Five Questions For Bob Nardelli

Posted by: Helen Walters on November 5, 2008

nardelli.jpg Our crack Detroit team is reporting extensively on the goings-on in Michigan, as American auto manufacturers continue to struggle to survive. One of the biggest recent stories has been the swirling report of a GM/Chrysler merger. Next week, BusinessWeek executive editor John Byrne is heading to Palm Springs, to the Ernst & Young Strategic Growth Forum. He’ll be talking to Chrysler’s Chairman and CEO, Bob Nardelli. They’ll surely have a lot to talk about, but here’s your chance to add your own question. What would you like Nardelli to address? Just post your question here along with your name (as you’d like to be credited) and your location. We’ll pick five particularly pertinent questions for John to ask, and post the resulting video the following week.

Reader Comments

Stone Payton

November 5, 2008 3:37 PM

Can you really expect an organization as large and complex as Chrysler to innovate with the agility and speed necessary to meet today's (and tomorrow's) market demands?

Why?, How? . . . and would it be easier or more challenging to do so as "GM/Chrysler"?

Kim Nash

November 5, 2008 4:34 PM

Why hasn't information technology helped Chrysler be more competitive? You certainly spend a lot on IT.

hugh.fang

November 5, 2008 8:36 PM

My name is hugh.fang and I am from changan ford mazda automobile corporation of China PR.I would like to ask you a question on china auto market:how do you think of the development of new nature power in china mainland market?

BW.com Editor-in-Chief John A. Byrne

November 6, 2008 5:16 PM

Stone, Kim & Hugh, thanks for starting off with some great questions. Keep them coming!

Jonathan Lo

November 7, 2008 3:40 AM

Many people feel American automakers deserve to go by the wayside. Their chronic inability to control costs, especially with labor, poor automobile designs, and outrageous executive salaries are a mere fraction of the problems that plague this industry. While "American" car companies have been shedding jobs and closing plants, "foreign" car companies have been building plants and hiring workers in the USA.

Whenever I hear about a failing company lobbying the Government for money, I am reminded of the Government's poor handling of the S&L crisis, which can be summed up as, "Why should taxpayers throw good money after bad"? Americans will still have quality vehicles to drive, so what does it matter that they aren't Chrysler or GM?

Jonathan Lo
Hanover, New Hampshire
(feel free to cut down the statement for a more pithy question)

R Scandling

November 7, 2008 7:50 AM

Why feel sorry for the U.S. auto industry when the big Three kept making the gas hogs and wouldn't listen to the American public crying for more fuel efficient cars !

Thats why so many Americans are driving the more fuel efficient foreign cars today !

Why should the Taxpayers bailout these stupid executives because of there poor decisions !!

I one time worked in the auto industry but I still drive an american auto because of a sense of loyalty to the USA.

Jazz4

November 7, 2008 8:13 AM

How can an ex-executive of Home Depot be expected to turn around an automobile company? Do you have any engineering credentials? Do you share a passion for automobiles?

David Damore

November 7, 2008 10:08 AM

Q1: What book(s) are you reading right now?

These are certainly very challenging times in the auto industry.

Q2: How do you deal/cope with stress?

Phil Stott

November 7, 2008 1:14 PM

Isn't a bailout simply a failure in Detroit to accept the ugly side of the free market after years of enjoying the upside of it?

jay

November 7, 2008 1:41 PM

Chrysler would be better off if he is let go.

What he can do in the interim?

Bring small and very fuel efficient cars and cars which have good sleek design which customers can fall in love with just by the visual appeal.

Cut your top heavy management by 50% to save astronomical costs.

Get rid of all the unions and the gutting of all pensions to 50% of what they should be, that is the only hope for their survival.

Rob Coventry

November 7, 2008 3:47 PM

I have a simple question. How will you take the bailout money and create differentiating new value for the American Auto Industry? Given recent gas prices and the corollary slump in your industry perhaps the answer is obvious but how do you leapfrog the competition and put the American Auto Industry ahead of Japan once and for all?

Stephen Griffith

November 7, 2008 9:58 PM

How much did the quarter to quarter short term pressure for earnings deflect attention from the need to forego short term profits from large cars and trucks to build a long term beachhead in small, fuel efficient vehicles? Surely in an age of globalization, auto executives should have been able to see that our fuel prices were excessively low and unsustainable in the long term.

Kyle Cheriton

November 8, 2008 4:33 PM

Bob,

It seems to me that US automakers are still trying to be all things to all people. How about creating one vision (for at least one brand) that addresses what the US and the world really needs?

For example, "Chrysler builds environmentally-friendly small and medium-sized automobiles of high-energy efficiency that provide a highly engaging user experience."

