"In its first year under Chairman and CEO Bob Nardelli, Chrysler LLC showed it can be aggressive, creative and fast -- but questions remain about whether that will be enough to save the troubled automaker. Cerberus Capital Management LP took over the Auburn Hills automaker and installed Nardelli at the helm a year ago this week, severing a nine-year union with Germany's Daimler AG and making Chrysler the first privately held U.S. automaker in half a century. Auto industry outsider Nardelli, a former top executive at General Electriccar electric jack Co. and CEO of the Home Depot, guided Chrysler through a tumultuous year that included a brief strike by the United Auto Workers and a battle against a slumping U.S. market share while trying to establish a corporate culture and identity for Chrysler after its split from Daimler. Advertisement The challenges ahead for Nardelli could prove even more difficult. Chrysler must solidify its finances and take on the twin tasks of reshaping a truck-heavy lineup and expanding its limited international presence. Chrysler lacks the strengths of rival automakers: Toyota Motor Corp.'s technology; General Motors Corp.'s foothold in high-growth markets; and Ford Motor Co.'s European car portfolio, now headed to the United States. Instead, analysts say the automaker's greatest asset may be its nimble, Nardelli-led management team that answers not to shareholders but to private owners who are not afraid to pull the trigger on a deal -- whether to strengthen, or even dismantle, the company. Under Nardelli, Chrysler has done what it needs to do to survive, including cutting unprofitable models and pushing for quality improvements, said Tom Libby, senior director of industry analysis at Power Information Network, a division of J.D. Power and Associates. ""Mr. Nardelli is an aggressive, straightforward manager that does what needs to be done,"" Libby said. ""Unfortunately the benefits of his actions will take some time before they begin to be seen."" Nardelli says it is up to Cerberus to consider Chrysler's long-term future, but he and his management team are running day-to-day operations and fighting hard to turn things around. Chrysler ""looked squarely into the eyes of adversity"" this past year and is now moving aggressively to respond, Nardelli told reporters last week. Looking to the next year, Nardelli said Chrysler must weather the current economy, meet demands for improved vehicle quality and fuel efficiency, and expand its international partnerships. ""We are shifting as quickly as we can with the products we are manufacturing or through alliances and partnerships to fill some of the voids in our product lineup,"" he said. Cerberus backs execs Nardelli arrived at Chrysler a controversial figure: an executive with no automotive experience who departed the Home Depot with a $210 million payday that drew the ire of shareholders. At Chrysler, he took a $1-per-year salary, with the rest of his compensation tied to performance. He manages Chrysler in the style he learned at General Electric, where he was once a candidate to replace Jack Welch as CEO. He's hosted management seminars aimed at turning Chrysler into a ""leading company"" and held a sales contest among his top 300 managers. He's shown loyalty to those close to him -- including bringing in former Home Depot purchasing chief John Campi and broadening human resources head Nancy Rae's responsibilities to include communications and union relations. Cerberus has approved. ""Cerberus supports Chrysler's leadership team and believes they will continue to do the right things to best position the company through this unprecedented adverse economic environment,"" the firm told The Detroit News in a statement. Cerberus owns an 80.1 percent stake in the automaker; Daimler owns the rest. Despite a 22.8 percent year-over-year sales decline through July, Nardelli says the automaker is on track. As a privately held company, Chrysler is not required to release its financial results publicly. But last week, Chrysler reported a $1.1 billion profit for the first half of the year before deductions for interest, tax and amortization expenses. The number doesn't mean Chrysler is profitable overall, but indicates the company has a relatively strong cash flow. On a net basis, Chrysler Holding LLC, the parent company of Chrysler and its finance arm, lost about $515 million in the first quarter this year. But with the industry being buffeted by the impact of high gas prices and the weak economy, which are dragging down car and truck sales, particularly the big trucks that have been Chrysler's bread and butter, it is difficult for Cerberus, or anyone, to judge Nardelli's performance. ""The industry has obviously declined more than (Cerberus) anticipated -- more than anyone anticipated,"" said Van Conway, senior managing director at Birmingham turnaround firm, Conway MacKenzie & Dunleavy. Still, Chrysler is more troubled than its crosstown rivals by several measures. It's sales are down more, it has little international presence to prop it up, and several analysts say that Chrysler is the most likely to run out of money. And while Cerberus chief Stephen Feinberg is said to have called Chrysler an ""American icon,"" layoffs and plant closures have dampened employee enthusiasm about private, U.S. ownership.""We are not confident in Nardelli at all because of his lack of experience in the automotive industry,"" said Mark Mitchell, a skilled trades worker at Chrysler's Sterling Heights Assembly plant. ""A lot of people here are worried about losing their jobs."" As a private-equity firm, Cerberus is not necessarily committed long-term to a Nardelli-run Chrysler, and could react quickly to market conditions, said Steven Davidoff, a corporate law professor at Wayne State University who studies Cerberus. ""They have to judge where the bottom is and if Chrysler has sufficient assets to make it through,"" he said. If Cerberus sees a clear turnaround plan, it may extend the time it holds onto Chrysler in hopes of making a greater return on its investment. If the long-term outlook is bleak, Cerberus wouldn't hesitate to sell Chrysler, Davidoff said. Cash is concern The first step in any Chrysler turnaround is survival. Several analysts, including Fitch Ratings, question whether Chrysler will make it to its second anniversary under Cerberus before running out of cash. If auto sales stay flat or decline in 2009, a recent Fitch report said Chrysler could reach minimum required cash levels in late 2009. For Chrysler to rebound, it must revamp an ""out-of-touch"" product lineup, J.D. Power's Libby said. Chrysler sales have fallen the most of any major automaker as consumers shun the trucks, SUVs and minivans that account for 74 percent of its sales, according to Autodata Corp. All the vehicles on Chrysler dealer lots today were developed before Nardelli arrived. Management has done what it could quickly. Nardelli spearheaded an effort to make fast improvements, especially to vehicle interiors. Last week, he said Chrysler has made nearly 500 line-item changes to its cars and trucks under his watch. Earlier this year, Chrysler struck a deal with Nissan to bring a subcompact car to the United States and has just launched hybrids -- a pair of large SUVs. But analysts and dealers are anxious to see more vehicles that answer consumers' demand for better fuel-efficiency. Any future for Chrysler will be as a more international company, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. Chrysler is reaching out to partners, including Chinese automakers, in hopes of expanding in growing regions of the world and accessing vehicles that could be sold in this hemisphere. A wider partnership between Auburn Hills and a foreign automaker could allow the companies to share technology costs, lead to higher volume manufacturing and likely allow Cerberus to divest at least part of its interest in Chrysler, Cole said. Despite its problems, Chrysler's chances at long-term viability are stronger than the industry headwinds might suggest. "