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New GM Chair Knows Nothing About Cars

From Bloomberg:

Whitacre Vows to ‘Learn About Cars’ as Chairman of New GM Board

By Amy Thomson and Katie Merx

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.” ….

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

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…

Mr. Obama sure can pick them.

Of course his choice of Joe Biden as Vice President showed us that.

Perhaps, given the fact that despite he himself has had no background in running anything (besides his mouth), and he now ‘runs’ the United States – Mr. Obama feels anyone can run anything.

And what did he do for AT&T again?

This article was posted by Steve on Wednesday, June 10th, 2009. Comments are currently closed.

24 Responses to “New GM Chair Knows Nothing About Cars”

  1. Liberals Demise says:

    That’s par for the course ….. since January we’ve had a Butthead that knows nothing about running the most powerful nation in the world!!
    (Except into the ground)

  2. MinnesotaRush says:

    “The 6-foot-4-inch Texan nicknamed “Big Ed” said steering the nation’s largest automaker after bankruptcy is “a public service.””

    So what will “Big Ed” be paid for his “public service”?

    “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.”

    I wonder what “public service” “Big Ed” could do for a government who has squandered trillions of dollars in the last 5 months?!?!?

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

    How the hell would they know?!?!? Now .. would that be at least as “well qualified” as Congress? .. as “well qualified” as Treasury? .. as “well qualified” as o-blah-blah and his crew?

    Despiccable fools!!! Kids playing office!!!

  3. proreason says:

    “Edward E. Whitacre Jr. built AT&T Inc. into the biggest U.S. provider of telephone service over a 43-year-career”

    Really? I seem to remember that AT&T was a virtual monopoly until 1984 (when “Ed” would have been 42 years-old and a farm-hand in the AT&T beaurocracy). Then, AT&T was deregulated, and was overwhelmed by competition, which reduced it’s market share from 100% to closer to 10%. The abject failure of AT&T is undoubtedly the greatest business failure of all time. It’s as if Babe Ruth was struck out 20 times in a row by a 7 year old girl.

    But now, the pitiful demise of the monopoly that couldn’t possibly fail has been nearly matched by GM.

    So it’s appropriate that this idiot commissar, trained in the rigid communism of AT&T, who presided over the demise of the greatest business failure ever, should now take over the second biggest business failure of alltime

    • tranquil.night says:

      That’s a great memory you got there PR, I didn’t know this, thank you. Wow, once again blah-blah tells us exactly what he’s after while telling the Ozombienauts exactly what they want to hear.

    • retire05 says:

      proreason, I don’t think you are trying to be intentionally stupid (well, maybe with your “rigid communist of AT &T comment you were). So let me give you the correct information.

      AT & T was split up by the SCOTUS in 1982, not 1984, when the court split all the baby bells from the parent company, AT & T. AT & T was not overwhelmed by competition as it basically became a long distance only service, maintaining just a few small regions. So basically, ATT was not even in the dial tone market.

      Ed Whitacre never worked for the old ATT. He started as a field engineer for Southwestern Bell Telephone Company and climbed the corporate ladder as SWBT had a practice of promoting from within. But under Whitacre’s management, SWBT became SBC, and that facilitated the purchase of TelMex, PacTel, and almost all the other baby bells that had been split off and forced to become independent companies. With the old SWBT’s purchase of ATT, it was decided that SBC, and all the baby bells it had purchased, would become ATT. So the child then owned the originial parent. BellSouth was the last purchase which was finalized in January, 2006 and operated as BellSouth/ATT for a year, until January, 2007.

      So the very companies that the SCOTUS tried to destroy by splitting them up, are now owned all by the old Southwestern Bell Telephone Company, now known as ATT and all that can be credited to Ed Whitacre.

      AT & T is a good, solid company whose stocks have always paid over 5% dividends (I know, I own tons of AT & T stock from old SWBT stock).

      Whitacre was also the one who was smart enough to know that the land line was rapidly becoming a thing of the past. SWBT, for a short time, had it’s own cellular service, but in order to have access to more cell towers, Whitacre facilitated the purchase of Cingular.

