About the man that ran Home Depot into the ground!

[steve-u]

Interesting tidbit below about the CEO that left Home Depot earlier in the year. I used to enjoy shopping Home Depot before he took over. Hopefully they will get their act together. To think that Chrysler hired him!!

Steve

http://articles.moneycentral.msn.com/Investing/Extra/ExHomeDepotChiefToSteerChrysler.aspx

Nardelli, a former highflier at General Electric (GE, news, msgs) who lost the contest to succeed Jack Welch as GE's chief executive to Jeffrey Immelt, could be a jolt to Chrysler's culture. A hard-driving executive with a reputation for generating more fear than respect among the ranks, Nardelli left Home Depot (HD, news, msgs) in January under a cloud after the home-improvement chain's stock languished, customer service plummeted and the CEO was tagged by angry investors as arrogant toward shareholders.

Nardelli also became a poster boy for skyrocketing CEO pay not tied to stock performance. To make his image on that score worse, Home Depot and the CEO negotiated a $210 million "retirement package."

[Bruce Cohen]

I worked there for two years and when you compare HD to Attica penitentiary, Attica has better food. Along with the $0.25, yup that's correct, quite a bit of the associates DO receive $0.25 an hour yearly raise and no employee discount, a health insurance plan that is good, but HD allows the impression of their contributing to this, while the entire amount (cheap, but good coverage) is paid for by the employees. I highly doubt that Nardelli pays for his medical insurance.

I'd danse in the street naked if they go under and this is not a case of "sour grapes"

Bruce

[mater]

Wonder what Chrysler will have to pay to get rid of him.

[JR]

Wonder what Chrysler will have to pay to get rid of him.

He's not giving up the details of his comp plan, but the outline is that he gets a 1-cent salary and the rest tied to stock performance.

It'll be interesting to see how he fares in the upcoming labor negotiation. The UAW is not to be trifled with in the best of circumstances, but they've got a real problem with his package from HD.

JR

[gwyneth]

He's not giving up the details of his comp plan, but the outline is that he gets a 1-cent salary and the rest tied to stock performance.

Before I found that out I was going to write that we know one thing about him: he must be very, very good at selling himself.

Then I thought about it. If that comp program was his idea, he must be very, very, very good at selling himself.

However, what do you bet that his benefits, expense account, and other fringes are REALLY good?

[JR]

Then I thought about it. If that comp program was his idea, he must be very, very, very good at selling himself.

Actually, that's just the kind of thing that would appeal to the Wall Street types who own Chrysler now. What would they have to lose? A free top executive. If he fails to turn the co. around, you sack him. No cost to the partners. How could they turn him down?

In the meantime they could restructure the co. around the three old brands, Chrysler, Dodge, and Plymouth, getting ready to spin each one out either for sale or public offering. They've got no profits, so their UAW negotiation has a chance of making headway. Get rid of Nardelli in a couple of years, put a car guy or two in his place, sell the divisions, and shrip-shrop, you've got a billion dollar payday.

Not that I've seen these things happen before...

JR

[ironhat]

What Iacocca hath raised, let Nardelli put asunder. This could be Mopar's death nell. No, wait, they decided to resurrect the pentastar logo on all their buildings and stationery. Gee, even the stationery - how can they possibly fail!? Dang, what was I thinking!?!

[Uncle Cracker]

I'd danse in the street naked if they go under and this is not a case of "sour grapes"

But this will not hurt Nardelli, as he has taken his $210mil parachute and jumped. The hurt will come to the rank and file employees, and that's a shame. I'm rooting that they pull out of the nosedive.

[gwyneth]

What Iacocca hath raised, let Nardelli put asunder. This could be Mopar's death nell. No, wait, they decided to resurrect the pentastar logo on all their buildings and stationery. Gee, even the stationery - how can they possibly fail!? Dang, what was I thinking!?!

Did the guy have any manufacturing experience at G.E. or were they too smart to let him?

[germdoc]

I'd danse in the street naked if they go under and this is not a case of "sour grapes"

Bruce

Bruce: can we have that in writing? Oh, come to think of it, we do!

