Will a marriage occur between General Motors (NYSE: GM) and Chrysler? According to industry scuttlebutt, talks have been going on for several weeks, but have been held up partially because of the credit crunch. Today in the Wall Street Journal, a source familiar with the talks reported that talks were proceeding at a "measured pace" and that Cerberus, the private equity firm that owns Chrysler, would want to breathe "fresh air" into the management team of the combined company.
The only member of the two current management teams who could possibly be considered "fresh air" would be Robert Nardelli, much-maligned former CEO of Home Depot and now-chief of Chrysler. He's been in the spot for a little over a year, the sum total of his auto experience. The two most likely candidates to head the combined entity at GM, CEO Rick Wagoner and COO Fritz Henderson, have each been with GM for decades (Henderson was even born in Detroit) and can hardly be considered new blood.
Bringing an outsider into a merged company would certainly create change, though it's hard to know who Cerberus has in mind. The firm's own staff is filled with onetime Fortune 500 executives, including former Johnson & Johnson COO Jim Lenehan and former MCI president and COO Tim Price. My money's on Price, who worked actively on the GMAC deal and thus has deep experience with the industry. Who else could Cerberus be considering for this historic amalgamation of American autos?
Last updated: February 09, 2012: 12:38 PM
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Reader Comments (Page 1 of 1)
10-24-2008 @ 2:18PM
Bre said...
Even entertaining the idea of putting Nardelli into the CEO position if Chrysler and GM merge is assinine. He ran Home Depot into the ground, then finished off what the Germans had already started at Chrysler. How many 'golden parachutes' does this guy get?
10-25-2008 @ 5:04PM
electrix said...
GM has been late to market with new produces for several decades. It's poor management and quality has been it's own downfall. How can a company go from about $90 to $5 a share of stock and still keep the same CEO? The arrogance of GM has brought the company to it's knees and they want the public to bail them out. Since Toyota, Honda and other Asian companies also build cars in the US, should they be bailed out also?
Maybe GM will come out with a Hummer 4 or 1000 HP Corvette that only a few percent of the population would buy and waste another $100 Million on design.
Why would anyone buy a new car from a company that has been on the ropes for the past several years and still stearing the ship into the rocks? People say "Buy American" but the Asian companies are building plants here in the US and hiring Americans. GM just opened plants in India and China. Why should we give money to GM when they are moving jobs overseas? Are Toyota, Honda and Kia now Domestic manufactures?
Cerberus should rethink the merger with the current CEO and staffs. How can a merger between GM and Chrysler work without massive layoffs and shutting down most of it's North Amercian operations. America loses again!!
10-27-2008 @ 1:39AM
Frank said...
How about Jim Press? As former President of Toyota USA he has extensive knowledge and successful experience with the North American market. He knows how a successful auto company should be operated and he is already a Cerberus man.
10-31-2008 @ 1:26PM
reynold said...
Much of this misses a big part of the point of what needs to happen at GM/Chrysler (and american auto companies in particular). You need primarily someone with excellent operational skills (Nardelli, Press, etc... By they way - get off the "Nardelli Home Depot disaster" storyline. Operationally he made changes that were absolutely necessary and made the company better. He was, however, a jerk about it and didn't work within the culture and that was his downfall. Notice that his replacement, Frank Blake, was also an ex-GE guy who kept Nardelli's programs but was better at collaboration and working within the culture) because the Detroit 3 have never quite gotten correct manufacturing principles down. However, none of that matters if you don't have someone who can combine that operational excellence with the ability to negotiate/work with the unions *for the right things*! These deals that allow more parts to be outsourced or health care to be offloaded are not the right deals to be making. They have to be able to have the same sort of HR policies and approach to job work/assignments as the best auto manufacturers do - and that is what the unions fight because it relies on flexibility, cross-training, and innovation - things that they feel threaten their entrenched system of focused expertise and seniority. (See Wall street Journal of October 25th) That's the type of CEO that any american auto manufacturer needs - but who could fit that bill? I really don't know.