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Good Bye to Bob Nardelli at Chrysler

Considering the enormous challenges he faced, internally and externally, Nardelli actually did a pretty good job as CEO.

by on Jun.16, 2009

Then Chrysler Chairman and CEO Bob Nardelli shares details of the company's viability and accountability plan with senior management.

Then Chrysler Chairman and CEO Bob Nardelli explains details of the company's viability and accountability plan with senior management.

With the new Chrysler Group LLC on the road, the company’s old chairman and chief executive is officially out of job. He said he was heading back to wait in the bullpen at Cerberus Capital Management for another call. It might be a long wait, since Cerberus’ appetite for risk has probably diminished since taking on Chrysler. In fact some observers question whether private equity firms will ever be as prominent as they once were before the financial meltdown.

However, to judge Nardelli fairly, you have to separate what he did in Auburn Hills from the speculative failure of Cerberus, which ultimately saw it donating its share of Chrysler LLC to the government to escape what was a bad, leveraged bet.

Considering the challenges he faced, Nardelli actually did a pretty good job.

In fact, Nardelli’s tenure was marked by an enormous amount of stress right from the start as Daimler AG cut its ties and fled back to Germany where the competition was far less intense and the government far more supportive and protective of companies in the industrial sector.

Moreover, not only had Daimler’s European executives failed at turning around the company’s fading fortunes, but so had the American management team that had tried to run the company immediately after 1998′s merger with the German automaker. (more…)

New Kidder On the Hemi-Head Block, as Chrysler Names C. Robert Kidder Chairman

Troubled maker the latest to reach outside automotive circles.

by on May.20, 2009

Following in Ford's footsteps, Chrysler will name an automotive outsider to replace Chairman Bob Nardelli.  C. Robert Cooper was former chief at Borden Chemicals and Duracell International.

Following in Ford's footsteps, Chrysler will name an automotive outsider to replace Chairman Bob Nardelli. C. Robert Kidder was former chief at Borden Chemicals and Duracell International.

Troubled Chrysler is set to become the latest Detroit maker to reach outside traditional automotive circles for its next senior executive. With Chairman Bob Nardelli set to step down, if or more likely when Chrysler emerges Chapter 11 bankruptcy protection next month, the carmaker plans to appoint C. Robert Kidder to replace him. 

Kidder, the former head of Borden Chemical and Duracell International, will take on a streamlined operation that will have the U.S. government, the United Autoworkers Union and Fiat SpA as its largest shareholders. But the structure proposed for Chrysler, post-bankruptcy, would give the controlling hand to Fiat, which will start with a 20% stake and, if all goes according to plan, rise to 35%, and then controlling interest longer-term. 

“With his broad expertise serving on numerous world-class boards and his accomplished business background, Bob will provide the leadership and strategic counsel that will help to create a strong global competitor moving forward,” Nardelli said about his successor, in a prepared release. 

Capping his four-decade career, Kidder currently serves as, among other things, lead director for the financial services company Morgan Stanley.

“I am confident that Chrysler will emerge from Chapter 11 a lean and powerful competitor, combining its own rich history of innovation with Fiat’s technology and expertise to invigorate the American car market and to challenge other car companies around the globe,” said Kidder. (more…)

Help Wanted, $1 A Year

Can Chrysler attract high-priced talent on a strict budget?

by on May.05, 2009

Can you believe they paid me this much to LEAVE Home Depot?  And now, outgoing Chairman Bob Nardelli is earning just $1 a year.

Can you believe they paid me this much to LEAVE Home Depot? And now, outgoing Chairman Bob Nardelli is earning just $1 a year.

Help Wanted: Brilliant, visionary, experienced leader willing to put in countless 24/7 days resuscitating bankrupt manufacturer.  Must be thick-skinned, cool under constant fire and already financially independent.  Willingness to work for $1 a year a definite plus.  Please call Tim Geithner at the U.S. Treasury Dept. for more details.

While you might not see that ad in your local classifieds, it pretty much fits the basic guidelines of what Chrysler will likely be looking for, if and when it emerges from Chapter 11 reorganization.

