Ex-Home Depot Boss to Lead New Chrysler

Chrysler chairman and CEO Bob Nardelli, right, standing with vice chairman and president Tom LaSorda, is introduced to the media at the Chrysler headquarters in Auburn Hills, Mich., Monday, Aug. 6, 2007. (AP Photo/Carlos Osorio) (Carlos Osorio - AP)

Some wondered what effect Nardelli's hiring would have on ongoing contract talks with the United Auto Workers. Nardelli helped increase revenue and profits at Home Depot and raised the number of stores the company operates. But he resigned from the company after it came under intense criticism for his hefty pay and slumping stock price. Nardelli left Home Depot with a golden parachute worth $210 million.

Nardelli said Monday UAW President Ron Gettelfinger brought up his pay package during a recent two-hour meeting, but he added that the two established a good relationship. Nardelli said LaSorda will continue to have primary responsibility for the contract negotiations.

A message was left Monday with the UAW seeking comment.

Pete Hastings, an auto industry corporate bonds analyst with Morgan Keegan & Co., said Nardelli's aggressive leadership style may hurt the company as Chrysler and the UAW hammer out a new labor agreement. The old agreement expires Sept. 14.

"He would not have been my first choice if I had been making the decision," Hastings said. "Tact is important to get done what you need to do in transforming the company and working with the unions, and I'm not sure that's his strong suit."

Nardelli said Monday that his compensation at Chrysler would be based on the company's performance, but he wouldn't give any more details. A company official familiar with his agreement said Nardelli would make $1 a year with further compensation based on performance. The official spoke on condition anonymity because Nardelli's agreement isn't public.

Nardelli said he hopes his Home Depot pay package doesn't become an issue.

"The last thing that I would want to be as part of the new Chrysler is a distraction," Nardelli said.

Like other U.S. auto companies, Chrysler has been struggling to make a profit while sales were falling and pension and retiree health costs were rising. Chrysler made $1.8 billion in 2005 but lost $618 million in 2006 and $1.98 billion before interest and taxes in the first quarter of this year.

On Friday, DaimlerChrysler transferred an 80.1 percent stake in Chrysler to New York-based Cerberus, one of the world's largest private equity companies, in a $7.4 billion deal. The German automaker, which is to be renamed Daimler AG, retained a 19.9 percent interest in Chrysler.

Chrysler, which shot off fireworks Monday to celebrate its new status, also announced that it is reviving the company's Pentastar logo. First used in 1962, the five-pointed star is returning with a three-dimensional update. The symbol will be used on buildings, signs and corporate stationery but not on vehicles or in dealerships, LaSorda said.

Besides Nardelli and LaSorda, the 11-member Chrysler board now includes representatives from Cerberus and DaimlerChrysler as well as independent directors. Chrysler's chief operating officer, Eric Ridenour, decided to leave the automaker after 23 years, Chrysler said.

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