Bob Nardelli and the Jack Welch legacy

In 2006, I wrote a post on the possible successors to General Electric Co. (GE) CEO Jack Welch, giving the winner of the succession battle a gentleman's C. Jeff Immelt, who took the baton from Welch, was presiding over a steady decline in GE's stock price -- it's down 70 percent since he took over. Bob Nardelli, another contender who lost to Immelt, had driven Home Depot Inc. (HD) into a ditch with his cost cutting and strategic shift to an unprofitable business. The best of the triumvirate was Jim McNerney, who took over Boeing Co. (BA) and was driving up its stock price quite nicely.

Today, it's clear that Nardelli is the worst of the lot. He wrecked Home Depot by cutting costs to the point that its poorly paid store employees lacked sufficient product knowledge to help customers and store shelves lacked the products customers wanted so they walked across the street to competitors. Not only that, but Nardelli pushed Home Depot into the thin-margin wholesale supply business that tanked along with the housing market.