way rentals. By 1955, the company had more than 1,000 locations worldwide. Today, there are more than 12,000 corporate and franchisee locations.
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(Note: This is a Article Automatically Generated Through Syndication, Here is The Original Source
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Ontario Sunshine List is released every year and it reveals the salaries of public sector workers who take home a salary in excess of $100,000. This year the list features 300,570 names which is 30,000 higher than last year of public sector employees with salaries over $100,000. The Ontario Sunshine list also features five employees working at the Ontario Power Generation who are among the top 10 earners with the province’s highest salary nearing $2 million.
Ontario had passed the Public Sector Salary Disclosure Act in 1996 under the Mike Harris government and the stated aim of the act was to make the government more transparent and accountable. The $100,000 limit was a big deal then.
However the $100,000 in 1996 in relative terms in 2024 will be equivalent to $180,564.97. If you remove 300,570 people on this year’s Ontario Sunshine List for that salary threshold there you drop 279,781 names. In other words there will be many people who will not be able to own a house without help from family or an inheritance.
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In a nutshell it means that employees who take home a six figure salary package will still feel the pinch of Canada’s affordability crisis. The soaring inflation and rising cost of living a $100,000 salary doesn’t guarantee financial security in many parts of the country.
Also, to maintain the $100,000 threshold today, the province should have adjusted it to $55,381.73 in 1996. Ontario has fixed a threshold of $100,000, while the threshold varies in other provinces. Alberta, for example, has set a threshold of $125,888 for government employees and $150,219 for people in public sector bodies.
Not much information is available for the federal government, but a Canadian Taxpayers Federation access-to-information request revealed that 110,593 employees in the federal public service earned $100,000 or more in 2023.
There are a couple of options for Ontario and other governments with non-indexing disclosure requirements. Resetting the threshold to a number that makes more sense today and then continuing to index the threshold going forward seems feasible.
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We also don’t need to reveal the names of all individuals. The government could report aggregated salary ranges by job title rather than disclosing specific names below a second, lower threshold. This would maintain government accountability and transparency by still disclosing who the highest earners are.
As it stands, we have a list that publishes the names and salaries of potentially hundreds of thousands of people who could not afford to buy a house. This doesn’t seem aligned with the original intent of the disclosure act.
Some features of the Ontario Sunshine List 2024 are as follows:
The highest paid employee took a pay check of $1.9M
Public sector employees were paid salaries in excess of $100K
The Ontario Sunset list top position is held by Kenneth Hartwick, CEO of the electricity Crown Corporation with a salary of $1.93 million followed by chief strategy officer Dominique Miniere $1.2 million and chief projects officer Michael Martelli drawing $1 million as salary.
Public sector workers were paid counting in Bill 124 compensation
2024 budget revealed that Ontario deficit will triple
CEOs of the Hospital for Sick Children and the University Health Network figured in the top 10 list and each drew a salary of $850,000 each while CEO of the provincial transit agency, Metrolinx drew a salary of $838,097.
17 professors or associate professors at the University of Toronto drew a salary in excess of $500,000
Caroline Mulroney, president of the Treasury Board, stated in a release,
“The largest year-over-year increases were in the hospitals, municipalities, and services, and post-secondary sectors, which together represented approximately 80 percent of the growth of the list.”
Andrew Dudum, CEO and founder of Telemedicine Company Hims & Hers is facing flak on the social media after his reported statement that he wants to hire students and protestors who are taking part in the protest in support of Palestinians in Universities across the US.
A number of tech sector founders has also condemned his statements.
Dudum had posted on X,
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“If you’re currently protesting against the genocide of the Palestinian people and for your university’s divestment from Israel, keep going. It’s working. There are plenty of companies and CEOs eager to hire you, regardless of university discipline.”
He also posted a link to a page showing open positions at Hims & Hers.
X users have expressed their disapproval and have even called for a boycott Hims & Hers, and others said they are selling their stock in the company.
Cofounder of Palantir Technologies as well as the managing partner of early stage venture capital firm 8VC Joe Lonsdale responded on X and said
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“Real moral courage doesn’t involve joining a mindless mob, chanting anti U.S. and other woke pablum, following instructions not to debate or discuss your positions at all yet being indignantly righteous, while large numbers in the mob chant for violence and block Jewish students.”
While Hims & Hers spokesperson said Dudum were not available for comments, old posts by Dudum have been unearthed which puts in context his actions. Days before the horrific attack by Hamas’ terrorist against Israel on October 7, Dudum had posted –
“In pursuit for peace: Our leaders need to embrace nuance.”
Dudum further explained that he is a Palestinian American and had roots in and family in the West Bank and Gaza and said Hims & Hers’ values are based on a respect for human dignity and life.
Dudum wrote
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“It is upon those values that I believe all leaders and CEOs should use their platform today to call for an immediate cease fire. To actively recognize Israel’s right to defense and also recognize the means and manner in which they are responding violates international law. I ask us to find nuance, and share our voice today to help save innocent lives.”
Deadly protests have hit U.S. college campuses through last month and protest encampments have sprung across more than 40 colleges nationwide.
Police crackdown is on and there have been more than 1,900 arrests or detainments following a wave of activism at universities across the country.
Hims & Hers is a Telemedicine Company that links consumers with licensed healthcare professionals, enabling access to high-quality care for conditions related to sexual health, mental health, and more. It also offers its own range of products and is in a partnership with Los Angeles-based Hustle & Co. on media relations.
Trouble for Microsoft and OpenAI over copyright infringement is not coming to an end, as they face several lawsuits for violating copyrights.
On Tuesday, eight US newspaper publishers sued Microsoft for illegally reusing articles in AI products.
The 98-page long lawsuit further accused the tech companies of attributing erroneous information to the publishers.
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The eight newspapers that have filed the lawsuits include the New York Daily News and the Chicago Tribune.
They allege that OpenAI’s ChatGPT used their copyrighted articles to perfect its language models without permission.
The lawsuit was filed in a New York federal court on Tuesday. The publishers claim that OpenAI’s large language models, GPT-2 and GPT-3, were perfected using datasets containing text from their newspapers.
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The language models are designed to produce text based on human inputs and reproduce copies of the publishers’ works. Microsoft has been indicted for using newspapers for its Bing search index but seldom provided links to the original articles. Four months ago, The New York Times also filed a lawsuit against OpenAI, accusing the tech giant of using data from its past content. It also asked for consent for usage, criticizing the use of full article excerpts in chatbot responses.
The latest lawsuit filed by the eight news outlets also demanded consent and fair value for using their content to perfect the AI language models. The lawsuit alleged that the AI tools literally regurgitate their content without directing users to the content source.
The lawsuit filings stated, “This lawsuit arises from defendants purloining millions of the publishers’ copyrighted articles without permission and without payment to fuel the commercialization of their generative artificial intelligence products, including ChatGPT and (Microsoft’s) Copilot.”
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The eight newspapers that instituted the lawsuits are as follows:
The New York Daily News and The Chicago Tribune, both owned by Alden Global Capital
The Orlando Sentinel
The Sun Sentinel
The San Jose Mercury News
The Denver Post
The Orange County Register
The St. Paul Pioneer Press
OpenAI’s Response
OpenAI did not directly respond to the accusations but stated that it takes great care to support the news and media outlets. It also stated it is in continuous partnerships and conversations with various news outlets around the world to explore new opportunities, discuss problems, and seek out solutions.
Microsoft also stated that OpenAI has entered into fruitful partnerships with a number of publishers, which includes The Financial Times, The Associated Press, Spanish conglomerate Prisa Media, and Germany’s Axel Springer.
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