The History of Avis

Thursday, May 17, 2007 | 03:00 PM

Wednesday's NYT had an utterly hysterical tale of the history of the Avis saga, by Michael Kinsley. Here's an excerpt:

"Since 1946, Avis has been sold or reorganized 17 or 18 times, depending on how you count. Each time Avis changed hands or structure, there have been fees for bankers and fees for lawyers, bonuses for the top executives and theories about why this was exactly what the company needed.

In 1972, ITT spun off Avis as a publicly traded company. Then, in 1977, the company was bought by another giant conglomerate, Norton Simon. In 1983, a company called Esmark (formerly Swift & Co.) bought Norton Simon.

In 1984, Esmark was bought by Beatrice Foods, and in 1986, Beatrice was bought by the leveraged buyout firm Kohlberg Kravis Roberts & Company. Kohlberg Kravis Roberts immediately sold Avis to an investment group called Wesray. Wesray sold Avis’s fleet leasing business to a company called PHH Group. Then it spun off Avis’s foreign operations and took them public as a company called Avis Europe P.L.C. And then, in 1987, Wesray sold Avis to its employees under an employee stock ownership program. Wesray more than tripled its money in 14 months.

Two years after the stock ownership deal, the company sold General Motors a complicated security that effectively gave it a 26 percent stake in Avis. Apart from that, Avis’s employee ownership experiment lasted nine years, until 1996, when Avis sold itself to a company called HFS. Employees got an average of $26,000 each. Eighty or 90 current and former Avis executives got an average of $1.75 million each.

A year later, in 1997, HFS took Avis public. (The initial public offering raised just over $330 million. The banker Bear Stearns charged $15 million for its services.) In 1999, Avis bought PHH. Remember PHH? That was the company Avis sold its fleet leasing operation to in 1987. PHH was owned by Cendant, a company that had been formed in 1997 by the merger of HFS — right, the company that had spun off Avis in 1997 — and another company called CUC. HFS had retained 19 percent of the company’s stock when it took Avis public. With the stock portion of Avis’s purchase price for PHH, Cendant now owned 34 percent of Avis..."

They try harder cause they have to!



>

Source:
We Try Harder (but What’s the Point?)
Michael Kinsley
NYTimes, May 16, 2007
http://www.nytimes.com/2007/05/16/opinion/16kinsley.html

Thursday, May 17, 2007 | 03:00 PM | Permalink | Comments (10) | TrackBack (0)
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Comments

I had such a terrible customer experience with Avis a little over 10 years ago that I still refuse to do business with them.

I turned my rental over to valet parking in Atlanta, and the driver proceded to collide with a motorcycle ... right in front of my eyes. I was automatically treated as guilty by Avis, and they did absolutely nothing to improve the situation (me being without a car). Despite my not being behind the wheel, and there being a police report, Avis hounded me for close to a year to try and collect on this. I had to fax reems and reems of documents and spend far more time than necessary dealing with the valet company. One lesson I learned was to always take full insurance when renting a car on the company dime.

Posted by: Momo Fader | May 17, 2007 4:38:09 PM

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