- The Washington Times - Thursday, June 11, 2009

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 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,” Mr. Whitacre, 67, said Tuesday 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.”

Mr. 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 to 1995. Mr. Whitacre will take the post when Detroit-based 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 Mr. 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 landline phone service,” said Mr. Hall, a former GM engineer. “There’s a parallel with General Motors. GM is not now about just making cars. It’s about re-creating 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,” Mr. 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 Obama’s car task force, said Mr. 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.”

Mr. Whitacre is “well-qualified” for the GM post, the Treasury said in a statement.

In addition to Mr. Kresa, the automaker’s new, 13-member board will include five holdovers - Chief Executive Officer Frederick A. “Fritz” Henderson and directors Philip A. Laskawy, Kathryn V. Marinello, Erroll B. Davis Jr. and E. Neville Isdell. Six others will retire, including all four who were appointed in the 1990s.

Mr. Rattner asked former CEO Rick Wagoner to cede his job to Mr. Henderson and named Mr. Kresa interim chairman in March after rejecting GM’s plan to return to profit.

Mr. 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.

In 2006, while defending AT&T;’s customer-privacy policy at a Senate Judiciary Committee hearing where senators pressed him about the purported sharing of data with a spy agency, Mr. Whitacre was rebuked by Chairman Arlen Specter for “contemptuous answers.”

A year later, AT&T; management prevailed on a shareholder proposal seeking an advisory role in executive pay, which got 44 percent of the vote. Mr. Whitacre announced his retirement at that meeting, leaving with compensation valued at $158.5 million, according to the Corporate Library in Portland, Maine.

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 Mr. Whitacre for 20 years and talked to him about the job the night before it was announced, predicted his old boss would probably be heavily involved in GM’s restructuring.

“He’s not one to sit idly by,” Mr. Kahan said. As a “man of action,” Mr. Whitacre won’t sit still. “He doesn’t like long meetings,” he said. “He’ll be fresh air.”

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