Monday, August 6, 2007

UPDATE: Chrysler CEO: Co's Restructuring Plan Adequate

Dow Jones

(Updates with additional comments from Nardelli on compensation, UAW talks, and restructuring.)

By John D. Stoll


DETROIT -(Dow Jones)- Chrysler LLC Chief Executive Bob Nardelli, calling the company's ongoing restructuring plan adequate, said Monday that he will bring a "laser focus on the execution" of that plan while scrambling for ways to potentially accelerate it.

Nardelli, who was named Chrysler chief executive on Monday, most recently ran Home Depot Inc. (HD). His severance package has been a source of controversy since he left the company.

Nardelli, speaking during a press conference, declined to give specifics of his Chrysler compensation package, but insisted "my success is rooted in the success of the company...I think that's the right way to have it."

As for the company's restructuring plan, first announced in February, it could be accelerated thanks to Chrysler's status as a private company, Nardelli said.

"We have the ability to move with speed, we have the ability to move with flexibility," Nardelli said, referring to the company's ability to execute as a private company. For instance, Nardelli said the company may be able to move quickly to monetize some assets that may not be fully valued. Nardelli insisted the company will focus on quickly improving earnings and free cash flow.

Chrysler until last week was a component of the former DaimlerChrysler AG ( DCX). Under the current restructuring plan, Chrysler is not expected to post a profit until 2008.

Nardelli pointed to various points of the current Chrysler restructuring, launched in February, and insisted "they got it." Still, he did not directly say the restructuring plan, which calls for an assembly-plant closure and thousands of job cuts, will not be tweaked, and he did say the company will revisit capital allocations, design, and other major parts of the business.

He said the company's private status might allow the "give us the opportunity to move more quickly" on restructuring.

The hiring of Nardelli comes as Chrysler engages in contract negotiations with the United Auto Workers union. Nardelli said outgoing Chief Executive Tom LaSorda, who remains president and vice chairman, will head UAW negotiations.

Nardelli said he has met with UAW President Ron Gettelfinger, and described their initial conversation as positive. "We established a very good relationship."

He hinted that Gettelfinger brought up Nardelli's past compensation issues during the discussions, but said he hopes the controversy does not cloud ongoing negotiations.

"The last thing I would want to be as a part of the new Chrysler is a distraction," Nardelli said. "It certainly is my hope that that does not become an issue."

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