Just two days following the formal takeover of Chrysler by new owners Cerberus Capital Management, the Three Headed Dog is already rolling heads, despite its earlier promises to keep the management team intact. The Detroit News reports that Chrysler Group CEO Tom LaSorda is on his way down with a demotion to president, while chief operating officer and long-time Chrysler veteran Eric Ridenour is heading for the door. Taking the CEO slot is none other than former Home Depot chairman Robert Nardelli, an autocrat best known for improving the hardware retailer's efficiencies while damaging employee morale before bailing out at the beginning of this year with a controversial $210 million golden parachute. Time will tell whether Nardelli, who also turned around GE's once-ailing Power Systems turbine manufacturing business under Jack Welch, will make a successful transition from moving pallets of mallets to minivans "engineered beautifully." Stay tuned.
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A brief history of Nardelli at Home Depot:
http://www.google.com/search?hl=en&q=+site%3Awww.businessweek.com+home+depot+nardelli&btnG=Search
I worked for home office at THD during Nardelli’s reign of terror. Chrysler employees are going to love him.
In any event, he did a good job at HD on paper. Let’s see how he fares here.
Chrysler can’t afford to pay this guy $200 million to get rid of him in 3 years!
After reading some of the posted history, it looks like this guy isn’t going to be able to do much except piss people off.
Does this mean that there is going to be a Chrysler dealer every 3 miles? I thought they were trying to reduce the dealer network.
Wow. Yeah, well. Saws, doors, microwaves, garage door openers, cars. Whatever, it’s all good right? NOT.
Obviously Cerbrus boffins haven’t read enough history to know that putting non-automotive guys in charge of automotive companies doesn’t work out so well.
Just ask all the guys and gals who lost their jobs at Packard, then Studebaker Packard back when the imbiles on the board put James Nance (aka “Hotpoint Jim”) in charge of Packard, which then bought Studebaker.
Almost as dumb a move as Cerbrus buying Chrysler…
Chrysler RIP – within 15 years, you’ll be gone forever, if you follow the same timeline as Packard and Studie.
But then again, things move MUCH faster nowadays than the 50’s. Five years for Chrysler, then?
pb35
Does this mean that there is going to be a Chrysler dealer every 3 miles?
And they’ll be filled with part-timers who know little about the product they’re pushing. Oh, wait…
Glenn 126:
You forgot about Alan Mulally.
Mulally owns house, he’s gonna save Ford’s sizzling bacon. I think he’s done some good things already and I’m fairly optimistic about Ford’s chances in the next few years. GM, not so much. Chrysler, with Nardelli at the head, not so much at all. There’s a reason I always turn into Menard’s rather than Home Depot nowadays, and I think this fellow is going to find a way to drive even more customers away from Chrysler. He might look good on paper, but his capacity for outrageous greed and his awful management style only foretell bad news for Cerberus.
Yet another example of the close fraternity that corporate America has become. What was once a meritocracy has become nothing more than an old boys club, each one padding the other’s bank account.
This should be less about this guy’s terrible mgmt style and more about how his buddies got him the job in the first place. Know what you can do? Do not buy Chrysler products and encourage everyone you know to do the same. Most of it is below average product anyway.
Haven’t we seen enough of this “loyalty first, competence second (or third or fourth)” over the last few years?
Its interesting that Nardelli does not need to work, does not need the money either.
Cerberus must have concluded that its best to have an individual like Nardelli, do the “heavy lifting” with the UAW, and whatever other lifting is on the horison.
He’ll probably save the company a good bit of money by inspiring people to quit rather than laying them off.
Cerberus must have figured that Nardelli’s virtues outweighed his “management style” issues. You can read our piece HERE.
It’s a pretty big bet they’re making. I hope the bet pays off.
B Moore – Autosavant.net
AGR: Cerberus must have concluded that its best to have an individual like Nardelli, do the “heavy lifting” with the UAW
Chrysler claims that LaSorda will be leading the UAW negotiations. My guess is that this is true, but that he will be following Ridenour to the exit not long after those have been inked.
I would also be watching the horizon for more defections. This probably isn’t the last management swap that you’ll be seeing in Auburn Hills.
Oh goody, another widget manager. Cars, hammers, trucks, plants, people, what the hell, it is all the same, use the same equations, all businesses are exactly alike and take absolutely no knowledge whatsoever of the underlying products. Just plug in the numbers, come to your conclusions. And if guesses are wrong and it goes to all hell in a handbasket, who cares, got mine, got the nice house, see you in Aruba Rabid Rick!
I worked part time in on weekends at Home Depot for about 5 years – I got to experience first hand his short-sightedness and greed in running Home Depot into the ground. He was not liked by the low level peons at the store level either.
He should be a perfect fit for the new owners of Chrysler.
Well, they can park all the unsold RamsN’Rentals at the Chrysler Depot.
Robert Nardelli was a successful top Executive under Jack Welch who increased shareholder value dramatically…Home Depot, same thing…And worth more than his $210M package by doubling Home Depot profits.
Nardelli at Chrysler? Hollywood could not write a better drama! Nardelli will torque-off the “proper” people…He knows how to identify and chop dead wood.
Chysler has a good chance at becoming a dominate global player…If they can stay solvent…BIG If.
