Chrysler's Nardelli: I'm probably gone.

Posted by: David Kiley on April 17, 2009

Chrysler CEO Robert Nardelli confirmed in a letter to employees today that he will likely be replaced as CEO of the automaker in the coming weeks as the company faces either an alliance with Italian automaker Fiat or a bankruptcy reorganization or liquidation. The company’s board, too, would be replaced, he said.

The admission from Nardelli, confirming a report in Businessweek.com on April 14, comes as the company is facing an April 30 deadline with the White House to cut a debt reduction deal with banks holding $6.9 billion of secured debt, as well as with labor unions to take lower wages and benefits.

Executives familiar with the negotiations say that banks so far have been uncooperative, and that the Canadian Auto Workers union has been reluctant to accept concessions being asked for. The United Auto Workers, representing U.S. workers, have postponed further talks with General Motors, which is facing a May 31 deadline with the White House, to focus on its Chrysler talks.

Fiat has a deal in principal struck with Chrysler and its majority owner, Cerberus Capital Management, to take a 20% stake in the automaker in exchange for sharing vehicle engineering and engine technology with Chrysler and agreeing to joint manufacturing and distribution of Fiat and Alfa Romeo vehicles. But that deal is contingent on the White House accepting Chrysler’s debt and labor restructuring plan and lending the company $6 billion of tax-payer money.

In Nardelli’s letter to employees, the former Home Depot CEO said a new board of directors will have the power to appoint a new CEO. “The majority of the directors will be independent (not employees of Chrysler or Fiat),” Mr. Nardelli wrote. He added that the board “will have the responsibility to appoint a chairman and select a CEO with Fiat’s concurrence.”

Executives close to Chrysler say that it is possible that Fiat CEO Sergio Marchionne will hold the title of CEO, similarly to the way Carlos Ghosn was CEO of both Renault and Nissan for a few years after he was granted the job at Renault. Renault has a controlling interest in Nissan, and had sent Ghosn to Nissan to turnaround the then-ailing Japanese automaker.

Nardelli was installed as Chrysler’s CEO by Cerberus after the private equity firm acquired 80.1% of the automaker in 2007 from Daimler-Benz. As part of the government bailout, Cerberus has agreed to zero-out its equity stake in the automaker, though it retains ownership of Chrysler Financial, the automaker’s loan-making arm.
Nardelli was somewhat of a surprising choice to run Chrysler. While Ford CEO Alan Mulally, who came to the automaker in 2006 from Boeing Co., had established what a qualified outsider could do at a hide-bound Detroit automaker, Nardelli’s reputation was bruised by a tumultuous tenure at Home Depot and an enormous exit package granted to him when he was ousted.

The possible role of two other key executives is not yet known. Vice chairman James Press left a long career at Toyota to become Chrysler’s fixer in 2007. Press has a exemplary reputation in the auto business. Vice chairman Tom Lasorda, who was CEO when Cerberus bought Chrysler, stayed on despite being replaced, and has been a key negotiator with Fiat to get the alliance deal forged.

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Reader Comments

antonio311

April 17, 2009 5:54 PM

I have to admit that Nardelli did a pretty good job at Chrysler, for someone who is not a "Car Guy". He gained my respect, and I didn't have a good impression of him when he was chosen. I'd like to see Jim Press as the new CEO, he cares for Chrysler and he's a wonderful and smart "car guy".

m.r.

April 17, 2009 7:16 PM

not a moment too soon!
car companies should be run by people who can show positive results. Wagoner should have gone much earlier, too.
CEOs can hijac companies to the detrement of shareholders, employees and customers. call it 'corporate piracy'.
Feds should 'buy'into GM and Chrysler and intsall good management. later on, if profitable, its shares should be sold back to the public...and no one should be allowed to own more than 5% of shares! that might instill some corporate dilligence not found today.

bossman12345

April 17, 2009 7:27 PM

I have to say that is the best news I have heard thus far concerning the Fiat deal with Chrysler. It's a shame it took my beloved company near bankruptcy to get nardelli out.

Ollie166

April 17, 2009 8:08 PM

I wonder what Robert Nardelli exit package will be? better than home depot?

paulg

April 17, 2009 10:00 PM

I too have been impressed with Nardelli. He brought accountability to Chrysler, axed uncompetitive and unprofitable vehicles and did a great job communicating with employees. I actually will be sad if he goes. Too bad the genius in Wall Street imploded the entire global credit market. Also, he has gotten a bad rap for his sting at HD. He did what the founders asked him to do then he was looked at as the bad guy. HD had already peeked or else there would not have been a need to hire anyone to run it.

LLPOF

April 17, 2009 10:48 PM

Only in America can an idiot like Nardelli make a successful, lucrative career out of screwing up on the job time after time. I hope his next prospective employer has the wisdom to read between the lines when they review his resume. True, a long list of impressive jobs, but that says nothing about ability. The fact is, the only two things Bob is able to do well is sell himself into a new corner office and negotiate a fat severance package. A word of advice to investors... as soon as he surfaces as the new CEO of this or that company... SELL SELL SELL!

