US: New Chrysler CEO would support rate cut
Chrysler's new chief executive Robert Nardelli has said a cut in interest rates would help re-energise the sluggish US economy though he did not think the current housing market-related turmoil in global financial markets had had a direct effect on the car industry and consumers.
According to an AFX News/Thomson Financial Report, one-time Hope Depot chairman Nardelli, who joined as Chrysler's CEO last week, said he would have no problem endorsing an interest rate reduction by the US Federal Reserve in the wake of the troubles in the housing market there, which have, in turn, led to financial turmoil in markets around the world.
The report noted that Nardelli was one of the first executives of a non-financial company to call for an adjustment in rates.
"I don't think it had a direct impact" on the car industry and consumers, he told Thomson Financial of the turmoil in the markets. "But it had a psychological impact."
Nardelli reportedly noted Chrysler rivals General Motors, Ford and Toyota have all reduced market forecasts for the rest of 2007 and now expect slower sales.
"I think there is a natural tendency to pull back," he said, according to the report. "Expenses become scrutinised and then deferred.
"Let's see what happens. Let's see what the Fed does with rates. If inflation continues to moderate, maybe we'll see something from the Fed.
"But certainly I would say we should be looking at that to get some confidence, some consumer confidence back and to get some energy back into the markets and some cash back into the markets, which would be good for all of us," he was quoted as saying during a brief meeting with reporters.
"No one was more sensitive to the housing industry than I was for six years," said Nardelli, who, Thomson Financial noted, previously ran the huge Home Depot chain of large-item hardware and construction materials stores.
Nardelli was also reported to have said Chrysler has adequate resources to execute its turnaround plan and does not foresee any need to cut capital spending to conserve cash.