AT&T; Replaces Consumer Unit Chief

Putting his first major stamp on AT&T; Corp., new President John R. Walter has replaced the head of the company’s ailing consumer unit with one of its top marketing managers.

Gail J. McGovern, executive vice president of AT&T;’s business markets division, succeeds Joseph P. Nacchio in running the consumer and small business unit.

Walter’s request that Nacchio, a 26-year AT&T; veteran, leave his post is his most forceful action since he was hired two months ago as the future replacement to AT&T; Chairman and Chief Executive Robert Allen.

It shows that Walter is taking charge well before he is scheduled to replace Allen in January 1998 as the head of the nation’s largest long-distance company. Walter said in a telephone interview that he is “basically running the business now.” The action, announced Sunday, also emphasizes that marketing to consumers is being given top priority by AT&T.;

AT&T;’s core long-distance telephone business has stumbled this year, and analysts have said company marketers need to respond forcefully to feisty rivals such as MCI, Sprint and a host of smaller competitors angling for its business.

Walter said he chose McGovern because “she’s demonstrated both the spirit and management style and the leadership that’s required to support the strategy we’re developing.”

“By our own admission, our consumer business is not growing. It’s a tough market, I grant you that.”

Part of the solution, he said, is selling consumers packages of various AT&T; telecommunications services in one contract.

McGovern, 44, is a specialist in marketing such services as telephones, Internet access and wireless communications to a range of businesses, from federal government operations to large global companies. “I plan to use those same types of skills in the new position,” she said in an phone interview.

Nacchio, 47, will become president and chief executive of Qwest Communications Corp., a privately held telecommunications company based in Denver.

Jeffrey Weitzen, 40, vice president and general manager of AT&T;’s Global Services business, will be promoted to succeed McGovern.