Robert Louis Nardelli (born May 17, 1948) is an American businessman, was the former chairman and chief executive officer of Chrysler from August 2007 to April 2009, the former CEO of Freedom Group from September 2010 to March 2012, and had earlier served in a similar capacity at The Home Depot from December 2000 to January 2007. Prior to that, Nardelli had risen to become one of the top four executives at General Electric.
Born in Old Forge, Lackawanna County, Pennsylvania, Nardelli attended Rockford Auburn High School in Rockford, Illinois and received his Bachelor of Science in business from Western Illinois University in Macomb, where he was a member of the Tau Kappa Epsilon fraternity. Nardelli also earned an MBA from the University of Louisville. He is married to Susan L. Schmulbach with four children and attends Roman Catholic church.
He joined General Electric in 1971 as an entry-level manufacturing engineer. From 1988 to 1991, Nardelli was an executive for a division of the construction equipment maker, J. I. Case Company, which was then part of Tenneco.
By 1995, he had risen to president and CEO of GE Power Systems, also having the title of GE senior vice president. Nardelli was often known as "Little Jack", after his mentor Jack Welch, whom Nardelli had ambitions to succeed as CEO of GE. When Jack Welch retired as chairman and CEO of GE, a lengthy and well-publicized succession planning saga ensued. Nardelli competed with James McNerney and Jeff Immelt to succeed Welch. With Immelt winning the three-way race, Nardelli and McNerney left GE (as was Welch's plan). About 10 minutes after Welch let him go, Nardelli received a job offer from Ken Langone, who at the time was on the boards of both GE and The Home Depot.
The Home Depot
Nardelli became CEO of The Home Depot in December 2000 despite having no retail experience. Using the Six Sigma management strategy used at GE, he dramatically overhauled the company and replaced its entrepreneurial culture of innovative product design with one focused on relentless cost-cutting. He changed the decentralized management structure by eliminating and consolidating division executives. He also installed processes and streamlined operations, most notably implementing a computerized automated inventory system and centralizing supply orders at the headquarters.
Nardelli was credited with doubling the sales of the chain and improving its competitive position. Revenue increased from $45.74 billion in 2000 to $81.51 billion in 2005, while net earnings after tax rose from $2.58 billion to $5.84 billion. During Nardelli's tenure, The Home Depot stock was essentially steady while competitor Lowe's stock doubled, which along with his $240 million compensation eventually earned the ire of investors. His blunt, critical and autocratic management style turned off employees and the public. Nardelli was notably criticized for cutting back on knowledgeable full-time employees with experience in the trades and replacing them with part-time help with little relevant experience. This move reduced costs, but hurt customer service at a time when Lowe's was making inroads nationwide. While the board strongly stood by him for most of his tenure, questions about his leadership mounted in 2006, and in an ominous portent of the near future, he was the only director present at the annual meeting. At that meeting, he only allowed shareholders to speak for one minute each. Nardelli and the board reached a mutual agreement for Nardelli to resign on January 3, 2007; his severance package was estimated at $210 million. He was succeeded by The Home Depot vice chairman and executive vice president, Frank Blake. Blake had served as Nardelli's deputy at both GE Power Systems and Home Depot.
During his tenure at The Home Depot, Nardelli met President George W. Bush at the White House in 2002 and was appointed to Bush's Council on Service and Civic Participation (although he is no longer a member). Nardelli also hosted a garden reception/fundraiser for Bush at his Atlanta home on May 20, 2004.
While CEO of Home Depot, Nardelli was also briefly on the board of directors for Coca-Cola, starting in 2001.
On August 5, 2007, he became chairman and CEO of Chrysler, which had recently been taken private by private equity firm, Cerberus Capital Management. His annual salary at Chrysler was $1, with other compensation not publicly disclosed. (It's rumored that the terms were that he wouldn't be paid unless Chrysler succeeded. If they did succeed, he would be paid a salary along the lines of $30 million.)
On February 17, 2008, before his first Daytona 500 race as Chrysler CEO, Nardelli guaranteed that Dodge would win the race for the first time since 2002, and that he would award a $1 million bonus to the Dodge team that did it. Ryan Newman, the driver of the No. 12 Alltel Dodge, fulfilled this promise, and his car owner Roger Penske collected the $1 million bounty.
On December 4, 2008, in an appearance on CNN's The Situation Room with Wolf Blitzer, Nardelli was asked, "So what do you say about the argument that the Japanese, the Germans, Koreans make better cars than the Americans?" He responded, "We spent about half a billion dollars in the first several months. Our warranty costs are down 29%. It's an interesting comparison because in the hearing today, going around the panel, the majority of the Senators said that citing specific vehicles that they own that they've got 60-, 70-, 80,000 miles. The comment was you guys are making them too good and therefore, we're not buying vehicles and we're contributing to your problem. That was from the Senators on the committee today."