      And while Whitacre may not know about cars (I doubt that you could build one) he does know about what customers want, and he knows how to look into the future, as he did will cell phone service. But the best part of Whitacre is his stance against unions. I would bet you a $100 bill that when the UAW learns of Whitacre’s past with the CWA, they will be soiling their Hanes.

      Shortly after Whitacre took the helm of Southwestern Bell, the CWA contract was up. The union jumped up and down, made grumblings about going on strike, and Whitacre said “this is what you are offered. Take it or leave it and strike”. The CWA walked. But the union, not counting on a strike, had dumped all of its funds into political campaigns and when the members found they were only going to get about $30/week in strike benefits, the strike lasted three weeks. And the CWA, in order to go back to work, settled for less than Whitacre’s first offer. In other words, the union lost and Whitacre won because after they went on strike, Whitacre offered them even less when the union said it would accept the contract.

      Now, if you think you can argue with my 31 years with Southwestern Bell, aka SBC, aka ATT and two years with BellSouth, bring it on.

    • tranquil.night says:

      “And while Whitacre may not know about cars (I doubt that you could build one) he does know about what customers want”

      Pro was not asked by the white house to manage GM.

      Nextly, Whitacre knows how to get people to want what he tells them to want, which is different from what you said. Let us not forget that your company AT&T under his vision has sought to violate Net Neutrality for Government regulation on national networks for the purpose of getting money out of companies using the internet “for free” to do business and further strong-arming the ISP market.

      The iPhone is another great example. Great product, great capabilities and an exclusive deal that AT&T is hindering with lousy rates and fees, poor service to customers, hopes for bandwidth limitations, but most of all – contracts that can prove futile to get out of.

      I can’t speak for Whitacre’s past, but if AT&T’s current vision is his, then Geithner is right to say he’s qualified. The model is all about control of the customer and markets, not the service or expansion of them unless they champion it.

      But hey, it’s clear by your response that he takes care of his own, as any good business should. Fortunately for Ed, the negotiations are done and the UAW already has all the money they need for now so he can get busy figuring out how many nifty features he can add to the 2010 Putt-Putt to drive up it’s retail price.

    • retire05 says:

      tranquil.night, you’re right, it was Whitacre that now has the job of running GM. So what? He knows how to run a business, profitably, inspite of everything the government throws at them to try to crush them. So what do you want? The same idiots that drove GM into the tank to begin with to stay there?

      And you seem to be clueless how businesses work; if you don’t know what your customer base wants, you won’t stay in business for very long. But to read your post, you seem to think that Whitacre had the power to convince millions of people what they want. So now I am dealing with someone else who thinks Americans are stupid.

      As to your “net neutrality”, great, maybe you are one of these people that think the internet, a service provided to you by a company, should be free. I bet you can’t wait for free health care. How about your water bill? Think that should be free as well. News flash, buddy, if you don’t like the service you get on a iPhone, don’t use it. What the hell do you need such an expensive gadget for anyway.

      Now, let me tell you how the government, not Whitacre, not ATT, screwed the customer.

      When the baby bells were split up, that was not enough for the government. They ordered the bells, and ATT, to sell dial tone to companies that had no equipment, no service techs, no outside plant. In other words, I could file as a telecommunications company and demand that SWBT sell me dial tone to your house where I could put telephones. And the government ordered that SWBT sell that dial tone as LESS THAN COST, so I could make a profit. So there was no effort on my part; all I did was put a phone in your home and send you a bill. Sage is a prime example of that. But if you had a service problem, Sage had no service technicians to fix it so they had to call SWBT. And while SWBT fix it for free if you were their customer, Sage would charge you $80/hr. But Sage wasn’t required to tell you that it would really be SWBT fixing your service problem or that they would charge you for the service that SWBT techs were really fixing.

      It would be like you owning a ranch where you raised cattle. The government tells you that you have to sell some of your cattle, at a loss, to me. Then you have to let me use your barn and let my cows graze on your fields. All, at a loss just so I could sell those cows (I got from you) at a profit. I have nothing invested, you have everything invested and I get to make a profit on your investements. To top it off, the government then tells you that I can use your office to do my paperwork. Would you feel like the government just screwed you?

      Yeah, Whitacre took care of his own (us). There were no major layoffs after he took over. So, feel free to believe all the crap about ATT, and its business practices, you want. As to that iPhone contract, perhaps you should have read it. Are you a Wal-Mart hater, as well?

