GM chairman vows to ‘learn about cars’
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 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 Detroitbased 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, Mich.
“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 recreating itself as a 21st-century car company. They have to have somebody at the top that understands they have to make a new GM.”
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 since 2004.
“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 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.
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.
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 restructuring.
“He’s not one to sit idly by,” Kahan said.
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