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Hertz Global Holdings<\/a> Inc. is replacing its chief executive officer in the wake of a disastrous bet on electric vehicles that the company began unwinding in recent months.<\/p>\n Stephen Scherr, who ran Hertz for just over two years after three decades at Goldman Sachs<\/a> Group Inc., has decided to step down, the rental-car company said late Friday in a statement. It\u2019s replacing him with Gil West, the former chief operating officer of General Motors<\/a> Co.\u2019s Cruise robotaxi unit. West also will join the board of directors on April 1, according to the statement, which confirmed an earlier Bloomberg report.<\/p>\n Scherr, 59, joined Hertz several months after it emerged from bankruptcy and started making splashy wagers on electric vehicles. Under new owners Knighthead Capital Management and Certares Management, the rental company announced plans to order 100,000 vehicles from Tesla<\/a> Inc., sending the automaker\u2019s market capitalization soaring past the\u00a0$1 trillion<\/a>\u00a0mark at the time.<\/p>\n Hertz doubled down on EVs in the months after Scherr took over, placing big orders with\u00a0Polestar<\/a>, the electric-car maker owned by China\u2019s Geely and Sweden\u2019s Volvo<\/a> Car, and\u00a0GM<\/a>. The company ended up buying a small number of cars from the two companies, a spokesperson said.<\/p>\n Those bets went awry last year, when Tesla\u00a0slashed prices<\/a>\u00a0across its lineup to keep growing vehicle sales. This hammered the resale value of used Model 3 sedans and Model Y crossovers just after Hertz had added\u00a0tens of thousands<\/a>\u00a0of those vehicles to its fleet.<\/p>\n By December, Hertz started selling off\u00a020,000 electric vehicles<\/a>, or about a third of its EV fleet. Germany\u2019s Sixt SE \u2014 a leading car-renter in Europe \u2014 is taking even more drastic measures,\u00a0phasing Teslas out<\/a>\u00a0of its fleet entirely.<\/p>\n Hertz announced its EV sell-down plans in January, citing lackluster demand, costly depreciation and expensive repairs. The Estero, Florida-based company took a $245 million charge and reported its\u00a0biggest quarterly loss<\/a>\u00a0since the pandemic.<\/p>\n Shares of Hertz fell 2% after regular trading in New York Friday.<\/p>\n Read More:\u00a0Hertz\u2019s Tesla Fire Sale Portends an EV Reckoning<\/a><\/p>\n Scherr\u2019s successor, West, was one of nine Cruise executives that GM\u00a0dismissed<\/a>\u00a0at the end of last year after California regulators accused the company of withholding information about one of its self-driving vehicles\u00a0striking and dragging<\/a>\u00a0a pedestrian.\u00a0<\/p>\n Prior to joining Cruise as COO in early 2021, West held the same position at Delta Air Lines<\/a> Inc. There, he played an instrumental role in the integration with Northwest Airlines and was credited with improving efficiency and performance.<\/p>\n \u201cGil is a fantastic operator. We worked side-by-side for a dozen years,\u201d Delta CEO Ed Bastian said an interview. \u201cHe\u2019s an innovator, he loves technology, he\u2019s meticulous, he\u2019s curious and he loves a challenge \u2014 all great attributes.\u201dPlay Video<\/p>\n Even before they completed the Hertz acquisition, Tom Wagner at Knighthead and Greg O\u2019Hara at Certares had identified West as a CEO candidate and approached him about leaving Cruise, according to two people with knowledge of those discussions who asked not to be identified. But GM, which had big plans for robotaxis at the time, didn\u2019t want to let West go. So the investors installed Mark Fields, who\u2019d run Ford Motor<\/a> Co., as Hertz\u2019s interim CEO and conducted a full CEO search, settling on Scherr in February 2022.<\/p>\n Once he\u2019d left Cruise, Wagner and O\u2019Hara approached West again, confident that by virtue of his firsthand experience with EVs and appreciation for the pitfalls of electrification, he\u2019d be a better fit. And they liked that, as a resident of southwest Florida, he wouldn\u2019t have far to travel to Hertz headquarters, the people said<\/p>\n West will be the latest in a long line of Hertz CEOs tasked with turning the company into a more profitable player and stiffer competitor for closely held Enterprise Holdings Inc. and Avis Budget Group<\/a> Inc.<\/p>\n Before Knighthead and Certares swooped in to take Hertz out of bankruptcy, billionaire investor Carl Icahn struggled to put a shine on the\u00a0century-old business<\/a>\u00a0as its controlling shareholder. Misreading the car market has cost Hertz in the past, including under John Tague, the former United Airlines<\/a> COO whom Icahn installed as CEO in 2014.\u00a0<\/p>\n Tague inherited an aging fleet from ousted CEO Mark Frissora and\u00a0went long on passenger cars<\/a>\u00a0as consumer tastes were shifting to sport utility vehicles. He lasted a little more than two years in the job.<\/p>\n Hertz said Scherr will assist with the CEO transition until he leaves the company and its board on March 31.<\/p>\n<\/div>\n\nSubscribe to CHRO Daily, our newsletter focusing on helping HR executive navigate the changing needs of the workplace. Sign up<\/a> for free.<\/div>\n