Car Rentals for the World

American Express, which likes to call itself a home away from home for Americans, last week decided to supply the home with a car. It teamed up with Hertz Corp., the world's biggest car renter, to form a new company that will rent cars around the globe. The new firm, called Hertz American Express International Ltd., will set up a system whereby a traveler can drive a Hertz car to any U.S. airport, hop a plane, and have another Hertz auto meet him at the terminal abroad. The company will first blanket Europe with rental agencies, then push on to South America and the rest of the world. Eventually, a traveler will be able to rent a car from Aachen to Zanzibar simply by phoning his nearest Hertz or American Express office, travel agent, airline or shipping company.

The deal is a natural. American Express, which has been referring car-rental requests from American tourists to other companies, will now get the customers itself. Hertz, which has been hampered in its foreign growth because of the difficulty of lining up foreign credits, will have American Express help in approaching bankers abroad.

Hertz will own 51% of the new company's stock, and Hertz Chairman Leon C. Greenebaum, 49, and Hertz President Walter L. Jacobs, 61, will run it. Not only will American Express cash in on the potentially rich market for foreign-car rentals, but the deal also calls for it to invest in Hertz Corp. so that it can participate in domestic profits. Express is buying 25,000 Hertz Corp. common shares at the current market price, has an option to buy 75,000 more over the next four years for no less than 42-7/8 or no more than 60g each. Says American Express President Ralph Reed; "The thing that attracted us was Hertz's dramatic growth. Those people are aggressive, and they are moving fast."

Hertz has indeed moved fast since 1953, when it was sold by General Motors to the old Omnibus Corp., which operated bus lines in New York City and Chicago. In four years, Hertz's operating revenues have risen from $28.7 million to 1957's expected $78 million, which will bring $6,000,000 in after-tax profits. Now that the 107-year-old company has the highly useful services of the 405 American Express offices, it can really step on the gas overseas. Says Hertz's Greenebaum: "Our goal is an annual volume of $15 million overseas in three years. By that time, we expect to make a profit on this of $1,250,000 a year."

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