NEW YORK (Dow Jones)--Edward Whitacre, who cobbled back together much of telecommunications giant AT&T Inc. (T), will try his hand at revitalizing another American icon as chairman of General Motors Corp. (GMGMQ).
Whitacre, 67, will assume the post when GM emerges out of bankruptcy later this summer. A cowboy from Ennis, Texas, he's a savvy dealmaker with the ability to work with large unions, which should benefit the troubled automotive giant. He also is expected to tap into his experience dealing with the shifting telecom landscape in order to steer GM through the auto industry's own mercurial state.
"It's a very smart pick," said Scott Cleland, chief executive of telecom consulting firm Precursor Group who has known Whitacre for 15 years. "He's somebody who's seen a lot and been through a tremendous amount of change."
There are, however, questions over what a life-long telecom worker - he started in 1963 as a facility engineer at Southwestern Bell - will bring to a car company struggling to shed its ingrained corporate culture. It's also unclear how much influence he'll be able to bring to Chief Executive Fritz Henderson and the government-controlled company, which faces steeper problems than Whitacre has encountered.
But Whitacre is known as a quick study and for his ability to run efficient and organized meetings. He is expected to bring some badly needed focus to GM.
"There won't be any more of those day-long meetings, I assure you that," said James Ellis, the former general counsel to AT&T who worked with Whitacre for nearly two decades. "I think it's a challenge he's certainly up for."
One asset he brings is the ability to negotiate with unions. When Whitacre retired, AT&T employed more union workers - mostly under the Communications Workers of America - than the entire U.S. auto industry.
"He's someone who's been able to straddle the needs of running a profitable business with working well with unions," Cleland said.
Whitacre, however, will be tested when he deals with the United Auto Workers union, a powerful force whose demands have long weighed on U.S. auto makers.
"We wish him well in 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," said Larry Cohen, president of the CWA.
Whitacre's dealmaking abilities, meanwhile, are well-known in the telecom industry. He is credited with rebuilding a large part of the original Ma Bell. Shortly after taking the reins of SBC Communications in 1995, he went on an acquisition spree and scooped up Pacific Telesis, SNET, and Ameritech, culminating in the purchase of AT&T in 2005. A year later, he acquired fellow Baby Bell BellSouth and the remaining stake in Cingular Wireless, putting all of the businesses under the revived AT&T name.
While AT&T's resurrection centered on getting bigger, his goal at GM is likely the opposite - getting trimmer and more efficient. Whether it is buying or selling, Whitacre's dealmaking experience will prove vital as GM looks to divest some of its car lines.
"He's very shrewd about value," Cleland said. "He's a good negotiator. Those skills work whether you're building up or paring down."
Still, the market dynamics are different enough to pose a challenge. While the number of power players in the telecom industry is diminishing, the auto industry is flooded with competitors. In addition, overseas rivals have established their dominance in the U.S., a threat Whitacre never had to deal with at AT&T.
To survive, GM badly needs to instill an attitude of innovation into its car development. Whitacre was known to have had an eye on the future. He drove AT&T's initiative to upgrade its network to offer a faster Internet connection and an Web-based television service. He had coveted BellSouth because it would give AT&T full control of the wireless business, which now drives nearly all of the company's growth.
Some believe Whitacre can bring that push for change to GM, which hasn't been known to move with the times nearly as quickly.
"I think he's the right man at the right time at the right place," Ellis said.
Wall Street Journal
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