Nardelli, Act 3

Bob Nardelli proved two things when he was CEO of Home Depot. The first, which everybody remembers, was that he is a man congenitally unsuited to running a large public company. His nadir as CEO came at the Home Depot annual meeting in May of last year, when the board didn't turn up, Nardelli restricted questions to one minute, and Joe Nocera eviscerated Nardelli in a brutal and utterly deserved column. There's no doubt that GE was quite right to pick Jeffrey Immelt rather than Nardelli to replace Jack Welch as CEO.

The other thing, which many fewer people remember, was that Nardelli inherited a struggling retail business and turned it around, at least when it came to financial results. Dividends soared, and both profits and margins hit all-time highs. It's true that the stock price went nowhere, and that Home Depot's reputation among both customers and store management sank noticeably. And ultimately it was that stagnant stock price which led to Nardelli's ouster, along with his infamous $210 million severance package. But the fact is that the guy can, actually, run a company with an eye to the bottom line.

So it's both surprising and unsurprising that Nardelli has now popped up as the new CEO of Chrysler. It's surprising because everybody expected Chrysler's management to remain largely unchanged, with Thomas LaSorda, a man who knows the auto industry, staying on as CEO. But it's unsurprising in that Cerberus, Chrysler's new owner, is known to shake up the companies it buys; and Nardelli is a perfect CEO for an aggressive private (but not public) company.

All the same, this is very unlikely to be welcome news as far as Chrysler's unions are concerned, and they might now be having second thoughts about endorsing the Cerberus deal. Nardelli has but one master now, and that's Cerberus. He will do whatever it takes to bring the company to profitability, even in the face of a staggeringly large debt burden.