Chrysler Gets a New CEO! Ex-Home Depot CEO Will Take the Reins…Will it Work?

August 6, 2007

The New York Times has just announced that former Home Depot CEO, Robert L. Nardelli is going to be appointed as the new CEO of Chrysler. Earlier this year Nardelli was ousted from his chief executive position at Home Depot due to arguments with stock holders over his enormous pay package.

Chrysler’s new owner Cerberus Capital Management officially took over Chrysler on Friday and now the group has appointed a new CEO to help turn the automaker around. Nardelli was chosen due to his turn around expertise.

According to The New York Times, this opportunity is Nardelli’s chance to rebuild his reputation, which was tarnished after the troubles with Home Depot. He finally given a severance package worth $210 million.

This is the second time that a Detroit automaker has appointed a CEO from outside the auto industry within the last year. Alan Mulally was recently appointed as the CEO of Ford from his former position at Boeing.

The interesting thing about Nardelli’s new position is that if he does not turn the automaker around he will not be paid. His entire package is based on performance, so if he doesn’t improve Chrysler, he will not be paid.

This is a difficult time for the U.S. automakers, since July was the first time in history that their combined market share was lower than that of the imports in the U.S. Chrysler’s sales are continuing to decline and last month the automaker slipped to 5th place behind GM, Toyota, Ford, and Honda.

Former Chrysler CEO Tom. LaSorda will now serve as vice chairman and president.

The big question on everyone’s minds is: Will a non-car guy be able to turn the company around?

Chrysler is also going to start using its classic Pentastar logo again to show that the automaker is returning to its American roots. The logo was originally dropped in 1998 with Chrysler’s merger with Daimler-Benz.