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Restructuring / Turnaround Strategies Case Study

Case Title:

Bob Nardelli at Chrysler: Can he do a Lee Iacocca?

Publication Year : 2009

Authors: Vedadri Chiranjeevi, Saradhi K. Gonela

Industry: Automobile


Case Code: RTS0125

Teaching Note: Available

Structured Assignment: Available

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This case study helps in analysing the factors that led to the downfall of Chrysler. For one it was leadership in denial. Not willing to break the set precedents was another. The case also helps in debating how far was appointing Nardelli correct, given his background and precarious conditions of the company and the industry. Can he do a Lee Iacocca?

Chrysler enjoyed iconic status at Detroit for a long time, but surrendered meekly to the European and Japanese automobile manufacturers. Guided by a ‘prudent’ logic, the company teamed up with Daimler-Benz but the relation ended on a sour note. The private-equity firm, Cerberus Capital Management in a management buyout, took over Chrysler in 2007 for $7.4 billion. The underlying confidence stunned markets, automobile industry experts and analysts. Cerberus appointed Bob Nardelli to clear up the impending mess. Bob Nardelli, with his GE-background and turnaround experience at Home Depot, has chalked out a master plan to turnaround Chrysler. Lee Iacocca, for sure would be watching him over his shoulders. Any advice for Bob Nardelli?

Pedagogical Objectives:

  • To understand and analyse the critical success factors and strategic inflection points of the auto industry
  • To debate on the factors responsible for Chrysler's continuous failures
  • What should Bob Nardelli do to revive the fortunes of one of the Detroit’s Big Three?
  • To debate whether Bob Nardelli is the right person to lead Chrysler to its (un)known future.

Keywords : Chrysler, Lee Iacocca, Robert Nardelli, US Automobile Industry, Daimler-Chrysler, Cerberus Capital Management, Big Three, Strategic Inflection Points, Total product Concept, Leadership, Detroit

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