Cerebrus Capital Management, which recently completed its buyout of Chrysler from Daimler, grabbed headlines by naming former Home Depot CEO and GE VP Bob Nardelli as its CEO. It is unusual for an auto manufacturer to go outside the industry for its top leader. It’s even more noteworthy that Cerebrus tapped the polarizing Nardelli as its leader. While at Home Depot he led the company to impressive earnings results, but the stock price languished and he alienated shareholders and employees alike with his management style. Customer service declined markedly during Nardelli’s tenure as many consumers preferred the atmosphere and service offered by rival Lowe’s. Link
Bob Nardelli might be a good fit for Chryler in terms of strong management of costs and production issues. But controlling costs doesn’t sell cars, style and reliability sell cars! Chrysler has had success in recent years with the PT Cruiser and the Chrylser 300, but it does not have the market presence that Toyota, Honda, Nissan, or even the other US auto brands have. If Chrysler can define a relevant point of difference to consumers, it may have a chance to succeed provided the company backs up its position. A recent move to offer lifetime warranty on powertrains is perhaps one way Chryler can set itself apart, especially from its domestic competitors. Without a relevant position, the brand is likely to remain in neutral.
