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Published: Saturday, 9/8/2007

Cerberus on Chrysler hiring spree

Chrysler CEO Robert Nardelli
talks about the firm s future. Chrysler CEO Robert Nardelli talks about the firm s future.

DETROIT - In its first five weeks of owning Chrysler LLC, Cerberus Capital Management LP has gone on a hiring binge, signing up a chief executive, poaching Toyota Motor's respected North American chief, enticing a top marketing exec from Lexus, and snagging a former General Motors Corp. official with a background in globalization.

Management experts and executive recruiters said the spree probably isn't over, as the New York private equity firm lures talent with the promise of riches once the ailing Chrysler is fixed and sold.

"This is a classic private equity turnaround," said James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago graduate school of business. "Step one: Buy it cheap. Step Two: Find the very best people in the world to fix it. Step Three: Get it back on the public market."

It's in the resale where the very best people get their payoff, if they can raise the value of Chrysler well beyond the $7.4 billion deal in which Cerberus acquired 80.1 percent of the company from DaimlerChrysler AG last month.

The possibility of big money, based on the company's performance, is likely what led Jim Press, Toyota's top North American executive, to gamble on Chrysler. He ends a wildly successful 37-year career with what many believe to be the best-run auto company in the world.

Chrysler announced Thursday that Mr. Press, 60, would become vice chairman and president in charge of sales, marketing, and product strategy, areas in which Toyota excelled under his leadership.

Yesterday, the firm turned to China, hiring SAIC Motor Corp.'s Phil Murtaugh as chief executive of its Asian operations. Mr. Murtaugh, a former GM executive, will help Chrysler expand in fast-growing global markets where it has little presence.

The hires, Mr. Schrager said, likely were made by Cerberus leaders in concert with the man they picked as Chrysler Chairman and CEO, Bob Nardelli, formerly head of Home Depot Inc.

Hiring Mr. Press and Mr. Murtaugh are signs Mr. Nardelli is becoming less autocratic than he was at Home Depot, said Jeffrey Sonnenfeld, senior associate dean at the Yale school of management.

At Home Depot, he had a lot of yes men, Mr. Sonnenfeld said. "Now you're going to have people who will be challenging him."

Industry observers don't think Cerberus and Mr. Nardelli are done hiring, either, although the CEO told reporters yesterday there would be no more surprises.

As Chrysler and Cerberus look for executives, look for some of Chrysler's top talent to leave as well, said Chris Clarke, president and CEO of Boyden World Corp., an executive recruiting firm.

"Executive searchers circle such firms like vultures, seeking to dive on well-proven, unsettled talent," he said.

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