The early reviews of Chrysler's new model chief executive are in: Good acceleration and inexpensive, at least at first, but lacks fit and finish. Some analysts see Chrysler's hiring of Bob Nardelli as chief as a smart move, bringing in an energetic executive who could bring a much-needed outside perspective to the newly independent automaker.
Others wonder if Nardelli's lack of industry experience and infamously aggressive management style will make it difficult for him to build consensus for the deep changes that need to be made at Chrysler.
Either way, he certainly comes cheap: Assailed for his super-size compensation when he headed Home Depot, where he averaged $25.7 million (€18.6 million) a year, and his $210 million severance package, Nardelli won't be paid unless he turns Chrysler around.
And if he does? The company isn't saying. James Owers, a professor of finance at Georgia State University, said the no-payment-for-now pledge could engender "a certain scepticism, because this is now a private company and they have to tell nobody anything."
About all that was clear earlier this week was that Chrysler's new owners reached the same conclusion as the board of Ford when it hired a former aerospace executive at chief executive last year: Detroit could use some outside assistance.
"The message here is that investors in both cases are saying 'cars are important, product is important, but money is important, too'," said Karl Brauer, editor in chief at online auto site Edmunds.com. "They're saying 'We need people with business skills to come in and straighten out the mess these companies have gotten themselves into'."
At a news conference, Nardelli said he was committed to continuing the restructuring plan launched by his predecessor, Thomas LaSorda, which includes cutting excess production capacity, improving product quality and expanding in emerging markets.
"It's not about creating a new strategy," Nardelli said. "They've got it. We're going to have laser-like focus on executing that strategy. What I bring is a fresh set of eyes, a new perspective if you will."
Although he never has worked in the automotive industry, Nardelli stressed that he "spent most of my working life in transportation and manufacturing", and called them businesses "that I know, I like and I grew up in".
Nardelli said he has met United Auto Workers leaders to reassure them that LaSorda, who is staying on as president and vice-chairman, will remain in day-to-day control of negotiations on a four-year contract.
For his part, LaSorda said he was on board with the decision by Chrysler's new owner, private equity firm Cerberus Capital Management, to put the former Home Deport executive in charge. "I'm part of this team," LaSorda said. "Leave the egos at the door and let's go turn this company around."
Chrysler, which is based in Michigan, and also builds the Dodge and Jeep lines, lost $618 million in 2006. All three US automakers have been losing market share to Asian rivals as American buyers have turned away from the gas-hungry pickup trucks and SUVs. Restructuring plans include shedding 13,000 jobs in the US and Canada by 2009.
Nardelli (59) resigned from Home Depot in January. He was credited with doubling sales after taking over as in 2000, but the stock price lagged during his last two years at the helm, while his pay soared. He was criticised for an "in your face" management style that often alienated both employees and fellow executives.
Some of his strategic moves at Home Depot have been questioned. For instance, to cut costs, Home Depot "went from having knowledgeable employees in the store to less-expensive employees who might not know a hammer from a saw", said Prof Owers.
Chrysler needs to forge joint ventures with other car companies to expand in overseas markets and to gain a foothold in the growing market for hybrids and alternative fuel vehicles.