The automaker’s current CEO is already working for that miniscule amount, Bob Nardelli volunteering to take a mega-million-dollar cut, late last year, when the automaker went to Washington searching for a federal bailout.  Before you begin feeling sorry for Nardelli – who says he’ll stay with the automaker until it’s wrapped up the bankruptcy process – recall that his parting gift when leaving his job as chairman of Home Depot, a few years back, was a fluffy golden parachute worth $210 million.    (more…)

GMAC Financial Services Agrees to Provide Financing for Chrysler Dealers and Customers

Chrysler Financial will be phased out.

by on Apr.30, 2009

Alvaro deMolina, CEO GMAC

"GMAC is pleased to be part of the solution to restructure and stabilize the U.S. auto industry," said GMAC Chief Executive Officer Alvaro G. de Molina.

GMAC Financial Services has just announced that it has entered into an agreement with Chrysler LLC to provide automotive financing products and services to Chrysler dealers and customers. Chrysler Finance will continue to carry the existing book of business for dealer inventory, but would eventually be liquidated as those loans are paid off. Retail contracts going forward would be handled by GMAC.

GMAC is a bank holding company with operations in North America, South America, Europe and Asia-Pacific, and that gives it access to funding that Chrysler Finance does not have under the existing frozen credit markets. The company is owned by a Cerberus-led consortium, which holds 51%, and  former owner General Motors, which now holds 49%.  Cerberus, of course, is the soon to be former owner of Chrysler, which filed for bankruptcy earlier today. As of December 31, 2008, the company had $189 billion in assets and serviced 15 million customers around the world.

Under the tentative agreement, GMAC will be the preferred provider of new wholesale financing for new Chrysler dealer inventory and has a four-year agreement for “incentivized” retail financing with limited exclusivity.

President Obama had explained the rationale for the new financial arrangement earlier in the day. “It’s now clear that Chrysler Financial — the institution that finances Chrysler cars and dealers — would on its own require an unacceptably large stream of taxpayer money to remain viable — and that’s something I refuse to provide,” the President said. “And that is why, as part of this agreement, GMAC, an independent bank holding company that finances General Motors, has agreed to finance new Chrysler sales.”

The President went on to explain that the U.S. would be providing additional capital to GMAC to help unlock the frozen credit markets and free up lending so that consumers can get auto loans and dealers can finance their inventories. “Tomorrow, the Small Business Administration will be announcing it is expanding eligibility for some loans to include more suppliers and dealers, including RV dealers,” the President concluded. 

“GMAC is pleased to be part of the solution to restructure and stabilize the U.S. auto industry,” said GMAC Chief Executive Officer Alvaro G. de Molina. “Providing financing options to dealers and consumers is critical as we work through one of the most challenging periods in the global auto sector. We will leverage our strengths and capabilities as the leading automotive finance company to serve our new customers, while maintaining our commitment to current customers.

“Serving as the primary source of financing for Chrysler is consistent with our strategy to diversify our automotive business,” de Molina said. “We intend to work through the operational process quickly and effectively to ensure that the appropriate level of credit is available to support the sale of Chrysler vehicles.” (more…)

A Fiat takeover of Chrysler Likely Means Curtains for CEO Bob Nardelli

U.S. Treasury and Fiat will select a new "independent board of directors" if deal is approved.

by on Apr.17, 2009

As one Italian said to another it's not personal, it's just business.

As one Italian boss said to another about to be ex-boss "it's not personal, it's just business."

Rich Wagoner’s head wouldn’t be the only one to roll as a result of taxpayer financed restructurings at General Motors Corporation and Chrysler LLC, according to one interpretation of an e-mail that Chrysler CEO Bob Nardelli sent to employees yesterday.

In an update on restructuring plans at the ailing automaker, Nardelli said that the United States Treasury and Fiat Spa would select a new board comprised of independent directors not associated with either company, if negotiations conclude with Fiat taking a large stake in the automaker. The board would then presumably elect a new Chairman. What that means for Nardelli, the current chairman, is unclear, and Chrysler did not immediately respond to request for comment.

