New CEO swaps executives, discusses selling operations
August 29, 2007
Chrysler chief Bob Nardelli is wasting no time putting his stamp on the newly private automaker: juggling the executive ranks, discussing his vision with company leaders and exploring the possible sale of some Mopar operations and other units.
And this from a man who says he won't really get going for 100 days.
Nardelli, Chrysler's new chief executive officer and chairman, addressed more than 300 senior executives at an all-day meeting Tuesday at the Hyatt Regency Dearborn.
The group, which is expected to meet again today, spent time talking about the company's roller-coaster past and plotting strategy for the future as a stand-alone company under Cerberus Capital Management's control.
Chrysler President Tom LaSorda also attended the meeting, which had been planned prior to Nardelli taking over as the top executive in early August, shortly after Cerberus completed its deal to acquire the Auburn Hills automaker. A Chrysler spokeswoman confirmed the meeting.
On Tuesday, Chrysler also announced the appointment of Andreas Schell as the director overseeing the ongoing turnaround plan that was announced in February after Chrysler lost $1.5 billion last year, a figure later adjusted to $680 million because of accounting changes.
Chrysler lost $2 billion in the first three months of this year. Its second-quarter financial results are expected to be released today by former owner DaimlerChrysler AG, which retains a 19.9% stake in Chrysler.
Along with Schell's appointment, Chrysler made five other moves within its executive ranks dealing with manufacturing, including naming Cynthia Sidoti as the new plant manager at the Sterling Heights Assembly Plant.
Meanwhile the Wall Street Journal reported Tuesday afternoon that Chrysler looks to sell or close all or parts of certain non-core assets, such as the Mopar replacement-parts business and Chrysler Transport, as part of its ongoing negotiations with the UAW over a new labor contract to replace the one that expires Sept. 14.
A spokeswoman for Chrysler and a spokesman for the UAW declined to comment.
The February turnaround plan hinted at possible efforts to shed non-core assets. Then-CEO Tom LaSorda laid out a plan that would explore the sale of support operations, including transportation services. Chrysler also announced plans in December to idle the Cleveland Parts Distribution Center, which is part of the Mopar parts operation.
A person familiar with the situation said Chrysler looks at selling certain Mopar-related operations, such as warehousing and packaging, not the performance-oriented brand.
UAW Local 412 President Jeff Hagler is warning his members that Chrysler is trying to eliminate several units of housekeepers and replace them with contract workers.
"They do not care if we are efficient or not. They only care about dollars," the local leadership told its members in a recent message. "Once again we have to ask everyone to be patient. We are meeting daily to strategize and plan for probably the fight of all fights for all of our futures at Chrysler."
Hagler, whose Warren-based local represents a range of workers at various sites, could not be reached for comment Tuesday.
Earlier this month Nardelli said one of the benefits Chrysler has as a private company is its ability to sell assets to increase the company's cash flow.
In discussing that benefit, Nardelli talked about looking through the turnaround plan with LaSorda, noting that, as a private company, "we'll want to monetize those assets immediately."
"It's not about what happens at the quarter. It's about cash," LaSorda said at the Aug. 6 news conference celebrating Nardelli's arrival.
Nardelli toured his first Chrysler assembly plant Monday in Toledo, where the company manufactures the Jeep Wrangler.
He told the Rockford Register Star in Illinois last week that it will take about 100 days before he can make an assessment of changes required to improve Chrysler.
Several changes have been made to the executive ranks in recent weeks, including the hiring of a chief marketing officer from Toyota Motor Corp.'s luxury Lexus brand and the appointment of a chief financial officer.
Schell's new position overseeing the turnaround plan is a consolidation of several responsibilities, including: recovery and transformation plan, business strategy, material cost management and executive planner for the office of the chairman.
Schell will report directly to Nardelli and LaSorda. He started at Daimler-Benz AG in 1996 and joined Chrysler Group in 2002. He most recently held the position of senior manager to the CEO.
"We are excited about the newly created organization," Nardelli and LaSorda said Tuesday in a joint statement to Chrysler employees.
"We ask that everyone give their full support to Andreas and his team as they pursue and implement business strategies critical to the success of the New Chrysler."
While Chrysler is seeing a lot of changes, Gerald Meyers, a University of Michigan business professor and former chairman of American Motors Corp., expects more to come.
"This is just the beginning," he said. While some of the recent appointments were in the works before Nardelli was named CEO, Meyers notes that the new boss had to give final approval.
"He's not going to resist making changes."