Updated: Nardelli to Run Chrysler

I was completely stunned by the WSJ headline this morning that announced Bob Nardelli, formerly of GE and Home Depot, is going to be CEO at Chrysler. Many of the actual industry experts were stunned too, so don’t feel too bad if you’re in the stunned crowd, like me.

I’ve written about his management misadventures before, see the links below.

From the WSJ:

  • Cerberus, the private equity firm that runs Chrysler, is full of ex-GE people. That must explain how Bob gets another shot here.
  • The WSJ says “lean management” is a Six Sigma tool (ugh).

Nardelli was famous for, among other things, his $210m severance package. Why work, ever again? I guess a little ego goes a long way.

Good luck to the folks at Chrysler. Remember the quote from January criticizing Nardelli was “you can’t sh** on your employees.” He also sh** on the investors, but he doesn’t have to deal with public stockholders at Chrysler, so maybe this is perfect for Bob.

Tom LaSorda, featured here for his support of Lean, will be Nardelli’s #2.

Google News link for free articles.

Updated with additional articles:

For what it’s worth, CNBC’s Jim Cramer thinks Cerberus is “out of touch” and there couldn’t have been a worse pick than Nardelli. “Couldn’t they get someone better? Maybe they couldn’t…”

The NY Times says he’s no longer “tainted.” Really?

USA Today has an unflattering article that calls him an “imperial CEO” and had a funny quote from Lee Iacocca that implied it was a bad choice in his eyes.

Former Chrysler CEO Lee Iacocca, watching the saga from retirement in California, said, “I’m shocked, and I’m going for a walk on the beach,” according to his spokeswoman, Norma Saken. “He’s as stunned as anybody.”

Another quote:

Ken Siegel, an organizational psychologist who tracked Nardelli’s path at Home Depot, called the choice “unfathomable,” “stupefying” and “a supreme statement of arrogance” by Cerberus.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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5 Comments on "Updated: Nardelli to Run Chrysler"

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  1. Seb says:

    Hi Mark,

    just to clarify. I read on wikipedia that they just made Tom LaSorda Chairman and President.

    Wouldn’t that make him Bob’s boss (of sorts as he chairs the board that hires and fires the CEO), rather than his #2?

    At any rate, with Tom LaSorda seeming to have a good grasp on how to cut costs the right way (also see this link on this), what I am really interested in is seeing what that combination of Bob “I am the OneAnd Only” Nardelli and Tom LaSorda will do to Crysler.

    BTW, I didn’t follow Crysler, but given that Daimler just sold them to Cerberus (what a name), Tom couldn’t have been too successfull with his Lean efforts as CEO, or am I wrong here?

    All the best,
    Seb

  2. Mark Graban says:

    You can’t always trust Wikipedia, particularly on breaking news. LaSorda is clearly the #2 in the news articles and he was named “vice chairman.”

    The name of the firm Cerberus comes from tales referring to “the hound of Hades, a monstrous three-headed dog.” Nice indeed.

  3. mike says:

    Interesting that in the Autos Insider section of the Detroit News online edition yesterday readers could follow along with all the Chrysler-Daimler-Cerberus soap opera and “we’re going to do great things, blah, blah, blah.” Then down toward the bottom there was a small item that simply said “Toyota makes record profits–again.” Everything else is just “sturm und drang.”

  4. Karthik Chandramouli says:

    A recent study was published on the impact of Narcissistic CEOs and I think it’s a great case study in what Chrysler is about to experience under Nardelli (a textbook narcissist in my humble, non-medical opinion).

    A summary of the study can be found here

    Bottom line — CEOs who make it all about themselves inevitably fail because they set themselves apart from the rest of the company — the people who get things done and make execution a reality.

    Perhaps Nardelli has learned a lesson from his failures at Home Depot, but I can’t imagine that someone so tightly wound up and consumed by proving Jack Welch made the wrong decision can be introspective enough to course-correct.

    Hopefully Cerberus can afford a good executive coach who can help Nardelli to steer clear of the ditch.

    But more importantly, it’s NOT about the CEO. It’s the product, stupid. And the quality. And the cost. So Nardelli has a much bigger problem than fighting Lowe’s and Wal-Mart.

    Nardelli’s prior experience does not include a challenge of this magnitude.

    Arguably, working at a company like GE is somewhat insulating because they are a self-professed leader in the markets and customers they serve, or they get out of the business.

    Sort of a self-fulfilling prophecy… You’re only good at what you try to be good at. Has GE ever stayed the course and made a poorly-performing business into a highly-performing one, or do they cut bait before it gets interesting?

    Six Sigma ain’t gonna cut it against the likes of Toyota and Honda. And the GM Production System has yielded some very competitive plants in terms of productivity and initial quality. Ford’s new CEO is a true believer in the power of Lean and I’m confident they will make it a priority.

    Here’s my prediction — Nardelli will gravitate towards fixing underperforming dealers and hire some ex-Marines to whip them into shape, like he did with Home Depot. He will squirrel away all his energy and goodwill trying to fight impossibly restrictive state franchise laws, only to find out that his core operational performance is still lacking.

    By then, Wolfgang Bernhard will be brought in from the wings to salvage what’s left…

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