Former AT&T chairman and CEO Edward Whitacre Jr. would head GM’s board post GM’s bankruptcy protection recovery.
The 67 year old ex AT&T CEO will replace Kent Kresa, though Kresa will continue to serve as the interim chairman of the company till it recovers from bankruptcy. Whitacre was responsible for the company’s sales and acquisitions during his tenure as the CEO and chairman of AT&T and its forerunners from 1990-2007.
Whitacre also serves the Burlington Northern Santa Fe Corp and Exxon Mobil and the railroad company boards.
Whitacre would form an important part of a newly formed board which would include current board representatives Erroll B. Davis Jr., Kathryn V. Marinello, Philip A. Laskawy, E. Neville Isdell, Intermediate CEO Kresa and CEO Fritz Henderson. It is speculated that the rest of the members who represent the board currently would in all probabilities retire.
Whitacre established his name in the industry turning the regional telephone phone corporation Southwestern Bell into the biggest telecom service provider Nationwide breaking the AT&T brand in due course of time.
Victor Schnee, a Telecom industry analyst at Probe Financial opined that he found Whitacre’s anointment outlandish adding that he had carried out a lot of projects successfully in telecom and that was the end of it. He also said that Whitacre came from an old school of thought and merits credit for moving into the wireless business pretty early.
Schnee’s opines that in the long-term, his visions for the telecom industry were no better than that of General Motors. He feels that the wireless technology picked up speed and momentum and provided immense opportunities for growth, and therefore turned out to keep drowning companies like AT&T and Verizon afloat.
Kresa revealed in a concall that he chose Whitacre after the chairman of the Treasury Department Steven Rattner, member of the auto task force referred his name. he added that the government wants to play a very active role in GM’s board selection process, but would like to keep distance from GM’s daily operations. He said that Whitacre’s experience seemed very appropriate to the government.
Candidates who had prior experience in innovation and change and success in such initiates were of special interest to Kresa. He said he was considering candidates who have been part of companies that have experienced drastic changes and the manner in which it addressed the market. He said Leadership qualities are of utmost importance.
During Whitacre’s 17 year term at AT&T and in her former companies, he turned around the company’s growth a small regional telephone service provider to the country’s largest broadband, wireless and traditional phone service provider.
Formerly known as Southwestern Bell followed by SBC Communications, AT&T was a small scale spun off of all the AT&T’s seven spun off units way back in due to the 1984 government’s orderes to split and curb the AT&T monopoly.
Kresa confirmed that another board would be formed salvage the old GM.
According to the new bankruptcy protection program both the U.S. and Canadian governments would own almost 75% of the company. The U.S. government holds a 60% stake and Canadian government holds the rest12.5%. Another 17.5% stake would be held by the UAW and remaining 10% would be held by the bondholders causing the stockholders to completely withdraw.
GM would now try to normalize the compensation for the board members, Kresa said. The board was paid a meager $1/year ever since GM sought loans from the government past year. Although he kept out from specifying what was the normal level of compensation was, ex board members are reported to have received $200,000 a year, and Stock options worth $140,000 of the company’s common stocks.
