Fixing The Car Companies: Does Chrysler's Nardelli Get To Keep His Job? (TM)(GM)(F)(HMC)

The current word in the news media is that Chrysler chief Robert Nardelli will keep his job, unlike his counterpart at GM (GM). That seems odd since, so far, the heads of Toyota (TM) and Honda (HMC), which are much more successful than Chrysler, have been replaced. The head of Peugeot is also gone.

Nardelli may have dodged a bullet for all of the wrong reasons. Like Ford’s (F) Alan Mulally, Nardelli was not in Detroit when the current downturn in the US car business began. Nardelli can say he has clean hands, although that is not true. He joined Chrysler in August 2007 and the No.3 US car company has performed much more poorly than its peers since then. Chrysler has been too slow in cutting workers and has done little to revamp its line of light vehicles to make sales to consumers who want more fuel-efficient cars.

Nardelli could still be out of work within a month. The Administration wants a marriage between Chrysler and Fiat. If the does not happen, Chrysler could still be forced into Chapter 11. Creditors, suppliers, and the UAW may want to have fresh blood in the corner office. Other car companies have set the precedent. The CEO is expendable if dumping him is the key to a better future.

Douglas A. McIntyre