Let the other companies build vehicles to niche markets and fickle segments. Your company will lead the market in creating transportation that people should be driving.

Your thoughts?

Mike Reardon

November 8, 2008 5:31 PM

Could Chrysler sign on to an AirBus model for designing the renewable technology going into American cars. Would open best alternative green practices that had Government economic support as desirable be achievable over the next four years.

Lee Smith

November 9, 2008 9:12 AM

No bailout. Several years ago, the U.S. auto makers desperately fought pending legislation to increase fuel efficiency of vehicles. How can the Government provide money to an industry that: 1) Employed lobbyist to quash a law beneficial to Americans on the economic and National Security dimensions, and 2) Does not have the foresight to understand nor plan for shifting trends?

U.S. automakers have proven they are unable to manage their business. The failure of some U.S. automakers not systemic and is probably long overdue. Evolution of the fittest, not the fattest.

After all, isn’t this why Lehman was allowed to fail? Lehman refused for months to take loans at the Fed’s Discount Window. This was so stupid the Fed decided to let Lehman perish. Let the U.S. automakers meet the same fate.

No More bailouts

November 9, 2008 10:25 AM

It is time to stop spending tax payers money on industry ill-prepared for the current conditions.

Why help Chrysler? Which states will benefit by saving them? PLUS, which states will benefit if it is allowed to finally be put out of its misery? (Hint, Tn, Ky, NC, SC, Ga, Al, Ohio, etc.)

Why not just buyout the remaining workers with a severance package, and let the company finally be shut down?

randall ferguson

November 9, 2008 1:12 PM

Bob Nardelli, isn't he the guy that gutted home depot and walked away with millions?...thought so. what a neanderthal...

randall ferguson

November 9, 2008 1:16 PM

one more note, I didnt renew my hard copy subscription when business week started publishing "advice" from Jack Welch, and if you start accommodating Nardelli I will walk away from Business Week Online. FYI. regards

scrappy1

November 10, 2008 4:53 AM

Jonathan Lo can ---w me! What a thing to say. Don't take any notice of these boorish, typical working class uneducated Nazi remarks!! We need GM and I sure as hell don't want to live in a world where I have no choice but to drive a German, Japanese, Korean or Chinese product. Look at how those foreign governments have helped (especially Japan's MITI et al) their auto businesses prosper in other markets. I love America too much and would hate to see a loss of GM, Ford or Chrysler. Let's help them!! It's not all their fault Jonathan Blo- me!

ethics

November 10, 2008 8:18 AM

Why give money to a man who screwed Home Depot, is hated by workers and who grossly overpays just himself and has no credibility a single dime. Just look at what he did to the customers, employees and stock holders of Home Depot. All suffered under him. Ask him why he should be trusted with such a bad record and don't let him just pick out a few metrics he made while all others suffered.

Productive Conversation

November 10, 2008 10:33 AM

1) Given that Chrysler was the poor performing half of the Daimler / Chrysler and has since been unable to develop product that American consumers demand what improvements or benefits does Chrysler offer GM?

2) How would the consumer benefit from a combined GM / Chrysler brand given that neither has a recent track record for creating products that are best of breed in any market segment?

3) With Nardelli’s prior performance record at the Home Depot and his divisive leadership style, who will lead the merged company?

4) How can we be assured that Mr. Nardelli creates a win-win situation for a GM/Chrysler, subcontractors, and most of all consumers?

5) How will product development & and time to market cycles be improved with a merged company (be specific.)

Andy

November 10, 2008 10:44 AM

Why would you bail out companies and execs that have only demonstrated - over a long period- that they just cannot compete???
Can the money printing presses keep up cranking out even more dollar notes on top of the credit disaster bail-outs?
Why wail about so-called government subsidies in the EU and Japan if you are doing exactly the same (don't forget Boeing and the whole aircraft industry)?
If Bush had spent the money wasted on Iraq on stimulating innovationa and productivity in the USA, and if he hadný given free reign to the robber barons, the USA wouldn't in the trouble it is in now.

Joe

November 10, 2008 10:52 AM

What are your plans for implementing Six Sigma at Chrysler?

(GE has largely abandoned it despite all the hoopla surrounding it.)

Peddi Kanumuri

November 10, 2008 10:54 AM

Does Chrysler has any idea on what a Car Customer wants from time to time?

TC

November 10, 2008 12:31 PM

Sticking simply to business issues only:

1. How do you plan to reconcile the need to make long-term structural changes that would be necessary to turnaround an independent Chrysler with Cerberus' clear intent to "wheel and deal" Chrysler to another company ASAP (GM,Nissan/Renault, etc.)? Or is turning around an "operationally bankrupt" (your words not mine) Chrysler just window dressing to get a deal done?

