Nardelli is new Chrysler boss

Chrysler LLC named former Home Depot Inc Chief Executive Officer Robert Nardelli as CEO, demoting Tom LaSorda, as new owner Cerberus Capital Management LP takes control of the automaker.

Nardelli, 59, a Cerberus adviser, also will become chairman, Auburn Hills, Michigan-based Chrysler said in a statement. LaSorda becomes president, while Chief Operating Officer Eric Ridenour will leave Chrysler and won't be replaced.

The leadership shift puts Cerberus' stamp on Chrysler as it begins operating the third-largest US-based automaker as a private company. Nardelli will have to lead Chrysler back to profit while battling Asian rivals led by Toyota Motor Corp that are grabbing US sales and market share.

"This is a bit of a surprise," David Healy, a Burnham Securities analyst in Sierra Vista, Arizona, said in an interview. "But I think it shows that Cerberus is going to be tough because of Nardelli's tough reputation."

Nardelli's selection comes three days after Cerberus closed a deal to buy an 80.1 percent stake in Chrysler from DaimlerChrysler AG for $7.4 billion. Nardelli joined Cerberus after being ousted at Home Depot in January amid investor criticism for earning $225 million while the company's stock fell 7.9 percent in his six-year tenure.

"I am very excited to be part of a team focused on re-establishing Chrysler as a standalone industry leader," Nardelli said in a statement. "I am confident that together we can continue the momentum of Chrysler's recovery."

LaSorda, 53, who served as CEO since 2005, will report to Nardelli.

Former Chrysler executive Wolfgang Bernhard, an advisor for New York-based Cerberus who worked on the automaker's purchase, wasn't able to accept the role of non-executive chairman "due to personal and family reasons", Chrysler said.

Home Depot

Under Nardelli, Home Depot doubled sales and the number of store operations while expanding into Mexico and China.

The world's largest home-improvement retailer delivered more than 20 percent earnings-per-share growth for four consecutive years and more than quintupled its dividend to 90 cents a share.

His tenure at Atlanta-based Home Depot also included a loss of market share to Lowe's Cos, and he became a lightning rod for critics of excessive executive pay.

At the last Home Depot annual meeting where he presided, in May 2006, Nardelli was the only director to attend and refused to answer investor questions about his compensation.

Before Home Depot, he was deputy secretary of the US Department of Energy after spending about 10 years at General Electric Co.

Outside the industry Nardelli's move to Chrysler marks the second time in less than a year that a US automaker turned to a new CEO without auto-industry roots. Ford Motor Co named Boeing Co Executive Alan Mulally its CEO in September, replacing Bill Ford, great-grandson of the founder.

Bloomberg News

(China Daily 08/07/2007 page16)