US carmaker Chrysler said Monday it had appointed Robert Nardelli, the former head of home-improvement chain Home Depot, as its new chairman and chief executive, as it vies to turn around a sales decline.
The selection of Nardelli, who left Home Depot under a cloud related to complaints about his compensation, comes after German auto giant DaimlerChrysler on Friday completed a 7.4 billion-dollar sale of its US arm Chrysler to Cerberus, a large private equity firm.
“I'm looking forward to rolling up my sleeves and getting to work,” Nardelli told a news conference and hundreds of workers gathered on the lawn outside Chrysler headquarters in Auburn Hills, Michigan.
Nardelli predicted a “bright future” for Chrysler, after jumping out of one of the firm's new minivans to address reporters, but he takes the driver's seat as the storied US automaker faces a road beset with tough challenges.
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The carmaker saw its US sales fall eight percent in July as it was surpassed by Asian rival Honda for the first time.
Chrysler has slashed 6,000 jobs this year across its North American operations following job losses last year, and is vying to regain the profitability it enjoyed up until the second half of 2006.
July was also a bleak month for General Motors Corp. and Ford Motor Company, who together with Chrysler make up the so-called Detroit “Big Three” automakers.
The Big Three lost their grip over the US market for the first time last month as foreign automakers — including Toyota — captured more than half the sales in the US market.
Nardelli, who has no experience working in the auto industry, said his top priorities for Chrysler were a rapid execution of strategy, product safety and customer satisfaction.
Amid rock and roll, acrobats swinging across the Chrysler building's facade and fireworks exploding off its roof, he stressed that his compensation package was linked to Chrysler's ultimate success.
He said he was moving from his home in Atlanta, Georgia, to Detroit, Michigan, the US automotive capital, and boasted that he was already the proud owner of a PT Cruiser and a Jeep, both manufactured by Chrysler.
Nardelli said Tom LaSorda, whom he is replacing as CEO, will stay on as a vice chairman and president of Chrysler. LaSorda will still have a critical role in the firm and help oversee its talks with the United Auto Workers union, he said.
The union talks are likely to be key to Chrysler's financial future. The automaker is expected to obtain health-care concessions similar to those the UAW has agreed with GM and Ford in 2005.
John Challenger, of Challenger, Gray and Christmas, an employment consultancy, said: “Nardellis image, while tarnished, apparently was not considered toxic by Cerberus Capital Management, Chryslers new owners.”
Nardelli exited Home Depot in January with a 210-million-dollar severance payoff. He had been criticized by Home Depot shareholders for his enormous pay package at a time when the share price of the world's largest home-improvement chain had been depressed.
He declined to say what his pay and benefits package would be as Chrysler's new CEO, saying: “We are not going to discuss specifics.”
Other industry analysts said Chrysler might be able to flourish going forward under private ownership, partly as it will be able to focus on more long-term goals out of the Wall Street limelight, as it hopes to put its recent problems in the rear-view mirror.
Mike Tomlan, a Chrysler employee for more than 34 years, was optimistic Nardelli could turn the company around. “We've done it before and I don't see why we can't do it again.”
Chrysler also announced it was dusting off its old Pentastar corporate logo which first graced Chrysler vehicles in 1962.
The company also said it was launching a new advertising campaign, as it staged a rally for employees outside its headquarters in a bid to fire up morale.
Nardelli is not the only outsider to be called in to run a big US automaker. Ford recruited the former head of aerospace giant Boeing, Alan Mulally, as chief executive.
DaimlerChrysler, which has retained a 20 percent stake in Chrysler, is reverting its name to Daimler. Chrysler markets a range of vehicles including cars, jeeps and minivans.