2. Considering that Chrysler will need a motivated workforce to successfully execute a turnaround, how do you plan to address the withering impact to employee morale that is caused by Cerberus' continued efforts to "wheel and deal" as mentioned in question #1 above?

Daniel

November 10, 2008 12:49 PM

This merger reminds me of a comment made when Delta and Northwest started theirs; "Two drunks holding each other up is never a good idea". I would like to know how Mr. Nardelli expects to use the bailout money to really spur innovation and become, once again, a preeminent auto manufacturer and dispel the aforementioned notion.

MS

November 10, 2008 2:41 PM

Question(s):
Bob, 1) what's your strategy for building truly great cars (in the spirit of Walter Chrysler), meeting customer demand and expectations, differentiating brands, meeting and exceeding environmental requirements, and 2) how on earth have any of the above got anything to do with a possible merger with GM?
M Shears, MA

gary

November 10, 2008 2:46 PM

You sank Home Depot, is this your plan for Chrysler also ?

clarence lancer

November 10, 2008 3:53 PM

chryco had some interesting designs over the last 15 years. that said, the real problem that i see existing at detroit and america is too many beancounters and too few engineers. we are focused on smoke and mirrors not real value-added products that americans want. look at any american car and you will find inept execution (ie 4-speed automatic when the market demands 5 or 6 speed automatics, cheesy interiors that appear as an after-thought, booking as income every unit that rolls off the assembly line instead of booking revenue when it is realized at sale time, focusing exclusively on vehicles that yielded high per unit gross margins, fixing vehicle problems at the dealership instead of on the assembly line, ignoring market share declines, etc). we need detroit to survive and thrive, but they need to build an engineering mentality back into their respective companies' culture that rewards engineering innovation. heretofore they have been more interested in financial balnce sheet tricks and 0% financing than offering real products that americans want to buy over and over again. i own two hondas (07 fit & a 97 civic) and a 97 chevy z71 truck. both hondas have had zero unscheduled maintenance costs. the chevy, i am sad to say, has had a major hit it every year (this year it is an ac compressor which my mechanic says is a cheap press-fit design). wake up detroit i want to buy american, please start engineering quality inexpensive vehicles and i will come back. we need a 21st century detroit, not a detroit that has more in common with a morgan-stanley "synthetic cdo" than it does with basic high quality transportation.

Ray

November 10, 2008 4:30 PM

I personally think the company should completely revamp its business model. I think if the company realigned to focus more on high-end and innovative products it could do well. They appear to have the technology and ingenuity at your disposal, but have a difficult time putting good ideas in production (and on mass scale to make a profit). Cost model precludes pull-oriented mass production of mediocre ideas. So why not scale down and focus on next generation? Why not get out of the market segments where you're clearly not competitive and focus on next generation? That may mean scapping 80% of your product, but use capacity to refocus your competencies and what you do well?

Matt

November 10, 2008 4:51 PM

What is the strategy for product differentiation? Currently, the Dodge, Jeep and Chrysler brands all suffer from poor product quality perception(Actual quality may differ), how do you plan to overcome this? I have been able to be in quite a few Chrysler rental vehicles and everytime I have walked away knowing I would not purchase that particular vehicle. I have not had the same experience with other domestic brands.

Mike

November 10, 2008 6:43 PM

What have you learned from your failures at Home Depot that can be used to create success for Chrysler?

What are the key differentiators for Chrysler that makes it important to us? not just the jobs and prestige story...

What is your vision for Chrysler as a company - products as well as for the company? not just reduce costs, improve quality, better mileage, etc.

Ron Dwyer

November 10, 2008 7:59 PM

One would have to say that any commentary on Chrysler would have to be a commentary on the domestic auto industry as a whole. The biggest question I have for Mr. Nardelli is part observation and part question. Detroit (and I grew up there BTW) has consistently failed in every market endeavor that they did not originate. Granted, they succeeded wildly in trucks, but the conventional wisdom was they repackaged a gas guzzler and got the government to let them sell essentially a passenger car while calling it a light truck. Come on guys, trucks are for contractors. The question here is this: Since it is a known fact that the US is the worlds largest consumer of petroleum and the whole market has been building vehicles that foster unsustainable levels of consumption for years. How do you feel now that the day of reckoning has finally arrived and your industry does not have a viable product line to stave off the imports?

GM & Ford build perfectly good cars for other markets but they claim won't sell here. Odd, most people drive foreign built cars already.

