Hertz Global Holdings is planning to spin off Hertz Equipment Rental Corp. into a standalone company; however, the move has been delayed by an internal audit of Hertz’s earnings for 2011-13 and a Securities and Exchange Commission investigation announced last year.
ENR recently sat down at its New York City office with Lisa Farrar, HERC’s senior director of marketing and e-business, to talk about the spinoff, the HERC brand and other trends in the rental business.
Now in its 50th year, HERC is the oldest business of its kind serving construction and industrial clients, with 335 locations in North America, South America, Europe, the Middle East and Asia. Over that half-century of time, the company has evolved from a pure construction equipment supplier to a global industrial source of capital goods. More than 26% of the company’s business is now in the oil and gas sector.
According to Farrar, a new brand name is in the works but still under wraps—several times during our discussion, Farrar just referred to the new company as “Newco.” Prior to joining HERC last year, Farrar was an executive at Nissan Motor Co., where one of her responsibilities was to help launch the Nissan LEAF electric car in the U.S.
ENR: What impact could the financial restatement have on the spinoff?
Farrar: Officially, it has been said that it is pending. We are not allowed with SEC to spin off until our financial statements are whole. As soon as we work through that, we are ready. In terms of operations, we are working though all the kinks to be a standalone company as soon as we move out of our existing building in Bonita Springs, Fla., which is slated for March.
What will becoming a standalone company do for HERC?
Our business model has been supporting car rental; that’s 80% of our business. Now, we are going to get the resources that we need.
When do you expect to launch the new brand?
The date of the HERC new brand launch is yet to be confirmed, but we’re still working diligently on the rebranding and excited to see it all come to fruition.
When that happens, what will the HERC brand look like?
As we are going through this renaming process, we are working with preeminent naming consultants to come up with these names. Internal engagement is key, and public engagement and disclosure is the next step. Hertz, the brand, has been on the most iconic brands lists. It is something that as soon as you see it, you think yellow and you think Gold Plus. There are a lot of positive associations with the rental car side, and for those of us over on the equipment rental side, if you are a contractor you know who we are. But we would like to make sure that everyone knows who we are through this rebranding exercise. Although I’m not at liberty to say what the new name will be at this point, please stay tuned.
In what direction would you like to take the brand?
This is a marketer’s dream; it’s a business that is a blank slate, from the name to the logo to the colors. And it is among our top employee concerns. Our employees currently bleed yellow and black. They are proud to work for Hertz Equipment Rental Corp., and I owe it to them to live up to their expectations with a rebranded HERC so, when any employee is sitting next to someone at an airport or at a dinner party they can say, “I work for Newco Equipment Rental Corp.,” proudly, and the other person will know what they are talking about.
What’s your take on the equipment rental business?
The rental market is very hot right now. Within our business, we are constantly optimizing our fleet to have the right pieces of equipment in the right locations at all times. This provides us the opportunity to be an extension of firms’ companies. We can provide them with the capital equipment that they need to get their jobs done. A lot of people globally do know that we are in the equipment rental space because of the strength of the Hertz brand.
Which rental products are particularly hot right now?
Our product mix has historically been the Big Four: Aerials, forklifts, backhoes and general rental. Believe it or not, storage trailers are hot, too. We don’t have them in all locations, but it is something that we are looking into. For instance, in our Bay Area hub, we have in excess of 1,000, and they are always occupied and on rent.