Thirteen months after leading ANC Rental Corp. out of bankruptcy, changing its
name to Vanguard Car Rental USA Inc. and moving its corporate headquarters to
Tulsa, William Lobeck still has moments of disbelief.
"At times, I thought it was sheer insanity," said Lobeck, Vanguard's president and
chief executive officer. "When we bought the company, reve nue was down $1
billion, its market share had dropped from 30 percent to 22 percent . . . the
company had been through five CEOs in a little over four years, and its fleet was
an unmitigated disaster."
Speaking to about 300 people at the University of Tulsa's Friends of Finance
luncheon at the Allen Chapman Activity Center, Lobeck said it was clear to him
that the bankrupt Fort Lauderdale, Fla.-based company needed a total overhaul.
Given the green light by Cerberus Capital Management LP, the New York
investment group that provided the capital to purchase ANC, Lobeck went to
work.
"We came in and said, 'We're going to change, this is what we're going to change,
and if you don't like it, you can leave,' " Lobeck said. "It was harsh."
Lobeck found a company in disarray: an aging automobile fleet and two
underperforming and incompatible information technology systems at Vanguard
subsidiaries National Car Rental and Alamo Rent A Car; dozens of overpaid
senior executives; inflated operating costs at its South Florida base; and a tired
corporate culture.
Cerberus and Lobeck were familiar with ANC. Its owner, billionaire H. Wayne
Huizenga, had entertained at least two pre-bankruptcy offers from Cerberus and
Lobeck to buy the company.
"Wayne said our offers were inadequate," Lobeck said, "but after 9/11 I have
never been so happy to be judged inadequate in my life."
In Vanguard, Cerberus and Lobeck found 14,000 employees in 80 countries, two
of the strongest brands in the industry, $2.5 billion in annual revenue and a
market-leading position in the United Kingdom.
After his initial changes at Vanguard, Lobeck, a Tulsa resident for 20 years and
husband of Kathy Taylor, executive director and secretary of the Oklahoma
Department of Commerce, dropped a bomb on the company's board of directors:
He wanted to move the corporate headquarters to Tulsa.
"You think that wasn't a tough sell?" he said.
Despite Oklahoma's down-and-dirty Dust Bowl image, Lobeck said he and the
board knew they could cut operating costs by relocating. The state of Oklahoma
sweetened the pot by providing a 5 percent annual tax rebate on payroll for up to
10 years.
"The incentives they offered as well as access to a well-qualified work force in a
geographically central location were major components of our decision," Lobeck
said last winter.
More than 1,100 South Florida employees grumbled.
"They'll be lucky if they get 5 percent of people to go," one worker told the
Miami Herald. "Nobody's going to want to go."
In the end, with only a few Floridians yet to relocate, 80 Vanguard employees --
6.9 percent of the South Florida work force -- elected to move to Tulsa.
Lobeck said one employee sold his house in Coral Gables, paid cash for a nice
home in midtown Tulsa and has enough left to put his kids through college.
"When I went to the board to pitch Oklahoma, the economic incentives looked
great," Lobeck said. "But they didn't realize that Oklahoma's greatest resource --
which I knew all about having lived here -- is its people. But nobody was talking
about it."
Vanguard plans to have hired 520 people in Tulsa by the end of 2005's first
quarter, he said. The company already has added between 400 and 425 people
locally, a Vanguard official said after the meeting.
Lobeck said Oklahomans are self-conscious about an image of the state held by
many Americans that is "totally unfounded."
"Get over it," he said. |
