Why did Cerberus ask fired Home Depot (HD) CEO Bob Nardelli to run Chrysler?

In Monday morning news that had me scratching my groggy head, BusinessWeek reports that fired Home Depot Inc. (NYSE: HD) CEO -- and General Electric Co. (NYSE: GE) alum -- Bob Nardelli is in charge of fixing Chrysler. If someone can explain to me why this makes sense, I would like to hear it.

That's because during his tenure as CEO, Nardelli systematically destroyed Home Depot's greatest strengths -- its expert sales staff and ability to supply products that customers needed in the stores. Moreover, he has no experience in the automobile industry, which depends heavily for its success on developing cars that consumers want to buy at a price they can afford.

Nardelli is not the first manager from outside the auto industry to be parachuted in to save the day. Consider Alan Mullaly, who was passed over for CEO of Boeing Company (NYSE: BA) for another GE alum, James McNerney. Mullaly took over at Ford Motor Co. (NYSE: F) in September 2006.

Mullaly's performance at Ford has been mixed. According to AutoBlog, Mullaly came to Ford with some relevant experience. He turned around Boeing's Commercial Airplanes division and had "deep experience in customer satisfaction, manufacturing, supplier relations and labor relations, all of which have applications to the challenges of Ford." However, Ford's stock has since then declined 7% from $8.66 to $8.05. But it's also fair to give Mullaly some credit for a $750 million second-quarter profit, as AP reported.

But Nardelli has yet to demonstrate the kinds of skills that Ford touted when it hired Mullaly. In fact, the customer responsiveness that Nardelli destroyed at Home Depot is the very thing Chrysler needs to rebound. Granted Chrysler faces some rough cost cutting. And Nardelli demonstrated that he can do that at Home Depot.

But I wonder how labor unions who take big pay cuts will feel about giving back that money to an executive who walked out of his failed tenure at Home Depot with a $210 million severance package.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares and has no financial interest in the other securities mentioned in this post.

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