SURGEON NARDELLI

Over my forty years as a GE student, I have concluded that in the past 30 years GE's leaders great skill is being able to do "sound surgery" of sick businesses. In some cases, the surgeon moved from the "emergency operation" to "plastic surgery"...

When Bob Nardelli took over Chrysler, I concluded that he would have trouble pulling off this transition... but the November 26, 2007 Fortune article had made me reexamine by first conclusion. Bob is clearly following the "surgeon" course.

The article describes that he has segmented the company into winners and losers. This is sound GE tradition... "he started immediately poking his nose everywhere."..he drives a different car every day to work...When sales started to decline... he closed six plants...In November, he announced over 10,000 additional layoffs... He took the short term financial hit.. which is a GE tradition designed to set the expectations low and then easily exceeding them. Wall Street always seems to believe that upward moves are the best, and they often forget that if the base is low...multiple growth rates are easier, than if they are high... it is the "numerics" game.

If his predictable "surgery" is success... Bob will be a "savior".

If it fails he will carve up the company into pieces and sell off each piece separately. Most often the pieces of any company are worth than the total, especially if the company is too broad and has tried to be "all things to all people".. one of the reasons that the US auto companies are having the trouble they are experiencing.


Bob is a "honor student" of the best College of Surgeons- GE and we will see if he can pull off this major challenge of turning around the #3 and most often the LOSER of the US auto game.

Stay tuned... your comments are welcome...