William

April 18, 2009 10:47 AM

Good riddance! How does this clown keep finding suckers? First he runs Home Depot morale into the ground and makes off with millions, and now Chrysler. Who's the next victim of this idiot?

sommerday

April 18, 2009 11:44 AM

Nardelli was made head of GE Medical division to cut & slash expenses. He was brought into Home Depot to also cut & slash (and capture that in his $250 million benefits over 5 years). Cerebus's message in hiring Nardelli was to also cut Chrysler's expenses (to make up for the added $200 million+ debt load of buying Chrysler). Nardelli has never organically grown a company he has directed. Let's hope there is a new CEO that knows how to organically grow Chrysler.

george

April 18, 2009 1:25 PM

probably will be the same old drill,nardelli will exit with a 15-22
million parachute,while production workers
that are already laid off,will be still
looking from where their next dollar is
coming from. shame on corporate america.

Luis B Aramburu

April 18, 2009 3:32 PM

I guess the important question to ask now is: which is the next company Nardelli will ruin? In spite of his catastrophic track record at Home Depot, he was hired by Chrysler. Now he has destroyed Chrysler. Who is going to hire him next? My advice: sell all stock you own in any company Nardelli lands. Jack Welch: thank you very much for not delivering GE to Nardelli. If you had done so, that company would probably be bankrupt and waiting for a merger with Fiat.

the rivet

April 19, 2009 11:14 AM

Union negotiations should be off the table. It is better for the company to die than for workers to have to live the rest of their lives knowing they knuckled down to eat crow and kissie suckie management.

John A.

April 19, 2009 12:17 PM

Toyota installed Jim Press to be their front guy. His job at Toyota was mostly ceremonial.

Layman

April 19, 2009 12:46 PM

I'm surprised Nardelli was a CEO for any company. The only adept thing he seems to do well is take a nice golden parachute. I'm sure he'll want for not after exiting Chrysler while at the same time not think twice about the misery he has caused countless families. Shame on you...

Bob Miller

April 19, 2009 2:17 PM

Nardelli was a bad choice from the start.

Mark

April 21, 2009 9:23 AM

The blame for Chryslers downfall should be placed at the feet of the Ubermanagers from Daimler. Nardelli was NOT involved in any of the new product decisions in the past five years. ALL of the inferior products were approved by the Germans. The current minivans are the poorest examples on the market. The previous two generations drove and looked better.
These came from the Tom Gale regime at Chrysler.

the new guy

April 22, 2009 8:05 AM

They should give him a high-five, a handshake, five bucks, and a lollipop. He never learned about loving his employees. Nardelli should have read Fullan. He got a $210 million dollar severance package from the last job. He's a waste.

james thurber

April 22, 2009 11:41 AM

Had the financial climate been different, I think Mr. Nardelli might have done substantial good at Chrysler. He made a determined effort to lean down and eliminate slow selling product. Contrary to current views, He did not focus on the UAW or any one particular area, but tried to work on all aspects of the company in cost cutting and product development. Blaming him for Chrysler's demise is both foolish and self serving. The real culprits here are Daimler AG, for its strip and flip policy, and the financial institutions who brought about the current financial meltdown, and are enjoying their ill deserved bailout money right now, while still trying to squeeze dollars from Chrysler that they have neither earned or deserve.

de quan

April 23, 2009 10:45 AM

The blame for Chryslers downfall should be placed at the feet of the Ubermanagers from Daimler. Nardelli was NOT involved in any of the new product decisions in the past five years. ALL of the inferior products were approved by the Germans. The current minivans are the poorest examples on the market. The previous two generations drove and looked better.
These came from the Tom Gale regime at Chrysler.
shuhaifc.com

Dave

April 25, 2009 10:54 AM

The problem with our U.S. automakers is their short term approach. Instead of focusing on the longterm health and vitality of the company they have focused on next quarter's Wall Street appearance. Executive pay should be based on company profitability in subsequent years performance, not last year's performance. Wayne Gretzsky's response when asked what made him a great hockey player was "others go to where the hockey puck is; I go to where the hockey puck is going to be" It is time to retain corporate leadership that willl take the company down the road to where company (market) will be, not where it is. This can only be accomplished with hard and proactive decisions by a board of directors that is willing to ride the reality of business fluctuations without abandoning the course or ship.

paul

April 29, 2009 1:57 PM

good riddins. He destroyed Home Depot. Hopefully he's out of there soon enough. LOSER!!!!!

Roy Timberlake

May 25, 2009 9:08 AM

How many know that Bob works for Hillary Clinton? Look for a major industry of US ownership. He is hired to destroy capitalism. Watch out if your company is taking care of you and your family. He will be there soon. That is his job. Just dig in inro the truth. Be careful.

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