Cerberus Capital Management has named controversial former Home Depot chief executive Robert Nardelli as chairman and chief executive of Chrysler in a shake-up just one business day after the private equity firm completed a deal to acquire the struggling US carmaker.

Chrysler's current chief executive, Tom LaSorda, will stay on as president and vice-chairman and continue to lead ongoing talks with the United Auto Workers (UAW) union.

"Chrysler has many deeply talented and dedicated people, and I am confident that together we can continue the momentum of Chrysler's recovery and return this great American icon to a path for global growth and competitiveness," said Mr Nardelli.

The leadership reshuffle comes after Cerberus closed its $7.4 billion (€5.35 billion) acquisition of an 80.1 per cent stake in Chrysler from former parent Daimler on Friday, and underscored the speed at which the private equity firm was moving to rescue the loss-making car manufacturer.

The changes come at a sensitive time for Chrysler, which is locked in negotiations with the UAW aimed at reducing its hourly labour costs to make it competitive with Japanese rivals.

In Mr Nardelli, Chrysler is getting a former senior General Electric executive, who was both credited with overhauling purchasing and technology systems at Home Depot and widely criticised for pay and severance packages seen as excessive. He received a severance package valued at $210 million, including $20 million in cash, when he left Home Depot in January. He has agreed to take the Chrysler job for a $1 per year salary, with further compensation tied to the success of the automaker's turnaround.

Chrysler lost $680 million last year and has said it will remain unprofitable until 2008 as it restructures by cutting 13,000 jobs.