All the squawking over Bob Nardelli's taking the CEO role at Chrysler is interesting to me. I had heard some conversations in passing during the week, but when a caller on a television show last night angrily brought up Nardelli's new job, it occurred to me that Bob Nardelli's background is a pretty darn good fit for Chrysler.
Yes, he treated shareholders miserably at Home Depot (NYSE:HD), and yes, his contract was an abomination. But let's not forget that Home Depot's board agreed to that contract as well, and shareholders should be just as frustrated at how they were represented.
Let's also not forget that Home Depot is retail, and retail is not Nardelli's background. Nardelli's background, as many readers surely know, includes about 30 years at General Electric (NYSE:GE), leading businesses where manufacturing is at the heart of operations. He knows cost-cutting -- all GE managers do -- and understands how to drive cash flow. He also has experience working with unions. To me, that sounds like there's a good chance he's the right guy at the right time for Chrysler.
I'm not saying he's a nice guy. He certainly wasn't to Home Depot shareholders, but Chrysler is private at the moment, so handling shareholders is not a concern. Oh, and did I mention he's shown he can cut costs and push through change?
It's not like Honda (NYSE:HMC) or Hyundai give a rat's behind about whether Chrysler survives. So Nardelli's job won't be easy, and he won't necessarily succeed, but he will give the company a fighting chance at not only surviving, but putting a lean cost structure in place. That's what Chrysler needs more than anything.
Home Depot is a Motley Fool Inside Value selection.
Nathan Parmelee worked at General Electric too once upon a time, but didn't fully develop his cost-cutting chops. He does not own shares in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.
