Chrysler takes a gamble in naming Robert Nardelli CEO

Posted on August 8, 2007
Filed Under Business News |

Chrysler’s new owner, Cereberus Capital Management named Robert Nardelli (yes, Bob Nardelli) as the company’s new CEO. For those of you found the name familiar, yes it is the same Nardelli who in January was pushed out of Home Depot amid shareholder outrage over his $210-million pay. So when you see his name again as CEO, especially at Chrysler, it would seem like an absurd move. Why add salt to an already bleeding wound?

Maybe Nardelli isn’t the worst pick in this case; as a matter of fact, he might handle this post well beyond expectations. The reasons for Nardelli’s tarnished image would no longer be present in working for a private company:

1. Nardelli wasn’t a real stock price mover - Home Depot’s remained stagnant over his six-year tenure. This won’t be a problem anymore, considering the company’s gone private.
2. Nardelli was weakest in dealing with regular folks (Home Depot’s store managers). Okay, so how will he deal with labour unions? Answer: Chrysler president Tom LaSorda will continue to be the point person in labour talks.
3. Nardelli had a problem listening to and dealing with shareholders, which obviously won’t be a problem at private Chrysler. He can focus on fixing the business, while leaving public relations to others.

Maybe he’s the perfect CEO for a private company. Who knows? Either way, it’s a gamble. Chrysler’s selection is risky and controversial, but if it proves to be a success, Nardelli’s image of an imperious boss will be flipped around to one of the best business leaders of his time.

The way I see it is this: Chrysler is on fire. If Nardelli points the fire extinguisher appropriately, the fire will extinguish; if not, Chrysler will only burn in larger flames.

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