Jack Welch: 'Cerberus Hit a Home Run'

(page 2 of 2)

Fixer Upper

As does Langone. "If right now I was a Chrysler investor, I'd be very happy," he said, crediting Nardelli with rescuing Home Depot from its failed South American excursion, stabilizing the business, and raising profits, even if the stock price was lackluster. Langone admires his work ethic, detail-oriented philosophy, and his knack for deciphering costs and benefits as traits that will serve him well at the struggling automaker. "He's probably the best operating executive I've ever known," he added.

Driven by a housing and home improvement boom, Home Depot's sales soared from $46 billion in 2000, the year Nardelli took over, to $81.5 billion in 2005, an average annual growth rate of 12%. Profits more than doubled, to $5.8 billion.

Critics say that Nardelli's military-style management alienated longtime employees, took the company's focus off the retail stores, and they now snipe that he is responsible for the hardware retailer's current problems. Same-store sales in Home Depot's core retail business are way off this year.

"Bob went into a place that needed fixing and he fixed it up," Welch says. "He doubled revenue. Some of the old-timers didn't like him because they ran a seat-of-the-pants operation."

The Bottom Line

Welch says Nardelli will bring cost-discipline and efficiency to Chrysler. The company needs it. Despite improvements over the past five years at its factories, Chrysler still ranks near the bottom among big carmakers in factory productivity studies and has, at best, mediocre quality results. "He will make Chrysler more efficient than they have ever been," Welch says. "He will know where every penny is going in and out by the hour."

Even Welch admits that Nardelli has a tough job ahead of him. At GE, he succeeded in operations that were mostly business-to-business sales. And at Home Depot, Nardelli left a fix-it job for new management.

Can Nardelli master the black art of getting in touch with car buyers and reverse Chrysler's slide? "That's what we'll have to find out," Welch says. "It's one of the hardest jobs in the world. He will have the intensity. He will have a great Cerberus team helping him."

So why would Nardelli take on such a daunting task? Langone believes he likes the challenge—and the payday. "He's a capitalist," Langone said. "If he gets it done, he'll make a lot of money."

Welch is BusinessWeek's Detroit bureau chief.

With additional reporting by Ben Levisohn in New York