Originally posted at Private Intelligence.
Hey, here’s a great idea!
Let’s take the ex-CEO of a floundering home improvement company, who got to walk away with a $210 million severance package despite years of bad management and languishing stock prices, and make him the new head of a floundering car company!
It makes perfect sense when you consider that Cerberus’ chairman is none other than former (failed) Treasury Secretary John Snow, whose chief accomplishments in the position were failing to persuade China to spend more and save less, and bilking the government out of billions in tax dollars on behalf of his company, CSX.
Given that, why else would you choose a guy like Nardelli (who has no experience in the auto industry, and whose management style can charitably be called “aggressive”) to run the show? Guys like Nardelli and Snow are the perfect examples of how modern American business works…not only does failing your investors and shareholders not prevent you from walking away a multimillionaire, but now you get an even more spectacular chance to fail again!
This has been today’s edition of “Great Moments In Business History.”
Categories: Business/Finance, Economy
You know, Martin, I looked at the story this morning and I didn’t think about Nardelli – or even Snow – except in thinking “those bastards all stick together” as Holden Caulfield observed bout the jocks in CATCHER.
What I notice is the “new American way” – that they’re taking Chrysler PRIVATE. This will allow them to rape and plunder their way through its assets – screwing long time employees and selling off its assets with no stockholders to answer to. It’s piracy, pure and simple.
Look for Chrysler to become a part of history like the REO or the Hudson in no more than 10-15 years….
Excellent point. I’m going to use this story as a frame for a larger piece about the dangers of letting so much of our economy be controlled by private equity firms.
Look, I wasn’t going to mention it, but the choice was either he comes here, to South Africa, to run our economy, or he goes to Chrysler. For the sake of our country we decided to sacrifice Chrysler.
We hope you understand.
Given the choice you faced, Gavin, we can forgive you. 😉
As bad as private equity firms are, thought, they could be made to do good things. Private companies don’t have the quarterly financial pressures to maximize short-term gain at the expense of long-term investment. A version of the private equity system is one of the few things that I think might save newspapers, for example.
I called the local Chrsyler-Dodge dealer from whom I bought a Jeep three years ago. I told him as long as that cretin is running Chrysler, I won’t be returning to the dealership.