When CEO's talk about layoffs, they often talk about creating a smaller but stronger company. One company has actually done it.
Dollar-Thrifty handed out millions of dollars in bonuses over the weekend. As News on Six business reporter Steve Berg tells us, painful cuts paid off.
In the days right after September 11th, Dollar-Thrifty laid off 20% of its workforce, cut executive salaries, and froze many pay increases, but now, a year and a half later, thanks to the sacrifices, CEO Joe Cappy says they're on top of their industry. "Everybody really tightened their belt, and then they shot out of the blocks and we outperformed everybody."
Cappy says one difference between Dollar-Thrifty and other companies is that they made their cuts all at once, so workers didn't have to constantly worry about future cuts. The other secret is pretty simple. Their cars are on the road more often than their competitors. "We run 85% utilization and that compares to people like Avis and Hertz which are in the 76% to 78%." Cappy says they target the leisure customer, who rents for longer periods of time. A leisure rental will rent one for a week; a tour customer will rent one for two weeks. A business customer might be one or two days. â€œWell that means that you have to rent the car that many more times during the month to have the same kind of utilization that we have."
Cappy calls Dollar the Southwest Airlines of the car-rental game. While many other rental companies have gone bankrupt, Dollar-Thrifty has made money every year. Almost unheard of in the travel industry, and Tulsa gets to go along for the ride.
Dollar-Thrifty says it has hired back a few of the people who were laid off after September 11th.