|Updated: 8/27/2012 5:57 pm
||Published: 8/27/2012 4:24 pm
It was a blockbuster deal several years in the making, when it was announced over the weekend that rental car giant Hertz agreed to buy Tulsa-based Dollar Thrifty for an estimated $3.2 billion.
The deal will make Hertz the second-largest car rental company in the United States, behind Enterprise.
The $3.2 billion offer was roughly double the offer Hertz made to Dollar Thrifty a little more than two years ago.
Now that the offer has been accepted by Dollar Thrifty, it begs the question of what will happen to Dollar Thrifty's 780 employees in Tulsa.
There are several issues at play in any decisions regarding the future of Tulsa's Dollar Thrifty workforce.
Hertz is based in New Jersey.
"It is a lot cheaper to do business here in Oklahoma, Jake Dollarhide, financial analyst and CEO of Longbow Asset Management, said. "And I think that will be one factor they'll take into consideration for the ultimate decision."
Hertz already has a major call center in Oklahoma City.
"they talk about cost-savings, they talk about synergies," Dollarhide said. "Unfortunately, that's a euphemism for job losses."
For many in the Tulsa area the news brings flashbacks to dozens of energy companies like Phillips, now ConocoPhillips, moving jobs to Houston, Texas.
"Tulsa has really bad luck with keeping companies here," Dollarhide said.
But Dollarhide also says the cost of doing business in Houston is almost as low as it is in Tulsa, so Tulsa had no competitive advantage.
That's not the case with Dollar Thrifty and Hertz. Tulsa can be a much cheaper place to do business than New Jersey.
Unfortunately, these are business decisions, not people or city decisions. And they're being made in an industry with less and less competition.
"Hertz is just trying to keep up with the Joneses here," Dollarhide said. "They don't care about Tulsa, Oklahoma. But hopefully in the end, after they do all their calculations and analysis, they will value Tulsa, Oklahoma."
But the question of how many jobs Tulsa cold lose remains.
"I think the best case scenario would be that Dollar Thrifty would have at least 500 jobs here," Dollarhide said. "That's the best case."
"Worse case is that the only jobs Dollar Thrifty had here was at the airport location."
But Dollarhide's gut feeling is optimistic.
"That Dollar Thrifty will keep more jobs than lose jobs."
Dollarhide says sale could also have an effect on consumers, as well, with less competition.
"In the last few years we've seen rental car rates go up and down," he said. "So, it really has much more to do with how the economy is doing, how the travel sector is doing. But, it certainly won't help [having less competition]."
There are still details to work out. The Federal Trade Commission still has to approve the sale. Then Hertz's shareholders will have to approve the purchase. Dollarhide says those process could take six to nine months. He thinks it will likely be close to a year before any changes could be made at Dollar Thrifty's Tulsa offices.