UPDATE: Chrysler's New Era Begins Under Nardelli

Robert Nardelli presented a congenial image of himself in his first appearance as head of Chrysler LLC, but analysts predict the hard-charging former Home Depot Inc. chief executive soon will crank up pressure to cut costs and increase revenue on behalf of Chrysler's new majority owner, Cerberus Capital Management LP. "We have the ability to move with speed; we have the ability to move with flexibility," said Mr. Nardelli, Chrysler's new chairman and chief executive, during a news conference yesterday at Chrysler headquarters in Auburn Hills, Mich. The company may be able to move quickly to "monetize some assets" that may not be fully valued, Mr. Nardelli said in a possible reference to asset sales. He didn't elaborate. Mr. Nardelli comes to Detroit carrying baggage from a messy exit this year from Home Depot, where he left after failing to reignite its slowing sales and sagging stock price. He also came under attack for his $210 million exit package. A Chrysler turnaround could redeem his reputation. People familiar with the matter say Mr. Nardelli lobbied Cerberus aggressively for the CEO job. Mr. Nardelli will receive a nominal salary of $1 a year, according to people familiar with the matter. He will receive equity to ensure he is compensated only if the company improves, these people said, though they wouldn't disclose further terms. Mr. Nardelli spent much of his first day on the job reaching out to reassure constituents who could make or break his tenure. Among them: United Auto Workers President Ron Gettelfinger, a group of Chrysler dealers and Chrysler employees, starting with Chrysler Vice Chairman and President Tom LaSorda, whom Mr. Nardelli will succeed as CEO. During the news conference, Mr. Nardelli often put a hand on Mr. LaSorda's shoulder, deferring to him to answer questions from reporters. But people who know how Cerberus and Mr. Nardelli operate say they expect Mr. Nardelli will soon push for further cost cutting and additional efforts to streamline operations, while looking for new revenue opportunities for the ailing company. "Chrysler is a huge investment for Cerberus, and it didn't want to take any chances," a person familiar with the matter said. Chrysler spokesman Mike Aberlich said Mr. Nardelli's aggressive style is an asset for Chrysler. "Being a disciplinarian is a good thing because we have a plan, but we really have to execute it, and that's what Bob brings to the table," he said. Jeffrey Sonnenfeld, a senior associate dean at Yale University's School of Management, said Mr. Nardelli "works 24/7 and expects that of his people." In stressing execution, "he goes for obedience and loyalty," Mr. Sonnenfeld added. Mr. Nardelli said yesterday he has no plans to launch a new strategy at the ailing auto maker but will focus instead on executing a restructuring plan already in place. He also said it would be premature to discuss cutting costs further and added that the focus won't just be on "head count but also on head content," and part of his job will be to make sure that employees are utilized to their fullest potential. Chrysler's restructuring plan -- put together by Mr. LaSorda, who retains his title as Chrysler president -- calls for eliminating 13,000 jobs and making a $3 billion investment in engine systems with improved fuel economy. The company also plans to close its Newark, Del., factory and will eliminate shifts at other plants. Some analysts are skeptical that Mr. Nardelli really intends to do nothing more than execute his predecessor's plan effectively. Erich Merkle, an auto analyst with auto-industry research firm IRN, said he expected Mr. Nardelli was brought in to "slash and burn" at Chrysler, cutting costs and streamlining operations. The results from that effort, and crucial products such as Chrysler minivans and a redesigned Dodge Ram pickup truck that is slated to hit showrooms next year, should produce profit for Chrysler, he said. Mr. Merkle said he expects the new owners to prepare Chrysler for a quick sale to another buyer. Since the sale of an 80.1% stake in Chrysler was announced in May, Cerberus has said it will be a long-term investor, and Mr. Nardelli said he has no plans to leave Chrysler. The biggest and most immediate problem facing Chrysler, the smallest of the three unionized Detroit auto makers, is the UAW. Chrysler, Ford Motor Co. and General Motors Corp. recently began talks with the UAW toward a new national agreement in September. The auto makers want to restructure more than $90 billion in health-care debts owed to UAW retirees. Messrs. Nardelli and LaSorda spoke to Mr. Gettelfinger, the UAW president, for two hours about the management change. During that meeting, Mr. Nardelli said, the union leader brought up his Home Depot exit package, which angered shareholders in the home-improvement retailer who felt the compensation was undeserved, given the performance of the company. Mr. Gettelfinger spoke briefly to employees after the news conference, saying, "We want to add our welcome to Mr. Nardelli as chairman and CEO." Mr. Nardelli said he hoped he could establish a relationship with the UAW based on mutual trust and emphasized that Mr. LaSorda will continue to lead the negotiations with the UAW this summer. Mr. Nardelli also said he hoped the controversy surrounding his exit package wouldn't be an issue or a stumbling block, especially when it comes to the UAW talks. "The last thing I would want to be is a distraction," Mr. Nardelli said. Also on Mr. Nardelli's list of meetings yesterday was a group of Chrysler dealers. Chrysler executives have acknowledged the company has far too many dealers for its diminished share of the U.S. market, and it has begun taking steps to cull low-performing stores. But state franchise laws, which protect dealers, hinder any effort by Chrysler to quickly narrow its retail network. "He has to fix the retail supply chain," said Mike Jackson, chief executive of AutoNation Inc., the nation's biggest auto retailer by locations and sales. In addition to narrowing the number of Chrysler dealerships, Mr. Jackson said, the "next step is produce and configure vehicles the way the marketplace wants them." Invigorating Chrysler's lineup includes developing fresher-looking vehicles as well as updating aging technology and fixing quality problems that have undermined the company's brand image. Chrysler badly needs to devise a better strategy for designing vehicles that "people will buy at full price," said James E. Schrager, an auto-industry specialist and a professor of strategic management at the University of Chicago's Graduate School of Business. But "that's where Nardelli has the longest shot."