I was gonna post on this myself but got too busy. I'm a capitalist but I don't think one human being is worth $210 million. Come to think of it, why is he worth more than one high school teacher? After all, all he did was run HD's stock price down, whereas Mr. Sauer who has taught at Central HS for 40 years (yes that's right, still going strong at age 65) has educated, conservatively, 5-10,000 kids, many of whom have become teachers, doctors and CEO's.

Our priorities are bass-ackwards.

[ironhat]

Bruce: can we have that in writing? Oh, come to think of it, we do!

I was gonna post on this myself but got too busy. I'm a capitalist but I don't think one human being is worth $210 million. Come to think of it, why is he worth more than one high school teacher? After all, all he did was run HD's stock price down, whereas Mr. Sauer who has taught at Central HS for 40 years (yes that's right, still going strong at age 65) has educated, conservatively, 5-10,000 kids, many of whom have become teachers, doctors and CEO's.

Our priorities are bass-ackwards.

Ditto!! I wonder if HD had to give him that much to buy out a contract. Kind of like amputating a gangrenous limb to save the body. I'm speculating here because I have no idea.

[Woodboy]

Nardelli

This is what I call "baseball manager syndrome". You're looking for a new manager to rescue the team from several losing seasons. Instead of promoting from within, or finding an aspiring assistant somewhere with a successful team, owners routinely go out and bring back some retread manager that has been at several teams and had mediocre results, or even losing seasons.

It’s almost like you have to be in the “club”, or defined as a big league manager already, regardless of your most recent history of failure.

And of course the GE six sigma magic. One thing I found interesting in the book “Good to Great” is that most of the great CEO’s and managers of big companies they reviewed are quiet low profile types that don’t hog the spot light.

My prescription for Chrysler: Build cars with the quality and styling that people want. Pay your new CEO a buck a year and make his performance payment compensation tied to many financial metrics over at least five and better yet ten years.

[Kristofor]

In the meantime they could restructure the co. around the three old brands, Chrysler, Dodge, and Plymouth

Jeep's the 3rd I think, didn't they dump the Pylmouth badge a few years ago?

getting ready to spin each one out either for sale or public offering. They've got no profits, so their UAW negotiation has a chance of making headway. Get rid of Nardelli in a couple of years, put a car guy or two in his place, sell the divisions, and shrip-shrop, you've got a billion dollar payday.

Not that I've seen these things happen before...

JR

Cerberus is in a great position to make money..

Diamler PAID Cerberus to take the company. The deal sounded like they were getting a little bit for the division, but when you dig into it, they were keeping a big chunk of debt, assuming the security for the financing, and chipping in in other ways to the tune of paying ~$500M to Cerberus for them to take Dodge.

UAW now has more retired memebers than working members and their membership has been shrinking for years. They have little leverage to say that their workers can just go work for Ford or GM since they're all letting people go. They may not take huge cuts at this point, but there will be a big taste of real-world employee benefits in the next contract I'm sure.

[steve-u]

My prescription for Chrysler: Build cars with the quality and styling that people want. Pay your new CEO a buck a year and make his performance payment compensation tied to many financial metrics over at least five and better yet ten years.

Unfortunealty I don't think that is his plan which probably is more along the lines of close as many US production facilities as possible, try to break the union, lay of lots and lots of people, squeez car dealers, spin off any sell whatever you can, put as many Chinese parts as possible in the vehicles, and offload pention and healthcare liability to the taxpayers.

It would make sense for a CEO to not only be responsible and paid accordingly for financials but also market share, independent measures of quality, customer loyalty, customer satisfaction, dealer satisfaction, customer retention, and even employee satisfaction [I know -yeah right].

Steve

[gwyneth]

It would make sense for a CEO to not only be responsible and paid accordingly for financials but also market share, independent measures of quality, customer loyalty, customer satisfaction, dealer satisfaction, customer retention, and even employee satisfaction [I know -yeah right].

Wouldn't it be great if new car satisfaction followups included something like those evaluation forms handed to college classes to get feedback about the teacher?

"This part of our satisfaction followup is about our CEO. Your feedback will help determine his compensation for this year, so please answer the questions carefully."

Actually, after dating a high level Detroit exec many years ago and seeing how the exec garage keeps them from having anything remotely close to a normal relationship with a vehicle, IMO the single best way to improve auto CEO's performance would be to MAKE them drive and maintain one of their own economy models that's at least five years old.