By Sholnn Freeman
Washington Post Staff Writer
Tuesday, August 7, 2007
Will Robert L. Nardelli come to be known as the Jack Welch of the American auto industry or just another outsider run off the road in Detroit?
Nardelli was named chairman and chief executive of Chrysler yesterday by its new owner, Cerberus Capital Management. The job offers a chance for a comeback for Nardelli, who was criticized for his lavish severance deal after he resigned as chairman and chief executive of Home Depot in January.
Yesterday, Nardelli presented himself in Detroit as a low-key operator whose mission is to accelerate Chrysler's restructuring plans, not to gut factory capacity and slice engineering and design staffs or wrest concessions from the United Auto Workers union.
"I'm not from the auto industry," Nardelli said during his introductory news conference. "It's important to know what you know and know what you don't know."
Nardelli said he planned to intensify Chrysler's focus on international markets. Chrysler already had plans underway to import small cars from China and invest more heavily in fuel-efficient technology, and it had vowed not to kill any of its three brand names, Chrysler, Jeep and Dodge.
"It's not about creating a new strategy," Nardelli said. "We're going to have a laser focus on the execution" of the existing plan.
Chrysler's restructuring plan calls for the elimination of 13,000 jobs and the closing of an assembly plant in Delaware. Nardelli will have to steer Chrysler through the collapse of the sport-utility-vehicle market and intensified competition in the pickup-truck and minivan categories, where the automaker is slipping fast. The 82-year-old company is also sagging under the weight of billions of dollars in retiree health-care costs.
Although he's new to the car business, Nardelli is a veteran of heavy manufacturing and has tackled other difficult assignments in the industry. In the 1990s, he climbed the executive ladder at General Electric, leading divisions that made appliances, locomotives and industrial equipment for power plants. Nardelli is one of a group of executives groomed by Jack Welch, GE's former chairman.
Nardelli is credited with taking Home Depot to new heights in his six years at the helm -- doubling the company's sales and profits and expanding the number of stores. But the improvements failed to lift Home Depot's stock price. He was criticized for leaving with a severance package that totaled about $210 million.
"There is a lot to be brought over from the GE experiences, and there is a lot that can be brought over from Home Depot," said Noel Tichy, director of the Global Leadership Program at the University of Michigan's business school. "He came into Home Depot at a time when they needed a transformational leader."
Nardelli identified international growth as a key area of focus for what he called the "new Chrysler." Each of Detroit's automakers is looking for growth in foreign markets, particularly the emerging markets of China, India and South America. Chrysler is far behind GM and Ford, which began developing overseas operations in the middle of the last century.
Earlier this year, Chrysler signed a deal to import small Chinese cars from Chery Automobile in China. While at Home Depot, Nardelli helped expand supplier activities there.
Nardelli spent the day at Chrysler's suburban Detroit headquarters, meeting employees on the company's lawn and taking congratulatory calls from other industry leaders.
Nardelli noted that the company had a "broad range of constituencies." Its 80,000 workers are anxious about whether Chrysler will be thrown into another period of wrenching job cuts and plant closings. Nardelli also has to consider the UAW, which is involved in contract talks over wages and benefits. He said yesterday that he was steering clear of "creating any issues in the negotiations," saying he would leave those talks to other executives.
Also yesterday, Chrysler announced that its previous chairman, Thomas W. LaSorda, would serve as vice chairman and president.
Charles Hughes, a former president of Mazda's North American operations, said Chrysler already had strong brands in Jeep and Dodge.
"Jeep is the iconic brand we all understand," Hughes said. "Chrysler has worked hard to make Dodge the American male brand -- tough Ram trucks, Dodge Vipers and Hemi engines. In a world of too many brands and too many products, at least two of the three brands have a pretty good market positioning."