Big Ed, the ‘New GM’ Board Chair, says “I don’t know anything about cars”; Vows to ‘Learn About Cars’ on the job
(Source: 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 ChairmanKent 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 new GM.”
“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 announced his retirement in 2007, 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.
“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 efficiency.”
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.
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. 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.”
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