From detroit news:
In its first year under Chairman and CEO Bob Nardelli, Chrysler LLC showed it can be aggressive, creative and fast -- but questions remain about whether that will be enough to save the troubled automaker.
Cerberus Capital Management LP took over the Auburn Hills automaker and installed Nardelli at the helm a year ago this week, severing a nine-year union with Germany's Daimler AG and making Chrysler the first privately held U.S. automaker in half a century.
Auto industry outsider Nardelli, a former top executive at General Electric Co. and CEO of the Home Depot, guided Chrysler through a tumultuous year that included a brief strike by the United Auto Workers and a battle against a slumping U.S. market share while trying to establish a corporate culture and identity for Chrysler after its split from Daimler.
The challenges ahead for Nardelli could prove even more difficult. Chrysler must solidify its finances and take on the twin tasks of reshaping a truck-heavy lineup and expanding its limited international presence.
Chrysler lacks the strengths of rival automakers: Toyota Motor Corp.'s technology; General Motors Corp.'s foothold in high-growth markets; and Ford Motor Co.'s European car portfolio, now headed to the United States. Instead, analysts say the automaker's greatest asset may be its nimble, Nardelli-led management team that answers not to shareholders but to private owners who are not afraid to pull the trigger on a deal -- whether to strengthen, or even dismantle, the company.
Under Nardelli, Chrysler has done what it needs to do to survive, including cutting unprofitable models and pushing for quality improvements, said Tom Libby, senior director of industry analysis at Power Information Network, a division of J.D. Power and Associates.
"Mr. Nardelli is an aggressive, straightforward manager that does what needs to be done," Libby said. "Unfortunately the benefits of his actions will take some time before they begin to be seen."
Nardelli says it is up to Cerberus to consider Chrysler's long-term future, but he and his management team are running day-to-day operations and fighting hard to turn things around.
Chrysler "looked squarely into the eyes of adversity" this past year and is now moving aggressively to respond, Nardelli told reporters last week.
Looking to the next year, Nardelli said Chrysler must weather the current economy, meet demands for improved vehicle quality and fuel efficiency, and expand its international partnerships.
The first step in any Chrysler turnaround is survival.
Several analysts, including Fitch Ratings, question whether Chrysler will make it to its second anniversary under Cerberus before running out of cash. If auto sales stay flat or decline in 2009, a recent Fitch report said Chrysler could reach minimum required cash levels in late 2009.
For Chrysler to rebound, it must revamp an "out-of-touch" product lineup, J.D. Power's Libby said.
Chrysler sales have fallen the most of any major automaker as consumers shun the trucks, SUVs and minivans that account for 74 percent of its sales, according to Autodata Corp. All the vehicles on Chrysler dealer lots today were developed before Nardelli arrived.
Management has done what it could quickly.
Nardelli spearheaded an effort to make fast improvements, especially to vehicle interiors. Last week, he said Chrysler has made nearly 500 line-item changes to its cars and trucks under his watch.
Earlier this year, Chrysler struck a deal with Nissan to bring a subcompact car to the United States and has just launched hybrids -- a pair of large SUVs. But analysts and dealers are anxious to see more vehicles that answer consumers' demand for better fuel-efficiency.
Any future for Chrysler will be as a more international company, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. Chrysler is reaching out to partners, including Chinese automakers, in hopes of expanding in growing regions of the world and accessing vehicles that could be sold in this hemisphere.
