1. Welcome to CowboysZone!  Join us!  Come on!  You know you want to!

New GM Chairman declares: 'I don't know anything about cars'...

Discussion in 'Political Zone' started by JBond, Jun 10, 2009.

  1. JBond

    JBond Well-Known Member

    6,726 Messages
    36 Likes Received
    New GM Chairman declares: 'I don't know anything about cars'...


    June 10 (Bloomberg) -- 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 yesterday 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 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 Whitacre “a good choice,” said Jim Hall, principal of 2953 Analytics auto-consulting firm in Birmingham, Michigan.

    “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 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.”

    Talking With Rattner

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

    In addition to Kresa, the automaker’s new, 13-member board will include five holdovers -- CEO 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.

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

    Treasury, Congress

    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 hearing where U.S. senators pressed him about the alleged sharing of data with a spy agency, Whitacre was rebuked by then- 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. 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.

    No Sitting Around

    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.

    After graduating from Texas Tech University in Lubbock in 1964, Whitacre joined AT&T’s Southwestern Bell unit just as the touch-tone phone was being introduced. He worked his way up to CEO in 1990 and bought Pacific Telesis Group in California for $16 billion in 1997.

    That was the first link-up among the eight Baby Bells, created in 1984 after then-AT&T Corp. agreed to cede local phone operations, and started a buying spree that totaled almost $200 billion and helped create the largest U.S. phone company.

    “He started the whole telecom consolidation because he recognized that scale was going to be important,” said Jim Ellis, 66, a former general counsel at AT&T, who worked with Whitacre for about 30 years. “He had a vision to build the company, to increase the sales and the size, the efficiency.”

    Building a Bell

    SBC, the smallest of the local Bells, changed its name to AT&T Inc. after it bought AT&T Corp. in 2005 for $16.5 billion and in 2006 had its first annual share-price gain in eight years. A year after Whitacre retired, AT&T relocated to Dallas, near his hometown of Ennis, from San Antonio.

    The ability to sustain a “global enterprise” and set clear lines of responsibility is pivotal to GM’s future, said Michael Robinet, an automotive analyst at CSM Worldwide Inc. in Northville, Michigan.

    “Let’s face it: The chairman is not necessarily operational,” Robinet said. “The chairman is about ensuring a strategy is followed.”

    GM is proposing to sell its best assets to create a new company around its Chevrolet, Cadillac, GMC and Buick brands within 90 days. The remaining assets will be liquidated in bankruptcy to help pay off creditors.

    Whitacre, a resident of San Antonio, a South Texas city of 1.2 million, will set a different cultural and geographic tone at GM, said Kahan and Ellis, the former AT&T executives.

    Detroit is 1,237 miles to the northeast, almost twice as far as to Mexico City. While GM’s only Texas assembly plant is in Arlington, a five-hour drive, San Antonio is home to a pickup factory for Toyota Motor Corp., which ended GM’s 77-year reign as the world’s largest automaker in 2008 and beat GM in adopting new models such as hybrids.

    As a “man of action,” Whitacre won’t sit still, Kahan said. “He doesn’t like long meetings,” Kahan said. “He’ll be fresh air.”

    To contact the reporters on this story: Amy Thomson in New York at athomson6@bloomberg.net; Katie Merx in Southfield, Michigan, at kmerx@bloomberg.net

    Last Updated: June 10, 2009 00:01 EDT
  2. Doomsday101

    Doomsday101 Well-Known Member

    78,057 Messages
    3,535 Likes Received
    And why would he? He has no back ground in the industry. Only question I have with this Obama selection is did Edward E. Whitacre Jr. his taxes?
  3. CowboyWay

    CowboyWay If Coach would have put me in, we'd a won State

    4,171 Messages
    31 Likes Received
    I'd venture to bet that most high level CEOs know very little about the products thier company's build. They have people for that. CEO's are numbers guys. Sad but true.
  4. ninja

    ninja Numbnuts

    5,788 Messages
    682 Likes Received
    Only an idiot would buy a government/UAW-owned, bankrupt GM car with a CEO who knows nothing about cars.