On March 17, 2009, Nardelli said that Chrysler Financial would require a second round of loans. On April 21, 2009, it was alleged by an unnamed "federal watchdog agency" that a $750 million loan from the government was turned down, on the grounds that it would have required that executive compensation be capped. According to contemporary media coverage "as part of the economic stimulus package, Congress approved compensation limits, and the Treasury is working on clarifying what the firms must do to comply with the rules. In other words, the executives were asked to sign the waivers without knowing what specific limits the Treasury might set." On April 30, 2009, Chrysler filed for Chapter 11 bankruptcy. The same day, Nardelli announced that he would leave the company as soon as the bankruptcy was over and his replacement was announced—later determined to be Sergio Marchionne—who would likely face a pay cap.
Robert Nardelli became CEO of the Freedom Group in September 2010 as the North Carolina-based gun maker searched for a permanent CEO. In March 2012, he stepped down as CEO of the Freedom Group, and as the head of the operations and advisory business of Cerberus Capital Management LP. He is now operating XLR-8 LLC, an investment and advisory firm.
- "Robert L. Nardelli". Nndb.com. Retrieved August 25, 2014.
- "GE exec to head Home Depot – Dec. 5, 2000". CNN. Retrieved May 21, 2018.
- Flaherty, Joseph (December 31, 2013). "How Home Depot Copied Apple to Build an Ingenious New Bucket". Wired. Retrieved September 13, 2014.
In 2000, Marcus retired and brought on Bob Nardelli as CEO. Nardelli had been one of Jack Welch's hatchet men at GE, and he spent the next seven years driving down costs—at the expense of The Home Depot's reputation for innovation...Marcus forced Nardelli out in 2007 and brought in a Home Depot veteran to right the ship by returning the focus to developing and selling innovative products, exclusive to Home Depot.
- Nardelli's downfall: It's all about the stock Archived January 27, 2007, at the Wayback Machine
- Lublin, Joann S.; Zimmerman, Ann; Terhune, Chad (January 4, 2007). "Behind Nardelli's Abrupt Exit". The Wall Street Journal.
- Joe Nocera, "The Board Wore Chicken Suits", The New York Times, May 27, 2006
- Grow, Brian (January 15, 2007). "Out at Home Depot". Business Week. Archived from the original on January 8, 2007. Retrieved August 15, 2017.
- Weber, Harry R. (January 3, 2007). "Home Depot CEO Nardelli Abruptly Resigns". Archived from the original on January 4, 2007. Retrieved August 15, 2017.
- Nardelli-Bush article that mentions Presidential Council Archived May 4, 2007, at the Wayback Machine
- Paul Harris (May 22, 2004). "article that mentions Bush Nardelli Garden Reception". The Guardian. Retrieved August 25, 2014.
- Financial Times story about Nardelli's salary
- "Nascar Racing News, Photos, Stats, Scores, Schedule & Videos". Archived from the original on February 18, 2010. Retrieved September 21, 2014.
- "12/04/2008 CNN Nardelli Inverview". CNN. Retrieved August 25, 2014.
- GREG GARDNER Free Press Business (August 19, 2014). "Nardelli Says Chrysler Financial Needs Second Round of Loans, Detroit Free Press". Detroit Free Press. Retrieved August 25, 2014.
- "Pay Rule Led Chrysler to Spurn Loan, Washington Post". The Washington Post. Retrieved August 25, 2014.
- ,"Marchionne confirmed as post-Ch11 Chrysler CEO". Autoblog.com. Retrieved August 25, 2014.
- "Next Chrysler CEO Faces Pay Cap, Detroit Free Press". Detroit Free Press. August 19, 2014. Retrieved August 25, 2014.
- "Cerberus's Freedom Group Withdraws Plans for IPO". Bloomberg.com. Bloomberg. March 9, 2012. Retrieved April 12, 2012.
- "Nardelli Steps Down From Most of His Cerberus Roles". DealBook. Retrieved March 27, 2013.
- USA Today Q&A during Home Depot days
- Alic, Margaret. "Robert L. Nardelli, 1948–". Business Biographies. Reference for Business.
- Grow, Brian (January 7, 2008). "Out at Home Depot: Behind the flameout of controversial CEO Bob Nardelli". Business Week. NBC News.
- Mui, Ylan Q. (January 4, 2007). "Seeing red over a golden parachute; Home Depot's CEO Resigns, And His Hefty Payout Raises Ire". The Washington Post. p. D01.
- Nardeli, Bob (August 2008). "Chrysler's Secret Weapon: Military Talent". GI Jobs (Interview: Transcript). Interviewed by Joshua Hudson. Archived from the original on August 2, 2008.
- "Speakers: Robert Nardelli – Chairman, President and CEO, The Home Depot, Inc". Chief Executive Series. New York University Stern School of Business. November 3, 2003. Profile with links to transcript and video of his interview.
- "The Best & Worst Managers of 2004 – Best Manager: Robert Nardelli – Home Depot". Bloomberg BusinessWeek. January 10, 2005.
- Appearances on C-SPAN