Monday, March 18, 2024

my ELECTRIC CAR is now WORTHLESS EVen the DEALERSHIP doesn’t want it bac...

CEO steps down after being hit with expensive EV repairs and low resale prices following purchase of 100,000 Teslas

 https://vignette.wikia.nocookie.net/logopedia/images/2/2a/Hertz.png/revision/latest?cb=20170421154851

https://fortune.com/2024/03/15/ceo-steps-down-prices-following-purchase-teslas/ 

Hertz Global Holdings 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.

Stephen Scherr, who ran Hertz for just over two years after three decades at Goldman Sachs Group Inc., has decided to step down, the rental-car company said late Friday in a statement. It’s replacing him with Gil West, the former chief operating officer of General Motors Co.’s Cruise robotaxi unit. West also will join the board of directors on April 1, according to the statement, which confirmed an earlier Bloomberg report.

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 Inc., sending the automaker’s market capitalization soaring past the $1 trillion mark at the time.

Read more: Hertz’s electric vehicle and CEO about-face is the latest twist after a COVID bankruptcy filing and a deep relationship with Carl Icahn

Hertz doubled down on EVs in the months after Scherr took over, placing big orders with Polestar, the electric-car maker owned by China’s Geely and Sweden’s Volvo Car, and GM. The company ended up buying a small number of cars from the two companies, a spokesperson said.

Those bets went awry last year, when Tesla slashed prices across 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 tens of thousands of those vehicles to its fleet.

By December, Hertz started selling off 20,000 electric vehicles, or about a third of its EV fleet. Germany’s Sixt SE — a leading car-renter in Europe — is taking even more drastic measures, phasing Teslas out of its fleet entirely.

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 biggest quarterly loss since the pandemic.

Shares of Hertz fell 2% after regular trading in New York Friday.

Read More: Hertz’s Tesla Fire Sale Portends an EV Reckoning

Scherr’s successor, West, was one of nine Cruise executives that GM dismissed at the end of last year after California regulators accused the company of withholding information about one of its self-driving vehicles striking and dragging a pedestrian. 

Prior to joining Cruise as COO in early 2021, West held the same position at Delta Air Lines Inc. There, he played an instrumental role in the integration with Northwest Airlines and was credited with improving efficiency and performance.

“Gil is a fantastic operator. We worked side-by-side for a dozen years,” Delta CEO Ed Bastian said an interview. “He’s an innovator, he loves technology, he’s meticulous, he’s curious and he loves a challenge — all great attributes.”Play Video

Even before they completed the Hertz acquisition, Tom Wagner at Knighthead and Greg O’Hara 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’t want to let West go. So the investors installed Mark Fields, who’d run Ford Motor Co., as Hertz’s interim CEO and conducted a full CEO search, settling on Scherr in February 2022.

Once he’d left Cruise, Wagner and O’Hara approached West again, confident that by virtue of his firsthand experience with EVs and appreciation for the pitfalls of electrification, he’d be a better fit. And they liked that, as a resident of southwest Florida, he wouldn’t have far to travel to Hertz headquarters, the people said

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 Inc.

Before Knighthead and Certares swooped in to take Hertz out of bankruptcy, billionaire investor Carl Icahn struggled to put a shine on the century-old business as its controlling shareholder. Misreading the car market has cost Hertz in the past, including under John Tague, the former United Airlines COO whom Icahn installed as CEO in 2014. 

Tague inherited an aging fleet from ousted CEO Mark Frissora and went long on passenger cars as consumer tastes were shifting to sport utility vehicles. He lasted a little more than two years in the job.

Hertz said Scherr will assist with the CEO transition until he leaves the company and its board on March 31.

Illegal Alien Caught At Border Says He’s A Hezbollah Terrorist, Planned To ‘Make A Bomb’: Report

 An Iranian protester holds up a shroud-wrapped package, symbolizing a body of a Palestinian child, in front of a Lebanon's Hezbollah flag at Enghelab (Revolution) square during an anti-Israeli rally in Tehran, November 18, 2023.

https://www.dailywire.com/news/illegal-alien-caught-at-border-says-hes-a-hezbollah-terrorist-planned-to-make-a-bomb-report

U.S. border officials captured a Lebanese national on the southern border more than a week ago who told agents he was a member of the Hezbollah terrorist group planning to make a bomb in the United States.

The New York Post reported that U.S. Border Patrol agents arrested 22-year-old Basel Bassel Ebbadi on March 9 near El Paso, Texas.

An internal Border Patrol document obtained by The Post designated Ebbadi’s apprehension as a “Significant Arrest.”

“El Paso Sector Intelligence Agents assigned to the Tactical Terrorism Response Team (TTRT) interviewed Basel Bassel EBBADI from Lebanon after he made terroristic threats to personnel at the EP Sector Hardened Facility,” the document said. “Post Miranda, Basel Bassel EBBADI claimed membership to a foreign terrorist organization.”

The document said that two days after he was arrested, medical staff was evaluating him and asked what he was doing in the U.S., to which he responded: “I’m going to try to make a bomb.”

He reportedly told U.S. officials that he had trained with Hezbollah, an Iranian-backed Islamic terrorist group based in Lebanon, for seven years and was an active member involved in guarding the group’s weapons.

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He told officials that his training focused on “jihad” and killing people “that was not Muslim,” the report said. He was planning on making his way to New York.

The Post report was viewed tens of millions of times on X on Sunday and generated notable responses from conservative leaders.

Sen. Joni Ernst (R-IA) posted: “Biden’s open border is an open invitation for Iran-backed terrorists to infiltrate our homeland. This will only get worse until Biden secures the border.”

