It didn’t take long for Robert (Bob) Nardelli to land on his feet…You’ve all probably heard by now, Bob Nardelli has been picked to run Chrysler.
For those of you that may have forgotten or were not aware of all the details:
Many people questioned whether Nardelli’s failure to turn around Home Depot was a death knell for Six Sigma, a process improvement program (probably one of many GE management programs implemented while at Home Depot) Nardelli championed. In my opinion, anyone who has been in business understands that one program does not make or break a great company. It can, however — as in the case of Six Sigma, help people use a structured methodology to solve real-world problems and fix them so they don’t happen again.
But on to the big news: Cerberus Capital Management LP, who bought an 80.1% stake from DaimlerChrysler AG in exchange for investing $5 billion in Chrysler and $1 billion in its financing unit, has named Nardelli as chairman and CEO of its Chrysler unit.
Nardelli has to deal with sweeping changes in the auto industry, tough negotiations with the United Auto Workers union, and to close a $30-an-hour labor-cost gap with the U.S. operations of competitor Toyota. But the move to the top position of Chrysler, unlike Home Depot, puts him in a private company without the pressure of public shareholders. Nardelli’s pay — $1 per year base salary — is tied to equity and performance of the company. What matters most to Cerberus are the results.
It’s rumored that Nardelli’s experience at GE is one of the main reasons Cerberus wanted him. Many of Cerberus’s advisors are ex-GE, and according to the Wall Street Journal it’s also rumored that Cerberus is a strong believer in Six Sigma (that would make at least two private equity firms reaping big rewards by implementing Six Sigma at acquired companies).
So, will Bob Nardelli be successful in turning around Chrysler and part of the U.S. automotive industry? Time will tell. What’s clear to me at Cerberus is that running a company more efficiently can be accomplished with Six Sigma.What remains to be seen is how it will be used at Chrysler. That’s the exciting part.