    And, I'll bet the next head of the soon-to-be government run healthcare will know nothing about healthcare.
  5. Temo

    Temo Active Member

    3,728 Messages
    18 Likes Received
    GM's greatest problems have nothing to do with its cars, marketing, or engineering or any of that stuff the media spews.
  6. iceberg

    iceberg detoxed Zone Supporter

    28,278 Messages
    1,297 Likes Received
    on one hand i agree. on the other, business is business and it's also a huge part in having people you trust help make those decisions.

    in the 80s we had bean counters building cars. they sucked.

    i have no idea if we're about to repeat that process but the 80s are coming back musically so who knows, maybe it's time for cars to suck again.
  7. Doomsday101

    Doomsday101 Well-Known Member

    78,057 Messages
    3,535 Likes Received
    I don't think US car manufactures can afford that because the outside competition is not going to produce poor cars which is why they surpassed us. I think you have to produce what the consumer wants not what Obama wants or any other politician. However considering the car companies sold their soul to the devil they will have to do as he wants
  8. vta

    vta The Proletariat

    8,746 Messages
    5 Likes Received
    But it's worth considering, isn't 'business is business' what got us here in the first place? People under the impression they can apply general swatches of wisdom on any product and it'll simply work?

    I know it's not a popular refrain, but American cars have been less than spectacular for years, because 'business is business'. Make parts that wear out quicker and you can sell the replacement. Cheap parts, high prices, it's a no lose situation, for a while. Until the industry is on it's face gasping for air and looking for government handouts.

    Maybe if the people who knew cars were in control from top to bottom, there'd be something worth buying and a company worth returning to for your next car or for your kid's car or your wife's car.

    I have no empty a bias. I bought a new Acura because my last one performed well past all expectations of a car, with a pretty flippant routine maintenance attitude. That's customer return, based on performance. My American car buying days died long ago with bad experiences.
  9. theogt

    theogt Surrealist Zone Supporter

    44,006 Messages
    1,100 Likes Received
    Not true at all. Most CEOs can spit out every little fact about their company at the drop of a hat.
  10. TheCount

    TheCount Pixel Pusher

    21,140 Messages
    1,113 Likes Received
    Yeah, cause the people that knew so much about the auto industry did so well before him.
  11. vta

    vta The Proletariat

    8,746 Messages
    5 Likes Received
    Did they? I honestly don't know, were they businessmen or were they specific to the industry? If so, it wouldn't be surprising that they would be influenced by a system regardless. A system of money making that relies heavily on the current buyer just as much if not more than the new buyer.

    The Computer industry is doing a bang up job of following this system right now.
  12. iceberg

    iceberg detoxed Zone Supporter

    28,278 Messages
    1,297 Likes Received
    then why is obama telling the car companies what to make?

    does obama know about cars? he's doing more in all this than the at*t exec we're ragging on.
  13. iceberg

    iceberg detoxed Zone Supporter

    28,278 Messages
    1,297 Likes Received
    no, i agree. that's why i said in the 80s bean counters made cars and they sucked. i don't see putting someone in charge who doesn't know any better as a valid move for this time we're in.

    that said, if no car experience can keep someone out of running the show, why is obama in it?
  14. iceberg

    iceberg detoxed Zone Supporter

    28,278 Messages
    1,297 Likes Received
    can you tell me who made this argument? well, that they did? i don't see that being the case.
  15. Doomsday101

    Doomsday101 Well-Known Member

    78,057 Messages
    3,535 Likes Received
    I agree it is a mistake but once they took the cash they fell at to the mercy of Obama. Seems the unions made out well after all you had the head of the union claiming GM could not go bankrupt because who would buy a car from a company in bankrupcy now the same guy is say GM is strong enough to make it. My how his tune changed when they got the deal they wanted in the meantime the stockholders are told to suck eggs and are the loser in this.
  16. vta

    vta The Proletariat

    8,746 Messages
    5 Likes Received
    :laugh2:
    That's another whole topic right there, what is he doing running the show?
    But I don't think we've had any worthy politicians for quite some time, so that's just par for the course of an apathetic generation.
  17. Aikbach

    Aikbach Well-Known Member

    9,722 Messages
    39 Likes Received
    You'd be surprised how many studio executives don't know anything about movies...well maybe you wouldn't, you'd be alarmed how many officers are dumb as posts, macabrely their kind are weeded out by the natural course of events if you catch my drift; a dumb second lieutenant does not have a long combat life.
  18. vta

    vta The Proletariat

    8,746 Messages
    5 Likes Received
    Oh it's written pretty clearly just how bad 'business' has infected the art of movie making. If one in ten are worth watching, that's a high number.
  19. TheCount

    TheCount Pixel Pusher

    21,140 Messages
    1,113 Likes Received
    I don't even understand what you're asking me...
  20. burmafrd

    burmafrd Well-Known Member

    41,766 Messages
    1,657 Likes Received
    I'd venture to bet that most high level CEOs know very little about the products thier company's build. They have people for that. CEO's are numbers guys. Sad but true.

    That is what you said count.
    So back it up or admit you were talking out your butt.

Share This Page