Half Of Downtown Pittsburgh Office Space Could Be Empty In 4 Years

 

https://www.zerohedge.com/markets/half-downtown-pittsburgh-office-space-could-be-empty-4-years 

Downtown Pittsburgh Implosion

The Post Gazette reports nearly half of Downtown Pittsburgh office space could be empty in 4 years.

Confidential real estate information obtained by the Pittsburgh Post-Gazette estimates that 17 buildings are in “significant distress” and another nine are in “pending distress,” meaning they are either approaching foreclosure or at risk of foreclosure. Those properties represent 63% of the Downtown office stock and account for $30.5 million in real estate taxes, according to the data.

It also calculates the current office vacancy rate at 27% when subleases are factored in — one of the highest in the country.

And with an additional three million square feet of unoccupied leased space becoming available over the next five years, the vacancy rate could soar to 46% by 2028, based on the data.

Property assessments on 10 buildings, including U.S. Steel Tower, PPG Place, and the Tower at PNC Plaza, have been slashed by $364.4 million for the 2023 tax year, as high vacancies drive down their income.

Another factor has been the steep drop — to 63.5% from 87.5% — in the common level ratio, the number used to compute taxable value in county assessment appeal hearings.

The assessment cuts have the potential to cost the city, the county, and the Pittsburgh schools nearly $8.4 million in tax refunds for that year alone. Downtown represents nearly 25% of the city’s overall tax base.

In response Pittsburgh City Councilman Bobby Wilson wants to remove a $250,000 limit on the amount of tax relief available to a building owner or developer as long as a project creates at least 50 full-time equivalent jobs.

It’s unclear if the proposal will be enough. Annual interest costs to borrow $1 million have soared from $32,500 at the start of the pandemic in 2020 to $85,000 on March 1. Local construction costs have increased by about 30% since 2019.

But the city is doomed if it does nothing. Aaron Stauber, president of Rugby Realty said it will probably empty out Gulf Tower and mothball it once all existing leases expire.

“It’s cheaper to just shut the lights off,” he said. “At some point, we would move on to greener pastures.”

Where’s There’s Smoke There’s Unions

In addition to the commercial real estate woes, the city is also wrestling with union contracts.

Please consider Sounding the alarm: Pittsburgh Controller’s letter should kick off fiscal soul-searching

It’s only March, and Pittsburgh’s 2024 house-of-cards operating budget is already falling down. That’s the clear implication of a letter sent by new City Controller Rachael Heisler to Mayor Ed Gainey and members of City Council on Wednesday afternoon.

The letter is a rare and welcome expression of urgency in a city government that has fallen in complacency — and is close to falling into fiscal disaster.

The approaching crisis was thrown into sharp relief this week, when City Council approved amendments to the operating budget accounting for a pricey new contract with the firefighters union. The Post-Gazette Editorial Board had predicted that this contract — plus two others yet to be announced and approved — would demonstrate the dishonesty of Mayor Ed Gainey’s budget, and that’s exactly what’s happening: The new contract is adding $11 million to the administration’s artificially low 5-year spending projections, bringing expected 2028 reserves to just barely the legal limit.

But there’s still two big contracts to go, with the EMS union and the Pittsburgh Joint Collective Bargaining Committee, which covers Public Works workers. Worse, there are tens — possibly hundreds — of millions in unrealistic revenues still on the books. On this, Ms. Heisler’s letter only scratched the surface.

Similarly, as we have observed, the budget’s real estate tax revenue projections are radically inconsistent with reality. Due to high vacancies and a sharp reduction in the common level ratio, a significant drop in revenues was predictable — but not reflected in the budget. Ms. Heisler’s estimate of a 20% drop in revenues from Downtown property, or $5.3 million a year, may even be optimistic: Other estimates peg the loss at twice that, or more.

Left unmentioned in the letter are massive property tax refunds the city will owe, as well as fanciful projections of interest income that are inconsistent with the dwindling reserves, and drawing-down of federal COVID relief funds, predicted in the budget itself. That’s another unrealistic $80 million over five years.

Pittsburgh exited Act 47 state oversight after nearly 15 years on Feb. 12, 2018, with a clean bill of fiscal health. 

It has already ruined that bill of health.

Act 47 in Pittsburgh

Flashback February 21, 2018Act 47 in Pittsburgh: What Was Accomplished?

Pittsburgh’s tax structure was a much-complained-about topic leading up to the Act 47 declaration. The year following Pittsburgh’s designation as financially distressed under Act 47 it levied taxes on real estate, real estate transfers, parking, earned income, business gross receipts (business privilege and mercantile), occupational privilege and amusements. The General Assembly enacted tax reforms in 2004 giving the city authority to levy a payroll preparation tax in exchange for the immediate elimination of the mercantile tax and the phase out of the business privilege tax. The tax reforms increased the amount of the occupational privilege tax from $10 to $52 (this is today known as the local services tax and all municipalities outside of Philadelphia levy it and could raise it thanks to the change for Pittsburgh).

The coordinators recommended an increase in the deed transfer tax, which occurred in late 2004 (it was just increased again by City Council) and in the real estate tax, which increased in 2015.

Legacy costs, principally debt and underfunded pensions, were the primary focus of the 2009 amended recovery plan. The city’s pension funded ratio has increased significantly from where it stood a decade ago, rising from the mid-30 percent range to over 60 percent at last measurement.

The obvious question? Will the city stick to the steps taken to improve financially and avoid slipping back into distressed status? If Pittsburgh once stood “on the precipice of full-blown crisis,” as described in the first recovery plan, hopefully it won’t return to that position.

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