I guess what I find disappointing is that Wolfgang Bernhard didn’t take the job. Perhaps he took a look and decided Chrysler wasn’t going to make it, or if it was, it would be a horrible five years to get to the other side.
I guess Nardellin doesn’t know any better, or is so anxious to improve his reputation, he’ll take any chance.
Love him or hate him, Nardelli’s selection provides some insights as to what’s to come. I suspect that it means this:
(a) Cerberus is in it for the long haul, or at least the medium haul. Immediate liquidation of a bulk of the company is not an objective. Nardelli is a turnaround guy, and he has been hired, rightly or wrongly, to turn things around;
(b) The platitudes about preserving the old management team and its strategic plan were just that — platitudes. You can bet that Nardelli will be starting from scratch, and the chances that LaSorda’s plan being the way forward are about nil. Nardelli will do what he wants, and any resemblance to the prior plan will be strictly coincidental;
(c) More shakeups are to come. Expect plans and threatened plans to be used to leverage the union, while other major plans may not be announced until after the ink is dry on the UAW contract;
(d) LaSorda will be gone. After the deal with the union is struck, he will either leave or become some sort of consultant emeritus (i.e. a guy on the payroll who doesn’t do anything.)
Just food for thought. If I’m wrong, then humble pie will be on my menu.
Nardelli did cut costs at Home Depot, but to the point where it damaged HD’s ability to make more money. When he finally left, HD was ranked at the very bottom of customer service surveys among national stories. Blogs and online bulletin boards are full of stories from from former HD customers telling how they left the store in frustration after not being able to find sales clerks or people to help them carry goods to their cars and trucks.
At what price will he cut costs at Chrysler? Will anyone want to buy a Chrysler after he’s had his way at the company?
Robert Nardelli was a successful top Executive under Jack Welch who increased shareholder value dramatically…Home Depot, same thing…And worth more than his $210M package by doubling Home Depot profits.
HD stock languished and was lower when he left in 1/07 than when he arrived at 12/00 — not to mention the slash-and-burn damage he did to Home Depot’s customer satisfaction and reputation.
This is somehow worth $200+ million when you’re one of the anointed cronies of corporate America.
I see that the Chief UAW person like the new Man at Chrysler, strange bedfellows eh!
Robert Nardelli, how awful. From everything I have read over the years I cannot imagine a worse choice. Can’t these guys steal anyone from Toyota and Honda and start with a clean sheet of paper?
Mulally’s not the same – he came from a manufacturing background and is not just a budget slasher. Cereberus is setting up for a fire sale of assets once Nardelli does his magic; equity firms are in it only for the short term, and Nardelli will cut costs by putting band-aids on the wounds, but the patient is already on life support. The guys from Daimler Benz did do a lot for Chrysler and it is sad to watch as it is flushed down the toilet…
The “brand” is worth money, just like all that Chinese stuff now masquerading as former U.S. brands; it seems likely that Chrysler products of the future will be built in China. Marantz, Boston Acoustics, Macintosh – all once excellent brands now owned by D&M Holdings based in Kawasaki, Japan. This time the money will come from China and the U.S. factories will be sold to a new post-bankruptcy holding company which will have no obligation whatsoever to the thousands of people who were lead to believe that retirement and health benefits would be paid for their long years of service.
Did anyone else catch the “Bizarro” comic strip for today, Monday, August 6, 2007. I think it must be taking place in the Chrysler boardroom.
I hope they don’t change the link before everyone gets a chance to see it.
Here’s a link to it on the Seattle Post-Intelligencer:
http://seattlepi.nwsource.com/fun/bizarro.asp
Here’s a link to it from the Washington Post:
http://www.washingtonpost.com/wp-srv/style/comics/king.htm?name=Bizarro&date=20070806
How sad…..but then, no one is surprised to see even mediocre CEOs get other jobs fairly easily. I call Nardelli mediocre because it is easy to slash costs if you have no regard for tomorrow, which is what he did. Much harder to cut costs while keeping morale up and developing a long-term strategy.
That makes me hope that Chrysler will fail miserably. Much as Bernhardt is controversial, the guy is a real piston-head and does care (not much, but still…) about employees.
Hellllooooo Six Sigma!
Yet another example of the close fraternity that corporate America has become. What was once a meritocracy has become nothing more than an old boys club, each one padding the other’s bank account.
Hey, you stole my line!
Seriously though, as others have mentioned, Home Depot is a miserable freaking place to shop. I remember a great Simpson’s where they are in front of a big box store where the slogan is ‘Where Shopping Is A Bewildering Ordeal’. That’s Home Depot. Not too mention the fact that their light fixtures are cheap Chinese made crap that doesn’t last…oh wait, that’s where Chery comes in. I don’t follow HDs stock, but as a customer I’d never set foot in that damn store again.
So a guy who walked away with $200 million is going to be the same guy effectively asking the UAW to make concessions? This oughta be good.
The last bit of gossip I read, I’m not sure if it’s true, is that Nardelli is supposedly going to be “paid for performance” and that until Chrysler makes a profit he’s only being paid a single dollar ($1.00) per year.
With Bill Ford I could see it. With Nardelli? Maybe he has a buyer lined up for the real estate where the factories now stand. Who knows who might want to buy the tooling?