‘Capital Insights’ with Jack Kern: Former Home Depot Chief Nardelli Hammers Chrysler into Bankruptcy
- May 01, 2009
“An Army is a team. It lives, eats, sleeps, fights as a team. This individuality stuff is a bunch of bullshit.”–General George S. Patton, Jr.
Sometimes you just have to wonder how these guys keep getting the top spot. Former Home Depot Chief Bob Nardelli was well known around the orange themed retailer as a guy with organizational prowess and discipline on his mind. What became known inside the company as the Orange Crush, (with apologies to Syracuse University) the military like precision (is that an oxymoron now?) that Nardelli attempted to instill in the troops, from cashiers to counter clerks was met with derision, defecting customers, (Can you say Lowe’s?) and greatly reduced revenues. Nardelli took his parachute, probably not in the way a lot of employees would have preferred, and left.
Not too long after that, when it was obvious that every other possible candidate for Chrysler wasn’t available, they gave the job to Nardelli. It was, in a sense, the beginning of the end of the march towards the destruction of Chrysler, one of America’s founding auto makers. The company was started by Walter Chrysler in 1925 after buying out the Maxwell Motor Company. Chrysler, a very successful industrialist who, born in 1875 was around for the dawn of the era of the automobile would probably have been aghast at the thought of foreign ownership and doubly upset it was Fiat. Chrysler was born in an age yet to see two world wars, and ultimately his railroad experience and becoming a car man, an affectionate term of the times, made important strides in developing technologies we count on today.
I can’t help but feel a sense of sadness at this recent bankruptcy and fire sale to a car maker that builds vehicles that run faster in reverse than any other direction. It’s been said the best way to beat a Fiat in a race is to just wait until they try to get it started. Stories abound about how Fiat makes cars that double as boat anchors that you can always hear coming, but rarely see them leave.
I understand about the critical technologies issue, about the catastropic loss of employment and how this change in ownership, with Fiat potentially ending up with 51% will prove to have been necessary. I doubt it will be seen as a triumph for the president and certainly it will scare the United Auto Workers into submission. As a nation, we’ve gotten used to Toyotas and Hondas and foreign cars are part of the landscape of modern society. The gains in safe and efficient vehicles are astounding.
But with the loss of Chrysler, we’ve lost something dear to American history. As a company tracing its roots to the very beginning of the industrial revolution, somehow, quietly and without fanfare, an era is passing.
I’m going to take off my hat and show respect for what made Chrysler a great company, founded by a man we just don’t hear enough about anymore, and I hope you will too.
(Jack Kern is the Managing Director of Kern Investment Research, based outside of Washington, DC. He can be reached at JKern@KernIRC.com or 301.601.1900.)