The Hertz Syndrome

Photo by Melinda Gimpel (Unsplash)

“The coronavirus has been the proverbial tide going out, exposing who’s swimming naked.”

That was the lead-in to a Wall Street Journal (WSJ) article on the forced bankruptcy of Hertz, the car rental behemoth, that was already in terrible shape before the pandemic simply finished it off.

It began with an aging fleet of cars that was becoming a turnoff to customers. Instead of buying the SUVs customers wanted, Hertz bought cheaper sedans.

“The pandemic’s economic fallout has triggered a wave of bankruptcies,” the WSJ article notes, including J.C. Penney and Neiman Marcus.

Here was the most illuminating thought in the report: “In many cases, the companies in the most trouble today are those who were also in the most trouble yesterday. The pandemic means muddling through is no longer an option.”

That was certainly the case for Hertz. Leading up to the pandemic, they had spent money on “overpriced mergers and acquisition,” were “struggling to fend off threats to its business from Uber and Lyft and other ride-hailing firms” and did not move quickly “to update technology, refresh their fleets and rebalance offerings with SUVs.” It didn’t help that they have had four different CEOs in the last 10 years.

The result? At its 2014 peak, Hertz’s market value exceeded $14 billion. Over the past few years, it hovered around $2 billion. The threat of bankruptcy sent it below $500 million. Not the end you would expect from a 102-year-old company that began “as a fleet of 12 Ford Model-Ts in Chicago and helped pioneer the rental-car business.”

I cannot help but suspect a parallel with churches, though at this stage I can only make anecdotal observations. But I am hearing of smaller, struggling churches closing permanently due to the pandemic. Others are merging with other churches to attempt to pool resources. Some are coming under the wing of much larger churches. 

Of greater parallel is what I see happening – again, anecdotally – with larger churches that have more in common with the Hertz example. I know of several large churches, best described as traditional in style and methodology, covered by the thinnest veneer of the contemporary, with a massive bricks-and-mortar footprint. They, too, had their peak in years past and have been in slow decline for some time.

There were already numerous challenges for these churches before the pandemic: an aging constituency not being supplemented with younger families, little growth from the unchurched, significant deferred maintenance, a bloated staff, and a location often situated in a transitioning community increasingly out-of-sync with the aforementioned aging constituency.

And, like Hertz, leadership can feel like a revolving door. Caught between a rock and a hard place, they often leave for greener pastures rather than attempt to lead the church to the radical (but necessary) solutions. For example, many of these churches need to completely rethink style and strategy; they need to radically reduce staff; they often need to relocate their campus and/or adapt to the new demographics of their existing mission field.  

I’ve already written of the things the pandemic has forced churches to embrace that may actually be their salvation, and of the new expectations that will be present for all churches when we emerge from this mess. My fear is that a third dynamic may be the number of churches, large and small, that will discover they were just like Hertz.

James Emery White

Sources

Nora Naughton, Matt Wirz and Cara Lombardo, “Hertz Was Already in Terrible Shape. The Pandemic Finished It Off.” The Wall Street Journal, May 25, 2020, read online.