Sigh. Bob Nardelli "feels good."
Those of you with elephantine memories will remember that I'm no fan of Bob Nardelli. The erstwhile CEO of Home Depot drove away customers by cutting back on full-time, experienced staff and replacing them with less knowledgeable part-timers. After torpedoing revenue, he then he spent money on customer service improvement programs (which would have been unnecessary had he just kept the original staff) and tried re-hiring the same sort of experienced staff he sacked earlier. For his efforts in destroying shareholder value, Nardelli was awarded a pink slip -- and a $214 million severance package.
Fast forward to today's Chrysler bankruptcy. In a statement that boggles the imagination, Nardelli told the NYTimes that
The article goes onto point out that
Hmm. Sounds a lot like Home Depot, doesn't it? Lowering costs by laying off staff?
Look, I'm no business guru. I've never run a company larger than four people. And now I make my living as a consultant, because I don't have the skills or experience to do a real job like making stuff that people will pay for. Frankly, I can't even begin to comprehend the difficulty of managing a company as large and complex as an auto maker.
And yet.
And yet I do know that there's no secret to cutting expenses. Close a few plants, fire a bunch of people, reduce production, and presto! Your costs have gone down. It's hard for me to fathom how lowering costs is considered to be some sort of managerial brilliance, a leadership tour de force. And in Nardelli's case, it's pretty much the same playbook that he used at Home Depot.
Now, I'm not suggesting that Chrysler was a paragon of efficiency, or that plant closings and layoffs were out of line. When your cars are seriously unpopular and no one is buying them, well, you're going to have to do something about costs. But it's hard to believe that anyone could feel good about steering a company into bankruptcy. Hell, Kiichiro Toyoda resigned in shame when he had to layoff 25% of his employees and his company nearly went bankrupt in 1950. But Nardelli "feels good" about steering the company into bankruptcy? Am I missing something?
Stay tuned for Part III of my Nardelli screed. I'll post that when we read about his severance package in the next month or so. Any guesses on how much money he'll walk away with?