BUSINESS

Nardelli: Pedal To The Metal At Chrysler

03/28/2008 02:45 am ET | Updated May 25, 2011

Everyone figured changes were coming when Cerberus bought Chrysler and put former GE executive Bob Nardelli in charge last August. But no one could have guessed how many - and how fast.

In the past few days, Nardelli has taken on two of his most powerful business partners - his suppliers and his dealers. And while his bold moves rattled traditionalists, he likely was assembling more of the pieces in an entirely new - and hopefully more profitable - business model.

Step one was putting the supplier community on notice that Chrysler isn't willing to subsidize failing companies. After it and other automakers were burned by the bankruptcy of parts supplier Collins & Aikman last year to the tune - according to some estimates - of a hundred million dollars, Nardelli said enough is enough.

So when plastic parts make Plastech came to him asking for yet another subsidy - as well as a price increase - Nardelli terminated all of Chrysler's purchase orders and tried to pull his tools out of Plastech's plants. Although a bankruptcy judge intervened to blockade Chrysler's trucks, Nardelli had made his point. Chrysler's other troubled suppliers - and there may be two dozen or more - have been put on notice. Either they perform as they have contracted to do, or Chrysler will move the business.

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