A “Fiat Alliance” would provide the Chrysler with access to competitive fuel-efficient vehicle platforms, distribution capabilities in overseas markets and cost-saving opportunities. Since the U.S. Treasury Department has already concluded that Chrysler is not viable as a stand alone company, Fiat appears to be able to dictate whatever deal it wants.

Sergio Marchionne, Fiat’s Chairman and CEO told reporters earlier this week that he could end up running Chrysler and he also said he would walk away from the deal if unions do not agree to cut their wage rates.


30 Years of Restructuring

From Iacocca to Nardelli, Smith to Henderson, what's different?

by on Mar.30, 2009

Iacocca won over Washington, in 1979, but this time, could "the pieces of the mosaic fall off the wall"?

Iacocca won over Washington, in 1979, but this time, could "the pieces of the mosaic fall off the wall"?

The mood was somber, yet there was a sense of electricity surging through the room as the CEO strode up to the microphone. The situation was desperate, he quickly acknowledged, and without everyone’s cooperation – workers, bankers, investors and even the federal government – he warned, “then the pieces of the mosaic fall off the wall.”

That eloquent turn of phrase just might have come from Barack Obama, this morning, as he explained his decision to delay any additional assistance to General Motors and Chrysler. Perhaps it could have been the words of Rick Wagoner, the newly-ousted GM CEO, or Chrysler’s chief executive, Bob Nardelli, when they glumly admitted the need for a government bailout to save their companies, last autumn.

In fact, the speaker was Lee Iacocca, the legendary Chrysler chairman, when he announced plans to seek his own federal bailout, nearly 30 years ago.

That news conference was one of the very first events I covered as a rookie on the Detroit beat, and I can still recall the shock his words generated in the cramped and overheated news room at Chrysler’s old headquarters, the K.T. Keller Building, in Highland Park, Michigan. It was long before cell phones and Blackberrys, yet before the blunt-talking executive had even finished his presentation, those words were echoing across the world.

Anyone who thinks the battle for federal aid has been tough, this time around, should check the archives to see what Iacocca and the rest of Chrysler’s stakeholders went through those many decades ago. A thorough bit of research will also reveal just how strongly the automaker emerged from that particular brush with bankruptcy. And, by the time the last check was written to cover the loans Chrysler got, it had also presented U.S. taxpayers with a nearly 40% return on their investment.

That’s the good news. But the flipside of the story is that it didn’t take all that long before Chrysler once again was in trouble. By the end of the 1980s, it was sinking rapidly towards insolvency, a collapse this time forestalled by the arrival of the so-called LH cars, a line-up of strikingly different mid-size sedans, such as the Dodge Intrepid. (more…)

Dear Employee (or Have You Been Fired Yet?)

Nardelli aims to rally the Chrysler troops

by on Jan.23, 2009

Chrysler CEO Bob Nardelli

Chrysler CEO Bob Nardelli

In this digital era of mass e-mails, it’s always nice to get a personal note. So, we at were pleased to discover the following note land in our digital transom from our old friend Bob. That’s Nardelli, to you, of course, as in CEO of the Italian automaker, Chrysler. We thought we’d share his words with you readers, and ask you to pass on the additional missive to Chrysler workers – and soon to be unemployed ex-Chrysler employees.

It was only a week ago that we met during media days at the North American International Auto Show…what a difference a week can make. It was good to spend time with you and I have appreciated reading your reports. Additionally, I recognize the intense pressure you face in reporting accurately on all that is going on in the automobile industry today.

We at Chrysler LLC recognize that the current economic and industry environment is extremely difficult. We don’t underestimate the challenges ahead. I would like to reinforce, however, that Chrysler is developing a successful viability plan. The federal bridge loan allows us to continue our aggressive restructuring effort and invest in high quality, fuel efficient vehicles while developing a plan that anticipates we will begin repayment of the U.S. Treasury loan by 2012.