Would You Pay This Man $252 Million

March 20, 2008

We know this much: as his parting “gift” from Home Depot, former CEO Bob Nardelli received a payout worth around $252 million. How much he’ll take home when he finishes up at Chrysler Corp. is uncertain, though most sources suggest that – logically – the payout for the new Chairman of troubled Chrysler LLC will depend on how good a job he does turning things around.

Along with co-Vice Chairmen Jim Press and Tom LaSorda, Nardelli has been traveling the country making the pitch that Chrysler is on the mend, a message he took to the Big Apple, Wednesday, for the opening speech of the 2008 New York Auto Show.

“We’re reinventing ourselves for success,” Nardelli declared, during a nearly 30-minute speech and question-and-answer session that left many members of the media wanting for more.

Nardelli repeated his oft-told tale that as a private company – a part of the private equity giant, Cerberus Capital Management – Chrysler can move quicker and more freely than when it had to respond to shareholders. But one group that Chrysler needs to be more responsive to is its customers, he acknowledged, making a passing reference to the hits Chrysler has taken, lately, for its quality.

“Our customer satisfaction isn’t where we would like it to be,” admitted Nardelli, adding that Chrysler has created a new position, Chief Customer Officer, to more directly connect with current and future buyers.

If there’s a good story to tell, Nardelli suggested it can be found outside the U.S., where Chrysler sales have risen for a consecutive 33 months, reaching 238,000 last year. The goal is to hit 400,000 by 2012.

Closer to home, Nardelli has taken a conservative view of the troubled U.S. market, which he expects to slip to just 15.5 million vehicles, in 2008. He acknowledged it is possible that the market might slip event lower – a new forecast by J.D. Power and Associates says volumes might plunge to just 14.9 million. By trimming production and eliminating weak product lines, Nardelli argued that Chrysler can handle even that worst-case scenario, while also having the potential to ramp up should the American market recover.

Following Nardelli’s speech, Vice Chairman Press offered some of his own thoughts on Chrysler’s recovery, noting the automaker plans to move deliberately and carefully as it re-fashions its product line-up. For Chrysler, the key is to be true to its own heritage and to do a better job of separating any overlapping products, Press said.

For example, Chrysler has two minivans – the Dodge Caravan and Chrysler Town & Country – but that doesn't mean the company has to kill one off. Instead the objective is to emphasize the differences between the Dodge and the Chrysler vans. "We're going to have fewer platforms but put more money into differentiating the vehicles," Press said. "We don't have to be all things to all people."

"We don't have to try and out Toyota, Toyota," said Press, who spent 37 years with the Japanese automaker before joining Chrysler last September. However, Chrysler will also look at new product niches, particularly on the car side, Press. There is an opportunity, meanwhile, to move upscale now that Chrysler is no longer married to Daimler and Mercedes-Benz. With Joe Szczesny

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