Chrysler began its new life as a private company on Monday with an auto-industry outsider taking the wheel.
Bob Nardelli, who left Home Depot in January after a shareholder rebellion over his outsized pay, was named to head the company, replacing Tom LaSorda, who is taking the No. 2 slot.
"We'll move forward with speed and a renewed focus on meeting the needs of our customers," Nardelli said during a celebratory event at Chrysler's headquarters in Auburn Hills, Mich.
Nardelli helped increase revenue and profits at Home Depot and boost the number of stores the company operates. But he resigned from the company after it came under intense criticism for his hefty pay and slumping stock price. Nardelli left Home Depot with a golden parachute worth US $210 million.
Nardelli said Monday that his compensation at Chrysler would be based on the company's performance.
Some wondered what effect Nardelli's hiring would have on ongoing contract talks with the United Auto Workers, but Nardelli was quick to point out Monday that union president Ron Gettelfinger already has been contacted about the executive shakeup at Chrysler in a two-hour meeting.
LaSorda, Chrysler LLC's newly named president and vice-chairman, still will be at the forefront of "what could be a landmark negotiating period" not only for Chrysler, but for the auto industry, Nardelli said.
On Friday, DaimlerChrysler AG transferred an 80.1 per cent stake in Chrysler to New York-based Cerberus Capital Management LP, one of the world's largest private equity companies, in a US $7.4 billion deal. The German automaker, which is to be renamed Daimler AG, retained a 19.9 per cent interest in Chrysler.
Cerberus chairman John Snow previously had said Cerberus planned to keep Chrysler's management team in place and give it the freedom to implement its restructuring plan, which calls for shedding 13,000 hourly and salaried jobs in the U.S. and Canada by 2009.
Like other U.S. auto companies, Chrysler has been struggling to make a profit while sales were falling and pension and retiree health costs were rising.
Chrysler made $1.8 billion in 2005 but lost $618 million US in 2006 and $1.98 billion US before interest and taxes in the first quarter of this year. DaimlerChrysler didn't report second-quarter earnings for Chrysler because of the impending sale.
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