Managing in Troubled Times Case Study

Troubled Carmaker Chrysler (B): Can Robert Nardelli Resurrect the Company?

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Abstract:
One of the leading private equity firms, Cerberus Capital Management, L.P. (Cerberus), acquired American auto icon Chrysler, amidst its turnaround efforts. Cerberus agreed to keep Chrysler's management intact, but surprisingly, replaced the chairman and CEO, Thomas LaSorda with Robert (Bob) Nardelli in August 2007. Cerberus' logic behind hiring Bob Nardelli, a former General Electric (GE) high ranking executive and former CEO of The Home Depot Inc., was that he could bring a fresh perspective to privately held Chrysler with his result-driven aggressive leadership and proven track record of successful turnarounds. However, Bob Nardelli's functioning at Home Depot had been criticised despite achieving increase in sales. Nardelli had to leave Home Depot in the wake of sliding stock price, anger over his hefty pay and problems with employees and shareholders. Bob Nardelli's controversial background, lack of experience in the automobile business and manage-through-fear style could make or break the already troubled Chrysler.

Pedagogical Objectives:

• To discuss the leadership change at Chrysler
• To analyse whether the highly autocratic leader Bob Nardelli is the right leader for Chrysler or not and can he resurrect Chrysler's past glory?

Keywords : Chrysler; American Auto Industry; Cerebrus Capital Management; Private Equity Firms; Turnaround; Takeover; UAW; International Expansion; Robert (Bob) Nardelli; Thomas (Tom) LaSorda; Leadership Change; General Electric (GE); Home Depot Inc.; Managing in Troubled Times Case Study; Leadership Styles; Autocratic Leadership

Contents:

• Bob Nardelli: At GE and Home Depot
• Nardelli – Chrysler's Knight in Shining Armour?