To: Robert L. Nardelli, chief executive of Chrysler
From: Jack Flack
Re: Saving yourself by saving Chrysler
Yesterday provided the simple, noisy theater required to get you what you needed. They pretended to strike, and you pretended to cave. In reality, the $11 billion you paid to get the health-benefit liabilities off your books will soon look outrageously cheap, and limiting job guarantees to the lifetime of the individual products will give you far more maneuverability than anyone is reporting. You were right to allow the U.A.W. to claim victory while you quietly suppressed a smirk, knowing you have just secured much greater flexibility for Chrysler.

With that accomplished, it’s time to get focused on the bigger game. I assume that you’re still furious about the way the story of your time at Home Depot has played out and that you crave redemption. With that in mind, I recommend seven courses of action:

Understand what’s achievable. Your friends tell you that you are a misunderstood genius. Virtually everyone else on the planet views you as a tin-eared tyrant and shameless champion of corporate greed. That part of your reputation is indelible. So act professionally, but do not embarrass yourself by pretending to be nice.

Instead, you must focus on the recent criticism that you are a poor business strategist, given that you barreled down the wholesale supply path with H.D. Direct  while also dismantling the service culture at the retailer. That label can indeed be reversed. In fact, it must be. Because if you fail to do that, the world will conclude you were never really C.E.O. material after all, and you will be permanently tagged a prickly, poisonous flower that could flourish only at a lower level and within the unique atmosphere of the old G.E. hothouse.

Free-agent dream teams seldom work in business, and you need to restrain your hands-on instincts and confine your role to the tiny tip at the very top of the pyramid, focusing on high-level strategy. The Cerberus time frame for the endgame of its Chrysler acquisition is four years, and your tenure should be half that. Your job is to make the big moves that get the business model properly structured and then turn it over to a popular auto industry guy, either Press or LaSorda.

Chrysler can’t fully grow its way back into viability, and belt-tightening will be insufficient. Instead, you must create a dramatically different cost structure by paring the company down to its three assets of value: Chrysler Finance, the dealer network, and your brand portfolio. Everything else must be off-loaded, dropped into an alliance, or shut down.

Frame the crisis—and then the solution. Establish the context by declaring that the world changed long ago and that Chrysler teeters on extinction. Point to a long history of woes, and make the case that Chrysler will never escape from recurring crisis until it is completely recast. Your language should sound something like this:

“Folks, it’s much, much worse than we thought. Our business model is fundamentally flawed, and it has been for decades. Iacocca couldn’t fix it, and neither can I. If we want Chrysler to exist a decade from now, then we are going to have to drastically change our basic composition. We can create a great business, but we will have to move boldly.”