      Whitacre doesn’t need to know about cars. He needs to be able to turn a failing industry, one that the union has driven into the ground, around. I don’t think he will be able to do it, but not because he is incapable, but because of the involvement of the moron in the Oval Office.

    • proreason says:

      AT&T was annihilated by the competition when they were forced out of their monopoly status. The company might as well have been a government beaurocracy before the break-up.

      Like I said, AT&T market share steadily eroded from that point. Management was unprepared to compete in the free market. Even one of the crown jewels of American technology, Bell Labs, declined.

      It was the biggest business collapse of all time. (Maybe the railroads, if condidered as a single entity would be equivalent, and maybe financial institutions in 2008 would also rival the collapse.) One has to wonder how, with Bell Labs, a dominant network, and 99% of the telecom experts in the world, AT&T failed so miserably after the break-up. The answer is probably that AT&T was so accustomed to no competition that management simply assumed they could overpower any rival. They were dead wrong about that. But of course, AT&T fans will argue that the competition was given unfair advantages.

      It was a great thing for consumers.

      Looking back, the long history of AT&T is kind of sad. For decades after AT&T was founded up to the early 80’s when it was forced out of its monopoly status, telephone service was the same. Every house had one land line. The very rich might have had a second land line. The big innovation over 80 years was direct dialing rather than operator assisted dialing. I can’t quite remember whether phones were portable at the time of the breakup. Perhaps that was a second innovation in 80 years. I don’t know much about Bell Labs other than its reputation as a hotbed of scientific inquiry, but I bet the lab had already pioneered most of the innovations that exploded after 1984….AT&T management just had no incentive to introduce them.

      But hey, that’s what happens when you have monopolies.

      Within a decade after the monopoly was broken up, new product abounded, prices crashed, and the modern communications revolution was in full flower. I don’t usually praise government, but the AT&T break-up is a rare example of a successful government edict. (but notice that the edict was for MORE free market capitalism)

      Several members of my family had careers with Ma Bell, so I know it was just like the government. Highly seniority based. Didn’t much matter how talented the worker was. They had a job. They did it for x years, and if they played the game, moved onto the next rung of the ladder.

      Now a man who spent his prime years participating and presiding over the sad decline is in charge of GM. Sounds about right for the Obamunists.

    • retire05 says:

      proreason, so it seems you have a problem with monopolies. OK, I can deal with that. But it seems your problems are selective. How many cities (like mine) own the electricity provider? Are you even aware that if you have electricty provided by a municipally owned provider, they are not governed by the PUC and your electrical rate are determined by a city council and they are not governed by the PUC? Are you aware that cable companies, more often than not, are granted monopoly status by cities where their only competition is from satallite companies?

      Did Bell Labs go away? Yes, and was replace by Lucent Technology. So did Western Electric which, at one time, made almost every telephone in America. I explained what happened to the baby bells after the court forced breakup. The Bells were forced to sell, at below cost, to CLECs (resellers). It was just another way to try to destroy a company by the government.

      I am glad that your family members found a job with Bell. They had a career for life. And they could start out as a simply lineman, and work their way up the corporate ladder. Almost every Fourth Line that SWBT has, came from the ranks. What other company offers that opportunity to it’s employees? But don’t think for one minute, because you had “family members” work for a company that I put 33 years of my life into that you have more knowledge on how the government damn near destroyed one of the largest employers in our nation, because you don’t.

      So when you have personal experience in the Bell System, get back to me. I went through every damn one of the changes. I saw the government allow cable systems to enter the dial tone business but refuse to let the Bells enter the cable business. But I guess you think that was also fair, right? Instead, ATT had to create a company to offer satallite service because, to this day, telephone companies cannot provide cable tv but cable companies can offer dial tone.

      What you know about ATT, the Bell Systems, and the history of the companes seems to be sorely lacking.

      And not once, never, has any of the Bell Systems been given a bail out on your tax dollars like GM has.

      Yes, service quality fell when after 1982. Why wouldn’t it? CLECs were providing dial tone (created by Bell Systems plants) but were not required to offer customer service. That still fell on the shoulders of the Bell Systems.

