Robert Nardelli to head Chrysler

MICHIGAN: Chrysler named former Home Depot chief executive officer Robert Nardelli as CEO, demoting Tom LaSorda, as new owner Cerberus Capital Management takes control of the automaker.

Nardelli, 59, a Cerberus adviser, also will become chairman, Michigan-based Chrysler said Sunday. LaSorda becomes president, while chief operating officer Eric Ridenour will leave Chrysler and won’t be replaced.

The leadership shift puts Cerberus’s 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 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% stake in Chrysler from DaimlerChrysler 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% 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. “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 adviser for 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.

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% earnings-per-share growth for four consecutive years and more than quintupled its dividend to 90 cents a share.

His tenure at Home Depot also included a loss of market share to Lowe’s, and he became a lightning rod for critics of excessive executive pay. Before Home Depot, he was deputy secretary of the US Department of Energy after spending about 10 years at GE.

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. His new role is being announced on the day Chrysler planned a celebration at the company’s headquarters to reintroduce Chrysler’s former ‘pentastar’ logo.