The Nardelli Era Starts at The New Chrysler

Posted by: David Kiley on August 6, 2007

xler-carousel.jpg

Just back from the Chrysler press conference at which Bob Nardelli (right)was introduced as chairman and CEO. I counted at least four times that he put his hand on former CEO Tom LaSorda’s (left)shoulder or back as the two presented a love-in to fix Chrysler.

LaSorda is staying on as president and vice chairman. And I’ll have to be proved wrong. But I get the impression that LaSorda, whom Nardelli referred to as “Tommy” at one point, is in some way happy that Nardelli has come on to take the spotlight and pressure off him.

I’ve spent a little time around LaSorda the last few years. He has an ego, like any manager who gets to be CEO. But LaSorda also has a pragmatic, realistic side that I have seen come out too. With Cerberus Capital Management now controlling Chrysler, it was unlikely that LaSorda was going to run the show. He’d been handpicked by DaimlerChrysler chief Dieter Zetsche, and the two of them mangled Chrysler’s comeback over the last two years.

Bu they need LaSorda. The son of a Canadian Auto Worker, LaSorda is a key man in Chrysler negotiations right now. He is also a key guy with the network of plant managers and, increasingly, dealers. A manufacturing and production guy, LaSorda will also be a guy who focuses on one of Chrysler’s biggest shortcomings—product and design quality. And he can do so, backed up Nardelli’s well-known Six Sigma whip and without having to worry about the financial/accounting part of the job.

In football terms, I have gotten the idea that being the head coach is not as critical to LaSorda as it is to Nardelli, and that he is one of those guys who can happily step back to being, for example, the Defensive coordinator. LaSorda is happy to be in the car business. It’s his life. He knows what he, and they, can do now outside the glare of Wall Street and with the running room afforded the management team by being private. If he is successful in fixing the thing with Nardelli, he will become richer and probably see his stock rise to be CEO of another car company. In short, LaSorda seems to know that Nardelli can teach him some things and is humble enough to go back to school.

Nardelli can be a back-breaker to the managers who report to him. That’s his reputation. What we’ll be looking for is whether the unpleasant and somewhat humiliating exit from Home Depot last January translated into any management lessons to the former GE exec, or whether this opportunity to run Chrysler back into sustained profitability is all part of a revenge plan to prove Nardelli’s naysayers wrong.

It’s more than a coincidence that Cerberus reached out to Nardelli about the same time it found some $10 billion plus in debt sitting on the shelf with no buyers. Even with the debt markets suddenly sinking, there was tepid interest and enthusiasm for a debt tied to a Chrysler comeback.

Nardelli is a brand name manager, like him or not. And it appears that Cerberus felt that Nardelli’s well-known brand of operational discipline and back-breaking style is what is needed to hot-foot confidence in this turnaround idea…The New Chrysler.

Reader Comments

phil

August 11, 2007 10:17 AM

Why do the Big 3 think cheap, under developed vehicles will bring consumers to their lots? Even a rebate can't disquise the long term problems of a vehicle. I have a buddy with a Toyota Tacoma P/U with automatic and 4-cylinder with nearly 400,000 miles with the original powertrain. I have heard many people talk about Ford Rangers going the distance as well, but many of them are equipped with sticks, not automatics. In the Rangers the automatics are very weak. Better quality period should be the mission of the big three. Look under the hood of american cars these days. A mess of wires and computerized stuff to compensate for old and underdeveloped technology. I can still tune and change oil my 2005 Sentra and 1999 Camry better most cars these days. Even the Germans tried to be cheap under Chrysler and look at the result. Maybe an outsider can be good because they have no preconceived notations of that industry and avoid becoming comfortable with it.

julio

August 13, 2007 12:31 PM

Chrysler, Dodge and Jeep need to make cars and trucks customers like. They do not need Six Sigma which has failed. Honda and Toytoa make cars customers like. Honda and Toyota do not use Six Sigma. I contacted Honda and they said they do not use Six Sigma. Toyota stated the same in The Toyota Way.

Six Sigma has failed shareholders at Home Depot (Nardelli,) 3M, Motorola, American Express and even GE underperforms. Six Sigma results in disatified customers. Cerberus picked a losing football coach to stick with the football metaphor. How do they expect to win with a proven loser? I question why Cerberus did not pick a proven winner; why not recruit a winner from Honda or Toyota?

Post a comment

 

About

Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

BW Mall - Sponsored Links

Buy a link now!