      My guess is you are trying to manufacture complaints simply to hide your ignorance and refuse to accept the actual history of what happened because if you do, your complaints become moot.

      You sir, frankly don’t know your butt from a hole in the ground.

    • proreason says:

      Charming retire05. Very charming. What makes you think I am selectively in favor of cable and electric monopolies? Maybe I’ll read your mind in this post, like you choose to read mine.

      “I went through every damn one of the changes” I can see it’s an emotional topic for you. Perhaps you should try to get over it. Or get counseling.

      “hide your ignorance and refuse to accept the actual history of what happened” History is in the eye of the beholder, retire05. My history says AT&T stiffed the country for decades. Your history says AT&T was stiffed in 1984. The difference between you and me is that I recognize rational people can have different views. You don’t.

      Given your fierce defense of a monopoly that stifled innovation for decades and failed miserably as a business when its monopoly status was revoked, I suspect you have a pro-government mindset. You should love Universal Health Care. Many of your relatives will have good jobs for life, right?

      As for myself. I have a pro-innovation mindset. Thank God for Alexander Graham Bell. Shame on his successors.

    • retire05 says:

      proreason, I am trying to provide you with facts. You seem to be unable to grasp them. That is your problem, not mine.

      Am I emotionally involved in a company that provided me, and my family, the ability to buy a home, have a decent vehicle, pay my bills, provided me with a retirement, and basically allowed me to start at an entry level position (union) and work my way up? Damn straight, skippy. But I would not expect you to know what loyalty is.

      You say that ATT stiffed customers for years. I guess, being the clueless one you are, you didn’t know that the PUC sets the prices that any telecommunications company can charge. Yeah, rainman, the PUC tells ATT what to charge and makes sure that ATT doesn’t lower its prices in order to provide you with a value based telephone system. But, if you feel you are being stiffed, feel free to change to one of the CLECs listed in the front of your phone book provided to you by ATT. Yeah, that’s right; ATT is required by law, to tell you who their competitors are. But I am sure you are all for that. And when your service goes to hell, and you are billed $80/hr by one of those CLECs, don’t come crying to me how ATT “stiffed” you.

      No, I don’t have a “pro” government mindset. I am not the one who thinks that the government had a right to interfer with a private company, doing its best to destroy it. That would be you. I am a free market capitalist and I don’t think the government should have the right to tell a company that it has to sell its product to another company at a loss in order to make that other company competitive.

      But you seem to think that is just okey dokey. So please, tell me what you do for a living because I want a piece of the action at your expense.

      And no, asshole, none of my family works for ATT. So once again, you exhibit your stupidity and narrow mindedness and continue to speak from your lower orifice.
      Get counseling. You, of all people here, desparately need it.

    • retire05, you have no idea what you are talking about when you speak of the commentors here on this site. If you for one second read previous articles and posts and the comments made about how much power the government shouldn’t have, you would be removing your foot from your mouth right now. So please, leave right now and never come back.

    • tranquil.night says:

      Though the sentiment is appreciated Calibear, we shouldn’t discourage anyone’s right to voice their argument here I don’t think. Retire05, I’ve appreciated the discussion, I did learn alot. I still maintain that telecommunications isn’t a field that should be a subsidized monopoly, yet the stymieing of competition continues anyway and it’s one of the reason why network innovation is falling behind here on the world charts when we’re the country that broke open the market. I’m not against big business – only if the business tries to regulate a market like the government would. That’s what SCOTUS ’82, which sounds personal to you, was about. You stand on one side of the fence and we stand on the other. I do not command the depth of the facts you do, but I am alright at seeing how actions reflect an entity or person’s strategy, and I see this is an argument over exactly how you define success.

    • He is certainly allowed his opinion, but when he attempts to read the minds or assume he knows how we stand on certain situations, it is just showing ignorance. If he wants to stay on the site, he is certainly free to do so, but he should know that any personal attack will not be taken lightly.

      It is interesting that Pro never insulted retire’s intelligence, but it was done repeatedly the other way. But I guess thats just how it works sometimes. Some people feel like the only way they can get their point across is to insult someone.

    • retire05 says:

      CaliforniaBear; please, provide me with the proof of your ownership of this blog. Because that is the only way you have a right to tell me to leave.

