« Choice for Chrysler CEO blasted |
Main
| Hybrid sales on pace for another record-breaking year »
August 7, 2007
Yesterday I stated that Chrysler workers and investors must be delighted by the news that former Home Depot CEO Robert Nardelli had been named to head the car company.
I sincerely hope readers understood such a sentiment to be ironic in the extreme. As I noted, Nardelli is most recently remembered for making off with $210 million after getting the travelling scholarship from Home Depot's board.
Translation: Home Depot fired Nardelli for incompetence but he still managed to finagle a disgusting amount of money out of the company.
You know, I have never been able to go to a Home Depot since then without wondering what the folks working the shopfloor in their orange overalls thought about it all.
I never asked anyone - I thought it would be pretty tasteless to ask someone earning $15 a hour or so what they might think of their "leader" making off with all that loot.
And now Chrysler owner Cerberus is downgrading Tom LaSorda and bringing in Nardelli to run the company. The arguments for the move are Nardelli's experience at GE when he cut his teeth and the fact that Cerberus is private and thus he will be able to restructure the company without answering to shareholders.
Like I said, workers must be delighted by that. And given his very mixed reputation on Wall Street, investors must be delighted too. True, his pay is nominal and essentially tied to Chrysler's performance. But for a man of his wealth, that is irrelevant.
More important, perhaps, is the signal Cerberus is sending out by hiring this controversial character. Cerberus may be hard headed about the $210 million he received from Home Depot because the terms of his payout were apparently written into his original contract.
But the message the company is sending is obtuse in the extreme and puts an enormous amount of pressure on Nardelli. Wall Street is already scratching its head, Chrysler rank and file are really displeased and it remains to be seen whether the move has undermined the ranks of senior management. Will LaSorda stay, for example?
Time will tell - but for the time being Nardelli has zero goodwill and Cerberus appears to have laid a major egg. But then Cerberus chairman is Tony Snow - the former Treasury Secretary under President George W. Bush.
And don't get me started on the acuity of that character.
- Peter C. T. Elsworth
Posted by Peter C. T. Elsworth 
at 11:07 AM to Chrysler
, commentary
| Permalink
Great commentary. you should write a bit about how Snow and Nardelli are cut from the same cloth. Snow's experience at CSX and Nardelli's at Home Depot show the same pattern:
-both were successful in absolute numbers (profits, margins, etc.)
-both were in sectors experiencing great growth
-yet, when compared to any individual competitor or to industry-wide metrics, they lagged the average
(Lowe's beat the hell out of Home Depot in same store sales and growth; Norfolk Southern basically trounced CSX in every metric.)
Basically, these clowns' "great" management performance consisted of riding high-growth sectors less effectively than anyone else in those sectors.
When they team up to take on a stagnant, low-growth industry, it's unlikely to go well.
RIP Chrysler.
Posted by: meersman on August 7, 2007 6:15 PM
Please be civil. Vicious comments, personal attacks and profanity won't be published.
