A look back at some major CEO flameouts

Published on NewsOK Modified: April 9, 2013 at 4:59 pm •  Published: April 9, 2013
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BOB NARDELLI, CHRYSLER

Nardelli was hailed as an outsider who could help save the U.S. auto industry by private equity firm Cerberus Capital Management, which installed him as the head of Chrysler in August 2007. But Nardelli, who spent most of his career in the executive ranks at GE before leaving to run Home Depot, had no experience in the complex business of auto manufacturing, and it showed.

Instead of investing to improve Chrysler's substandard lineup, Nardelli focused on cutting jobs and closing plants. He alienated suppliers and dealers, who revolted when Chrysler announced plans to close dealerships and stopped financing leases. And he was gaffe-prone, at one point mistakenly telling Wisconsin's governor that an engine plant in his state would remain open.

By the time the financial crisis hit in the fall of 2008, Chrysler was in serious trouble. Nardelli testified before Congress and obtained loans to help the company survive, but it was too late. Chrysler filed for bankruptcy in April 2009. When Chrysler exited bankruptcy that June, Nardelli was out and Fiat CEO Sergio Marchionne took over.

CRAIG HERKERT, SUPERVALU

The grocery store operator brought in Herkert in 2009 with the hopes that the high-ranking former Wal-Mart executive could spark a turnaround for its struggling fortunes. Supervalu, which was one of the country's biggest grocery store operators at the time, was struggling with growing competition at big-box retailers, drugstores and dollar stores.

Under his tenure, Herkert tried positioning Supervalu as a neighborhood store and emphasized low prices. But sales and profitability kept sliding and last summer, the company suspended its dividend and announced plans to potentially put itself up for sale. A few weeks later, Herkert was out.

In January, the company announced that it was selling five of its major chains and focusing on its Save-A-Lot discount stores and smaller regional chains.

KEVIN ROLLINS, DELL

Rollins joined Dell in 1996 and held a variety of roles before becoming CEO in 2004, including chief operating officer, vice chairman and president of Dell Americas.

The company had been struggling with a market glut of low-cost, low-profit PCs and weaker-than-anticipated sales of its pricier, more lucrative desktops and notebooks. In 2006, it lost its No. 1 position in the industry to rival Hewlett-Packard Co.

In addition to disappointing earnings, Dell had recalled more than 4 million potentially flammable notebook batteries made by Sony Corp. in August 2006. The company's accounting practices had come under federal scrutiny as well.

The key parallel between Rollins and Penney's Johnson may have been overpromising. Rollins took the reins of a company doing a little more than $40 billion a year in business and painted pictures of bumping that to $80 billion — which Dell has still not approached.

Rollins stepped down in early 2007. Founder Michael Dell took the CEO job back.

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AP Business Writers Candice Choi in New York, Dee-Ann Durbin in Detroit and David Koenig in Dallas contributed to this report.



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