Shouldn't be long before the "new" CEO drives GM to the point where is
needs a bailout just like the old GM. What losers.
Whitacre Vows to ‘Learn About Cars’ as Chairman of New GM Board
June 10 (Bloomberg) -- Edward E. Whitacre Jr. built AT&T Inc. into the
biggest U.S. provider of telephone service over a 43-year-career. By his
own admission, he becomes chairman of General Motors Corp. knowing
nothing about the auto industry.
The 6-foot-4-inch Texan nicknamed “Big Ed” said steering the nation’s
largest automaker after bankruptcy is “a public service.” People who
know him say he can meet GM’s need for the type of transformation he
orchestrated at Dallas-based AT&T.
“I don’t know anything about cars,” Whitacre, 67, said yesterday in an
interview after his appointment. “A business is a business, and I think
I can learn about cars. I’m not that old, and I think the business
principles are the same.”
Whitacre’s selection bucks more than a half-century of tradition at GM,
where the only non-executives to lead the board since 1937 were interim
Chairman Kent Kresa and John Smale, who held the job from 1992 through
1995. Whitacre will take the post when Detroit-based GM exits Chapter
11, perhaps by Aug. 31.
A bachelor’s degree in industrial engineering and record in shaping a
“monolithic” AT&T into a diversified enterprise make Whitacre “a good
choice,” said Jim Hall, principal of 2953 Analytics auto-consulting firm
in Birmingham, Michigan.
“He was one of the guys who helped create a new AT&T that wasn’t so
dependent on land-line phone service,” said Hall, a former GM engineer.
“There’s a parallel with General Motors. GM is not now about just making
cars. It’s about re-creating itself as a 21st-century car company. They
have to have somebody at the top that understands they have to make a
Talking With Rattner
The U.S. Treasury, which is backing GM’s restructuring with about $65
billion, reached out “some weeks ago,” Whitacre said, enticing him out
of retirement to help oversee a company that has lost almost $88 billion
“Lots of conversations” followed with Steven Rattner, the Wall Street
dealmaker running President Barack Obama’s car task force, said
Whitacre, adding that Treasury’s message was: “We need your help. It’s a
great company. You could be a lot of assistance to GM.”
Whitacre is “well qualified” for the GM post, the Treasury said in a
In addition to Kresa, the automaker’s new, 13-member board will include
five holdovers -- CEO Fritz Henderson and directors Philip A. Laskawy,
Kathryn V. Marinello, Erroll B. Davis Jr. and E. Neville Isdell. Six
others will retire, including all four who were appointed in the 1990s.
Rattner asked former CEO Rick Wagoner to cede his job to Henderson and
named Kresa interim chairman in March after rejecting GM’s plan to
return to profit.
Whitacre will have to contend with Treasury’s oversight, as the biggest
equity holder in the so-called New GM, and pressure from Congress. He
has faced lawmakers and investors before.
where U.S. senators pressed him about the alleged sharing of data with a
spy agency, Whitacre was rebuked by then- Chairman Arlen Specter for
A year later, AT&T management prevailed on a shareholder proposal
seeking an advisory role in executive pay, which got 44 percent of the
vote. Whitacre announced his retirement at that meeting, leaving with
compensation valued at $158.5 million, according to the Corporate
Library in Portland, Maine.
GM’s directors are now working for $1 a year. The automaker plans to
disclose board compensation terms when it announces the rest of the new
members, said Julie Gibson, a spokeswoman.
No Sitting Around
James Kahan, 61, a former AT&T executive who worked with Whitacre for 20
years and talked to him about the job the night before it was announced,
predicted his old boss will probably be heavily involved in GM’s
“He’s not one to sit idly by,” Kahan said.
After graduating from Texas Tech University in Lubbock in 1964, Whitacre
joined AT&T’s Southwestern Bell unit just as the touch-tone phone was
being introduced. He worked his way up to CEO in 1990 and bought Pacific
Telesis Group in California for $16 billion in 1997.
That was the first link-up among the eight Baby Bells, created in 1984
after then-AT&T Corp. agreed to cede local phone operations, and started
a buying spree that totaled almost $200 billion and helped create the
largest U.S. phone company.
“He started the whole telecom consolidation because he recognized that
scale was going to be important,” said Jim Ellis, 66, a former general
counsel at AT&T, who worked with Whitacre for about 30 years. “He had a
vision to build the company, to increase the sales and the size, the
Building a Bell
SBC, the smallest of the local Bells, changed its name to AT&T Inc.
after it bought AT&T Corp. in 2005 for $16.5 billion and in 2006 had its
first annual share-price gain in eight years. A year after Whitacre
retired, AT&T relocated to Dallas, near his hometown of Ennis, from San
The ability to sustain a “global enterprise” and set clear lines of
responsibility is pivotal to GM’s future, said Michael Robinet, an
automotive analyst at CSM Worldwide Inc. in Northville, Michigan.
“Let’s face it: The chairman is not necessarily operational,” Robinet
said. “The chairman is about ensuring a strategy is followed.”
GM is proposing to sell its best assets to create a new company around
its Chevrolet, Cadillac, GMC and Buick brands within 90 days. The
remaining assets will be liquidated in bankruptcy to help pay off creditors.
Whitacre, a resident of San Antonio, a South Texas city of 1.2 million,
will set a different cultural and geographic tone at GM, said Kahan and
Ellis, the former AT&T executives.
Detroit is 1,237 miles to the northeast, almost twice as far as to
Mexico City. While GM’s only Texas assembly plant is in Arlington, a
five-hour drive, San Antonio is home to a pickup factory for Toyota
Motor Corp., which ended GM’s 77-year reign as the world’s largest
automaker in 2008 and beat GM in adopting new models such as hybrids.
As a “man of action,” Whitacre won’t sit still, Kahan said. “He doesn’t
like long meetings,” Kahan said. “He’ll be fresh air.”