GM picks ex-chief of AT&T as chairman
Edward E. Whitacre Jr., the newly anointed chairman of General Motors Corp., isn’t exactly what you’d call a car guy.
The blunt-talking Texan spent his entire professional career in the telecommunications business, where he turned a small regional phone company into the nation’s largest carrier, AT&T; Inc.
But some who have worked with Whitacre say he possesses qualities that should make up for his lack of auto industry experience.
“It’s a brilliant choice,” said Roger C. Altman, who was a deputy Treasury secretary in the Clinton administration. “If you know Ed well, you know he’s astute, exceedingly practical, very decisive and he inspires confidence.”
Whitacre also was a familiar figure in the halls of Congress, where he bent the ears of lawmakers over telecom issues.
Whitacre, 67, was named Tuesday as the eventual successor to Kent Kresa, who took control of GM’s board when Rick Wagoner, the former chairman and chief executive, was forced out by the Obama administration in late March. Whitacre will assume the role when GM exits Chapter 11 bankruptcy protection, which the company hopes to do by early September.
“I am honored to be able to serve GM at this critical juncture and take part in its reinvention,” Whitacre said in a statement.
As chairman, Whitacre won’t necessarily take a hand in the automaker’s day-to-day operations. That task is likely to remain with current Chief Executive Fritz Henderson, the longtime GM executive who succeeded Wagoner as chief.
If anything, Alan Mulally’s performance at Ford Motor Co. since taking over as CEO in September 2006 has helped quash the idea that only experienced auto industry types should be running car companies, said Rebecca Lindland, an analyst with consulting firm IHS Global Insight. Mulally was a long-serving executive at aerospace giant Boeing Co. before moving to Ford.
“The old-school thinking is, ‘Whitacre doesn’t have any automotive experience,’ ” Lindland said. “But the new-school thinking is, ‘Neither did Alan Mulally, and he’s done a fantastic job at Ford.’ ”
Not everyone agrees with that line of thinking. For one thing, Chrysler’s decision to tap former Home Depot CEO Robert Nardelli as its chief executive in August 2007 didn’t keep that carmaker out of bankruptcy.
In addition, even though Whitacre comes from outside Detroit, he isn’t known for emphasizing the kind of consumer-focused thinking that GM desperately needs right now, said Jeremy Anwyl, CEO of automotive website Edmunds.com.
“He’s a good choice, but a more conventional choice,” Anwyl said. “GM had a chance to send a message that it’s not going to be business as usual, that we’re really going to shake things up -- and here’s the first piece of evidence.”
Based on his record at AT&T;, Whitacre’s skills lean more toward deal-making than product development.
In 1990, he took over as chairman and CEO of Southwestern Bell Corp. -- then the smallest of the seven Baby Bells created by the breakup of the original AT&T; Corp. -- and built it through acquisitions into the largest phone company in the nation. His deals included the 1997 purchase of Pacific Telesis Group, parent of Pacific Bell.
Whitacre’s role as head of California’s dominant local phone provider didn’t endear him to some consumer groups.
“From the consumer perspective, it wasn’t really warm and fuzzy,” said Mindy Spatt, spokeswoman for the Utility Reform Network, a San Francisco consumer advocacy group.
But Whitacre, the son of a railroad worker and union activist, gets high marks from some labor leaders, despite a brief 2004 strike against his company by the Communications Workers of America. The CWA leadership called Whitacre an inspiration to its members.
“We wish him well at GM and believe he will be the same unifier and visionary there as our nation recommits to U.S. manufacturing and the automotive industry in particular,” CWA President Larry Cohen said in a statement.
Whitacre is known as an effective lobbyist adept at working the levers of power in Washington and elsewhere -- a skill that clearly should prove useful at the wheel of GM, which is expected to emerge from bankruptcy with the federal government as its largest shareholder.
More than two-thirds of Whitacre’s personal political donations have gone to Republican candidates. He served on George H.W. Bush’s second presidential campaign and served as a Pioneer in George W. Bush’s 2004 campaign, which means he raised at least $100,000 for the candidate.
GM will select four directors in addition to Whitacre, and the United Auto Workers union and the government of Canada will each pick one. Kresa, Henderson and four other current members will stay on the board; six will depart, including George Fisher, the former head of Eastman Kodak Co. and until recently the lead outside director at GM.
The board will have 13 members, as it does today.
Kresa, a former chairman of Northrop Grumman Corp., has said the Obama administration’s auto task force would have to authorize the choice of all new board members, including the new chairman.
Whitacre also serves on the boards of Exxon Mobil Corp. and Burlington Northern Santa Fe Corp. A GM spokeswoman said the automaker’s directors, including the chairman, are paid $200,000 annually, at least 70% of which is in stock. It’s not clear how the board will be paid after GM exits bankruptcy and before it begins trading as a public company again.
Whitacre was criticized by corporate-governance watchdogs for receiving a severance package valued at $158.5 million when he retired from AT&T; in June 2007.
“He would qualify as an independent director,” said Paul Hodgson, a pay expert at the Corporate Library, a corporate-governance research firm.
“Let’s hope he’s not sitting on the compensation committee.”
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ken.bensinger@latimes.com
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BEGIN TEXT OF INFOBOX
Edward E. Whitacre Jr.
Age: 67
New job: Chairman of General Motors Corp.
Previous job: Chairman and chief executive of AT&T; Inc. and its predecessor companies, 1990-2007
Education: B.S. in industrial engineering, Texas Tech, 1964
Other: President of Boy Scouts of America, 1998-2000