Dennis from Wisconsin

November 10, 2008 11:59 PM

For 30 years I have been hearing about how the US auto industry cannot compete with it's foreign rivals. Cost structures involving health care, pensions, and wages incurred from deals made with the UAW years ago. These costs add up to more than $30.00 per hour more than Asian automakers pay for labor. Combine that with excessive executive comp packages, and a history of the "good enough" American auto industry attitude, it's no wonder why the consumer views US cars as sub-par. Most consumers don't give a damn about the UAW, or the survival of an American icon. They just want a well engineered, quality built, fuel efficent automobile at a fair value without having to jump through hoops such as $5000.00 rebates.

The way I see it, GM, Chrysler, and Ford will never compete with their Asian rivals. Their cost disadvantage will never-ever allow it. File bankrupcy and dump the worker's pensions on the US taxpayer. This may cost far less than an all-out rescue package and not prolong the inevitable. Cut your losses now! Some corporate bottom fisher will resurrect the brands from the ashes, (if they are worth saving) and rebuild them using a more competitive cost structure. Only then will the World want American automobiles. A wise man once said, "You can lead, follow, or get the hell out of the way!"

munidas pereira M.B.A (McGill)

November 11, 2008 7:10 AM

Independant sources such as consumer reports put the quality/reliability of the US automakers below that of their Japanese competitors and is a major driver in losing market share to the Japanese. This is something that is clearly management incompetence and cannot be blamed on high oil prices. Why has there not been a fix to this problem ? (there are other advantages to improved reliability such as reduced warranty cost, reduced depreciation increasing customer satisfaction etc:)

MacGuffin

November 11, 2008 12:19 PM

My Five Questions For Bob Nardelli:

1.) If Chrysler is really in trouble (and it is) why in the heck are you hanging out in Palm Springs at the Ernst & Young Strategic Growth Forum? Shouldn't you be hunkered down, trying to save Chrysler???

2.) If the U.S. taxpayers are going to bail-out Detroit, what are you going to do differently? Shouldn't this money be spent on a massive re-training and relocation effort for the displaced workers?

3.) For 30 years Detroit has been completely out-of-touch, losing an entire generation of buyers. What makes you think the weakest of the Big 3 can really turn it around?

4.) What are you going to do to address the too many dealers, too many models problem? You are completely over-dealered, so how do you accelerate the process in a rather dramatic fashion?

5.) Why wasn't Wolfgang Bernhard brought in to run Chrysler instead of Jim Press? This was the first big mistake that Cerberus made. Not bringing in a strong President who had previous working knowledge of Chrysler operations and was the right kind of change agent, instead of Jim Press who is an incrementalist.

Jeff

November 11, 2008 2:31 PM

What about my warranty on my 07 Hummer?

R Lemley

November 11, 2008 2:48 PM

I'm with Jonathan Lo.
I'm DISGUSTED with American automakers...they came out of the 70s, saw Honda kick a$$ with the civic and kept going for the easy money stateside. Honda and Toyota cont'd to innovate and get energy-wise while Ford/Chev/GM quality control seemed a non-priority. I've replaced transmissions in all my American cars before they ever hit 70k miles. Tried to "Buy American" but American Automakers have let me down for decades. They deserve to go bankrupt. Pity for loss of jobs, but bailing them out for bad business decisions just isn't right.

B. BIDDLE

November 12, 2008 10:39 AM

AFTER YEARS OF CAVING IN TO THE UNION BOSSES THE AUTO COMPANIES ARE NOW PAYING THE PRICE. HOW CAN A BAIL OUT HELP WHEN IT WILL NOT CANCEL THE LUCRATIVE UNION CONTRACTS AND INCREASE REVENUE? WHAT THE TAXPAYERS ARE GETTING IS A UNION BAILOUT. WHAT WILL HAPPEN NEXT YEAR? MORE OF THE SAME.

R.Allen

November 12, 2008 4:51 PM

Mr. Nardelli - You were trained in one of the most agressive enterprises on the planet (GE). How fast can you flip Chrysler's current platforms to smaller more energy efficient platforms ?

D. King

November 13, 2008 10:58 AM

The GM/Chrysler Merger is brilliant! Let's take a massive, failing company that is doing poorly because of operational issues and an inability to build products people want. Then merge that with a massive, failing company that is doing poorly because of operational issues and an inability to build products people want. This will solve everything, because a more massive, failing company that does poorly because of operational issues and an inability to build products people want just can't fail, there's now way!

William

November 17, 2008 8:10 PM

85% of this problem can be described in one word.


UNION

Helen Walters

November 17, 2008 8:13 PM

Thanks, all, for your great questions (or comments, in some cases.) John filmed his interview with Mr Nardelli. I'll post the link here (in a new blog post at too) as soon as it's ready. Thanks again. Helen

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