Nardelli gets a second chance - to kill a company
I just read the article at Business Week detailing the appointment of Nardelli as the new CEO of Chrysler under Cerberus. Cerberus, for those that didn't know, is the private equity firm that recently took Chrysler off the hands of Daimler Chrysler, for next to nothing.
What can I say about Robert Nardelli! His colorful exit from HomeDepot, a firm where I have some minimal stock interest (note: in my case minimal means, quite literally, < 100 shares), along with a package of USD 210 million caused many a HD employee and fan a great deal of heartburn. His inability to connect with the employees, as well as the shareholders make him a poster child for the reasons why he should not have been made a CEO. At the very least a good CEO needs to be liked by his employees - or at least admired. Nardelli failed miserably on all those fronts.
Ad now, the poor employees of Chrysler get him. No matter what, Nardelli is going to deliver financial results to his new bosses at Cerberus. And, no matter what, he will receive a fat financial package. Nardelli knows that this is the only chance he will get to redeem himself. Maybe he has taken charm lessons from someone. Maybe he will be better off, now that he has no anonymous shareholders to please.
As you might have guessed by now, I am no fan of Nardelli. Nor am I a fan of six-sigma in areas where it is NOT APPLICABLE. Nor am I a fan of Welchian 'grading employees on a curve', guaranteeing that at least one person from a group will be fired evey year. GE may have done well during Welch's reign. However, his lack of focus on products - which is what drives companies forward - has left GE trailing in the post-Welch years.
Aggressive cost-cutting, massive lay offs, pruning of suppliers and putting them through the wringer - all will produce short-term benefits, which Cerberus will love. If they do enough to put lipstick on the Chrysler pig, and take it public, they may even fool the public into believing this story. Ultimately, unless Chrysler is able to produce cars that rival Toyota (they shouldn't really look at GM or Ford as competitors) in quality, they will not be able to build the reputation that Toyota has. And until they build that reputation - which will take anything from 5-10 years - they cannot afford a stumble.
It will have to be a slow rise. I don't think Cerberus or Nardelli have the stomach for it. Be prepared for the demise of Chrysler
I just read the article at Business Week detailing the appointment of Nardelli as the new CEO of Chrysler under Cerberus. Cerberus, for those that didn't know, is the private equity firm that recently took Chrysler off the hands of Daimler Chrysler, for next to nothing.
What can I say about Robert Nardelli! His colorful exit from HomeDepot, a firm where I have some minimal stock interest (note: in my case minimal means, quite literally, < 100 shares), along with a package of USD 210 million caused many a HD employee and fan a great deal of heartburn. His inability to connect with the employees, as well as the shareholders make him a poster child for the reasons why he should not have been made a CEO. At the very least a good CEO needs to be liked by his employees - or at least admired. Nardelli failed miserably on all those fronts.
Ad now, the poor employees of Chrysler get him. No matter what, Nardelli is going to deliver financial results to his new bosses at Cerberus. And, no matter what, he will receive a fat financial package. Nardelli knows that this is the only chance he will get to redeem himself. Maybe he has taken charm lessons from someone. Maybe he will be better off, now that he has no anonymous shareholders to please.
As you might have guessed by now, I am no fan of Nardelli. Nor am I a fan of six-sigma in areas where it is NOT APPLICABLE. Nor am I a fan of Welchian 'grading employees on a curve', guaranteeing that at least one person from a group will be fired evey year. GE may have done well during Welch's reign. However, his lack of focus on products - which is what drives companies forward - has left GE trailing in the post-Welch years.
Aggressive cost-cutting, massive lay offs, pruning of suppliers and putting them through the wringer - all will produce short-term benefits, which Cerberus will love. If they do enough to put lipstick on the Chrysler pig, and take it public, they may even fool the public into believing this story. Ultimately, unless Chrysler is able to produce cars that rival Toyota (they shouldn't really look at GM or Ford as competitors) in quality, they will not be able to build the reputation that Toyota has. And until they build that reputation - which will take anything from 5-10 years - they cannot afford a stumble.
It will have to be a slow rise. I don't think Cerberus or Nardelli have the stomach for it. Be prepared for the demise of Chrysler
Labels: auto industry, Cerberus, Chrysler, Detroit, Nardelli, private equity
posted by Indian© at 8:59 AM
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