Chrysler CEO: Quality first

SOUTHFIELD, Mich. -- Chrysler's new chief executive, ex-Home Depot CEO Robert Nardelli, vowed yesterday to focus on quality while moving quickly to improve the automaker's designs.

"We have to have quality -- period," Nardelli said at Chrysler's Auburn Hills, Mich., headquarters. "If we have quality, it will reflect in the brand, brand loyalty, and customer loyalty."

Nardelli, 59, was selected to lead Chrysler after New York-based Cerberus Capital Management LP finished buying an 80.1 percent stake from DaimlerChrysler AG for $7.4 billion. He joined Cerberus, a buyout firm, after being ousted by Home Depot in January amid investor criticism. He earned $225 million in six years as the company's stock fell 7.9 percent.

Nardelli, who has no auto industry experience, will have to lead Chrysler while battling Asian automakers, which are grabbing more US market share. Chrysler, the third-largest US-based automaker, lost $680 million in 2006. It will now be run as a private company.

Nardelli said his pay will be tied to Chrysler's performance, but declined to provide specifics.

"Cerberus is telling us here that this is not going to be business as usual," said analyst John Wolkonowicz, of Global Insight Inc. in Lexington, Mass. "They understand that the Chrysler of today probably could not survive."

Cerberus demoted Tom LaSorda, 53, who had been CEO since 2005, to president. He will report to Nardelli. Chief operating officer Eric Ridenour will leave and won't be replaced.

LaSorda said he told Cerberus "I would put myself second" and step aside if they found a better top executive.

"I hope he stays," Wolkonowicz said. "With a CEO from outside the auto industry you need to have good and loyal number twos around you."

Chrysler is in the midst of a three-year restructuring aimed at cutting 13,000 jobs in North America. It aims to build more fuel-efficient vehicles and increase sales outside the stagnant US market. Nardelli said he supports the turnaround plan.