Monday, August 6, 2007

Chrysler CEO Hard-Charging, "Hardheaded"

Associated Press

The man named to lead the newly independent Chrysler LLC led a stellar performance at General Electric Co.'s Power Systems division as its chief executive. But he also resigned abruptly as CEO of The Home Depot Inc. this year after shareholder clashes over pay and the company's slumping share price.

It might seem obvious which story would most attract Cerberus Capital Management LP, the automaker's new owner, to Bob Nardelli. But industry leaders and a leadership expert who knows the 59-year-old well says Chrysler should benefit from the man behind both tales despite the different endings.

"What he brought to Home Depot (nyse: HD - news - people ) actually was a lot of GE," said Noel Tichy, a University of Michigan business professor who ran GE's leadership development program from 1985-87. He also profiled Nardelli in a 2002 book he co-authored, "Cycle of Leadership."

"He's hardheaded - he'd still be (at Home Depot) if he hadn't stuck his head in the sand" on a $210 million severance package, Tichy said. "That's one of his tragic flaws, but it wasn't tragic enough to stop him from re-emerging."

Nardelli, now Chrysler's chairman and chief executive, replaces Tom LaSorda, who is taking the No. 2 slot. The pair shared a handshake and posed for pictures Monday during a celebratory event at Chrysler's headquarters in Auburn Hills.

"What I bring is a fresh set of eyes - a new perspective if you will," said Nardelli, who added he will work closely with LaSorda in carrying out the automaker's restructuring plan. "These guys got it nailed down: customer first, and market focused."

Retired GE Chairman Jack Welch said Nardelli is the right choice to lead Chrysler.

"He really is a perfect industrial leader," Welch said. "He'll get the right people on products. He'll make deals with the right people."

Nardelli began his career at GE in 1971 and worked in various divisions, including appliances, lighting and transportation systems. He left for three years to work at Case Corp. but returned in 1991. He was appointed to lead Power Systems in 1995.

Nardelli was one of three top GE executives in the running to replace Welch, who retired in 2001. Jeffrey Immelt was named his successor.

Welch said GE's power systems business was losing money and had trouble with unions before Nardelli took over and invested in products, cut costs and improved labor relations. Nardelli created joint ventures around Europe and efficient, environmentally sensitive power products at a time when the market demanded them, making power one of GE's most important businesses, Welch said.

"He's a global thinker," Welch said. "He delivers."

Nardelli received a different reception from shareholders at Home Depot, which he left in January after six years.

He helped increase revenue, profits and the number of stores. But discussions about his pay - described by some lawmakers and critics as a golden parachute - and the company's lagging stock price became a distraction.

"I felt it was unfortunate - all of the rhetoric around compensation really overshadowed the job he did there," said Roger Penske, racing icon, businessman and former Home Depot board member. He cited Nardelli's charge into Mexico and other international moves as positive for the company.

"He increased shareholder value through acquisition and cash flow. ... No question he made a big difference there."

But Nardelli angered shareholders when he didn't allow general questions to be asked at last year's annual meeting, which included time limits for discussion. However, he won't have to answer to stockholders at Chrysler since it's now privately held.

Nardelli, who said he has moved more than a dozen times during his career and looks forward to relocating to Detroit, hopes his Home Depot pay package doesn't become an issue.

Penske and Tichy describe Nardelli as a hands-on guy. Tichy said Nardelli was known to get in at 6 a.m. and walk through stores with employees, and said he instilled discipline in the operations.

Tichy said Nardelli is well-equipped to make judgment calls when it comes to people, strategy and crisis management. He'll deal with all three at Chrysler, which is struggling alongside the other Detroit-based automakers.

"It's a turnaround situation," he said. "This is not a slash-and-burn cost guy. This is a guy who will rethink the business model ... and invest in building an infrastructure for the long-term."

On a personal note, Nardelli said Monday he "loves cars," and has a Chrysler PT Cruiser, Dodge Prowler and a Jeep in his "fleet." His wife of 36 years just reminded him in an e-mail that their first date was in a Dodge Dart GT, which he bought after graduating from high school.

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