Coronavirus: Hertz declares bankruptcy in the United States and Canada

Text by: RFI Follow

The American car rental company Hertz, more than a century old and known throughout the world, placed itself this Friday, May 22, under the American regime of bankruptcies, decimated by the pandemic of Covid-19.

Publicity

For the moment, the procedure only concerns Herz's operations in the United States and Canada, the emblematic group said in a press release. It thus spares its main operational regions, notably Europe, Australia and New Zealand.

"  The impact of Covid-19 on travel demand was sudden and dramatic, resulting in a sharp drop in company revenues and future bookings  ," said the group. Hertz says it has taken "  immediate action  " that prioritizes the health and safety of employees and its customers. It also eliminated "  all non-essential expenses  ". "  However, he adds, there is still uncertainty as to the return of revenues and the complete reopening of the market [...] which required action today.  "

Half of the world's redundant workers

On April 21, Hertz had already announced that it would cut 10,000 jobs in North America, or 26.3% of its global workforce, to save money in the face of uncertainty caused by measures to stem the pandemic. This Friday, the group said that it is even 20,000 people in total who were laid off, about half of its global workforce.

In the United States, recourse to Chapter 11 is a device that allows a company that can no longer repay its debt to restructure away from creditors. Hertz did not mention the amount of its debt but the Wall Street Journal reported on Friday about $ 19 billion and nearly 700,000 vehicles largely unused because of the coronavirus.

Economic paralysis

This bankruptcy illustrates the scale of the crisis that the United States is currently going through, as a result of the paralysis of large swathes of the economy, notably transport and tourism, in an effort to contain the spread of the virus.

In total, since the sudden economic downturn in mid-March, 38.6 million people have claimed unemployment benefit in the United States. The chairman of the US central bank Jerome Powell recently discussed a probable peak in unemployment to 20 or 25%, after climbing 14.7% in April. GDP could contract by 20 or even 30% in the second quarter, after having fallen by 4.8% in the first three months of the year .

More than 1.6 million people have been infected with coronavirus in the United States and the pandemic has killed nearly 96,000 people, according to the latest data from Johns Hopkins University which refers.

► Read also: United States: more than 2.4 million new jobless claims in a week

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