UPDATE: Whitacre To Become GM's Chairman After Bankruptcy
09 Juni 2009 - 7:22PM
Dow Jones News
Edward Whitacre Jr., who turned AT&T into the world's
largest telecommunications company as chief executive, will become
chairman of General Motors Corp. (GMGMQ) when the company leaves
bankruptcy, the auto maker said Tuesday.
Whitacre, 67, is known as a straight-talking, no-nonsense
executive with a track record of cutting big deals and working
closely with the U.S. government, skills could that prove critical
for GM as it orchestrates a massive restructuring under close
scrutiny of the U.S. Treasury.
His appointment comes amid a government-ordered overhaul of GM's
board of directors.
Interim Chairman Kent Kresa, charged with recruiting new board
members, said Whitacre had been under consideration since the end
of March, when the Obama administration ousted Rick Wagoner as GM's
chairman and chief executive officer.
"This is a guy who was very innovative, and who took a company
that had a lot of advanced technology and merged it with a company
that didn't have a lot," Kresa said, referring to SBC's acquisition
of AT&T (T) in 2005.
At the time, SBC was pursuing the landline business but Whitacre
saw growth elsewhere, such as broadband and cell phones. Kresa said
Treasury was impressed by what it saw as Whitacre's
forward-thinking mentality and how it may help GM as it races to
undo decades-old patterns and cultures.
GM filed for bankruptcy last week as part of a government-aided
restructuring that will result in sweeping job cuts, benefits
reductions and factory and dealership closings while leaving the
U.S. owning 60% of the company.
Whitacre was chairman and CEO of AT&T and its predecessor
companies from 1990 to 2007, when he retired with a $158 million
package. During his tenure, which began with Southwestern Bell,
Whitacre led the company through a series of mergers and
acquisitions - including the 2005 AT&T acquisition that created
the nation's largest provider of local, long-distance and wireless
services.
Whitacre, in a statement, said he was "honored to be able to
serve GM at this critical juncture and take part in its
reinvention."
Whitacre and Kresa, along with current board members Philip A.
Laskawy, Kathryn V. Marinello, Erroll B. Davis Jr., E. Neville
Isdell and President and Chief Executive Frederick A. Henderson,
will serve as the nucleus of the "New GM" board.
As part of the changes, GM will usher out seven board members,
including longtime directors George Fisher, retired CEO of Eastman
Kodak Co. (EK); and John Bryan, retired CEO of Sara Lee Corp.
(SLE). The company also will look to create a separate board to
oversee the winding down of the "old GM." Kresa said that board is
unlikely to include any current members.
In an interview Monday, Isdell, a GM board member since August,
said the work load for the board has been heavier in recent months
than he expected when he came aboard.
Some weeks, Isdell, currently chairman of Coca Cola Co. (KO),
would spend more than two days sifting through GM documents,
researching restructuring plans and financial data. His independent
research came on top of three conference calls with directors per
week, with some of those lasting as long as three hours.
"Broadly speaking, I've been involved in no turnaround of this
magnitude," he said in an interview, noting that he has spent much
of his career engineering restructuring efforts.
Isdell said that when he got to GM, he found a management team
not able to fulfill its potential given 40 years of "legacy" issues
that had built up and crippled the company's efforts.
"In every organization that struggles, there are good leaders
just waiting for the opportunity to excel."
-By Sharon Terlep, Dow Jones Newswires; (248) 204-5532;
sharon.terlep@dowjones.com; and John D. Stoll, The Wall Street
Journal; john.stoll@wsj.com