Nardelli a Victim of Economic Forces

In 20 months as CEO of Chrysler, Robert Nardelli didn't exactly fail. He just didn't succeed.

Nardelli "was a hatchet man," says industry analyst James Harbour, founder of the Harbour Report. "He had one focus, and that was to cut to profitability. He even stopped all product development. Unfortunately, he got caught up last year with high gas prices and no credit, so it didn't matter."

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Nardelli stepped down this month, as Chrysler emerged from bankruptcy. General Motors(GMGMQ) followed Chrysler into bankruptcy, and will be headed by a former AT&T(T) executive when it emerges.

The new Chrysler will be run by Fiat, which owns 20% of the company, with the option of increasing its stake to as much as 35%. Currently, the United Auto Workers holds 55%, while the U.S. and Canadian governments own the rest.

Previous owner Cerberus named Nardelli to lead Chrysler in August 2007, after buying 80% of the automaker from Germany's Daimler. He had spent three decades at General Electric(GE) and six years as CEO of Home Depot(HD).

During Nardelli's tenure at Home Depot, sales doubled to about $85 billion, and Nardelli was highly compensated. He was paid $240 million and left, ousted by the board, with a severance package estimated at $210 million.

Rebecca Lindland, director of the autos group at HIS Global Insight, says Nardelli "had an awful lot of baggage to contend with," including the high severance package. Additionally, when he arrived, Chrysler "was extricating itself from a bad marriage [to Daimler, where] it had been abused for seven years," she says.

At Chrysler, Nardelli's problem was largely timing, says Bill Swelbar, a management consultant and research engineer who works in the Center for Air Transportation at MIT.