It is a shame that the new boss at Chrysler, formerly the chief executive at Home Depot and prior to that an executive at General Electric, is not a seasoned auto industry veteran. Yes, Ford Motor went to an outsider, Alan Mulally, a Boeing executive, but Ford's situation is different. Ford's management was dysfunctional, and that is why the company brought in a total outsider to restructure the company. It is also too early to tell whether Ford's strategy will work.
Chrysler did need a new chief executive. Tom LaSorda is quite personable and a crack manufacturing man, and maybe management in Germany played a big role in Chrysler's bad product, manufacturing and marketing decisions. But Chrysler made too many mistakes on LaSorda's watch, and he has to take responsibility. Yet he remains president.
The biggest blunder came early last year when sales began falling but Chrysler kept building vehicles — without orders from dealers. A disastrous course. The company then tried to stuff the unwanted vehicles down dealers' throats.
This drove a wedge between the company and those it depends on to sell its cars. The inventory glut was so bad that Chrysler had to give huge rebates and other offers, the highest incentives in the industry, to clear the lots.
Engineering is another area where Chrysler has disappointed. Its new four-cylinder motor, created in partnership with Mitsubishi and Hyundai, is unexceptional.
The one great success is the new Jeep Wrangler, particularly the first-ever four-door version. Dealers cannot keep these vehicles in stock. I personally think the new Chrysler convertible is a winner, too, but these are the few bright spots in a mediocre batch of cars and trucks.
The best advice I can give Nardelli is to stay in close touch with his friend Roger Penske. Penske runs a huge car dealer group, and few people have better knowledge of the business or better know how to win. He should take notes and hire the people Penske suggests.
Another important suggestion: Go easy on the cost-cutting. The company is already a bare bones operation. Killing products and shutting factories will not revive this company, either. Do not worry too much about the negotiations with the United Auto Workers. Try for the best deal possible, but know that General Motors must carry the ball in relations with the union.
A car company needs good cars and trucks, and someone to sell them. Chrysler has powerful and valuable franchises, such as Jeep and Dodge trucks. The people at Cerberus Capital Management know that Chrysler has the potential to be worth a heck of a lot more than they paid for it.
Can Chrysler come back again? Sure. Let's hope Bob Nardelli is a fast learner.