      Here is a better suggestion; you leave. Find some blog where everyone marches lock step with you and you can bully them into doing what you want. Until then, I will allow the owner of this blog, not you, to determine who should be here and who should not.

      And excuse me if you think I should listen to people who have no clue as to what happened in the telecommunications industry because they get their talking points from some web site (Wiki?) and not have a right to correct their errors.

      Now, if you had two grey cells bumping together, you would have noticed that NOT ONCE, did I say I was a fan of Whitacres. I merely told you his history and what he had accomplished to create a major company inspite of the attempts of the federal government to destroy it. But I guess the education level in California is run by the Teacher’s Union so I do not expect you to be well educated and be able to possess cognitive abilities.

      Now, why don’t you leave or are you too stupid to be embarrassed by your own stupidity?

    • Once again, you assume you know what you are talking (about posters, not the subject of this thread specifically). I did not grow up in California, merely moved here just a year ago. Thanks though. Like I said, you can stay if you want, but calling people stupid is not called for. I would love to hear your opinion and would actually listen to it a lot more if you didn’t call people names to try to get your point across. Hearing people talk like that just turns me off to what they are saying and I move along.

      How about this: I shouldn’t have insinuated that you leave. That is my bad and I’m sorry for that, but for the future, why don’t you try referencing your points without trying to make people feel stupid. It is a lot more becoming.

    • retire05 says:

      Californiabear, if you are going to address me, do it personally and stop acting like a high school freshman girl talking about me as if I was not here.

      Did I insult proreason’s intelligence? You betcha. When you try to educate someone to the actual facts of a topic, and they constantly refuse to accept what you are trying to inform them about, what would you consider that person? Closed minded? OK, so I should have just told proreason he was closed minded and not someone who obviously gleens his information second handedly from web sites and “family members” who are not here to defend what they may, or may not, have told him.

    • I appreciate your point of view, retire05. Honestly, I have no knowledge of the situation at AT&T, so you have filled my head with new information :-D.

    • retire05 says:

      CaliforniaBear, you apology is gratefully accepted. Yes, I was with SWBT/BellSouth for over 33 years. Yes, I was there when friends who worked for AT&T were let go because of the SCOTUS decision. I watched guys who had staked their entire future on those jobs wondering what the hell they were going to do. Fortunately, most of them were picked up (in my state) by SWBT.

      My argument is not that Whitacre should have been given the job. But he knows how to make a company profitable, inspite of government intervention, and that is what GM needs right now. Personally, I don’t think that it matters who Obama hires for GM. They are the next Amtrak, the next government run schools, the next bottomless pit that Americans will continue to pour taxpayer dollars into. I thought they should have been allowed to enter Chapter 11 without taxpayer bailouts. Sink or swim, so to speak. I do not subscribe to the philosphy that any company is “too big to fail”. And I am of the opinion that eventually FiatSpa will own the whole mess in the end anyway.

      No other industry has been restricted, regulated and harrassed like the telecommunications industry. And all that govermment tinkering has done nothing but shaft the consumer.

      Do I like Whitacre? Personally, no. But there is no questioning his genius in running a company against the mighty pressure of the federal government. And I don’t think he would take the job with GM, considering his background, unless the administration agreed to give him a free hand.

  4. Right of the People says:

    “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.”

    “I don’t know anything about running even a small town but I’d sure like a chance to learn,” Barry Obamy said with an aw shucks look on his goofy face. “I’m only 47 but I’m sure I could learn how to be a good dictator, oops, I meant to say president. It might take me fifteen or twenty years but I can do it. Now all we’ve got to do is get rid of that pesky 22nd amendment thingy.”

    This kind of reminds me of that Aamco commercial years ago where the goofy looking rube crawls out from underneath a car and says, “I ain’t never worked on an automatic transmission but I always wanted to.”

    I fear for our country.

    “That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, having its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
    Declaration of Independence

  5. U NO HOO says:

    “shaping a “monolithic” AT&T into a diversified enterprise”

    GM is down to four models, hardly a diversified enterprise.

    Although it has been reported GM bailed out Delphi, a former part of diverse GM.

    The more you know, the more you want Delco.

  6. JohnMG says:

    ……“I don’t know anything about cars,” Whitacre, 67, said……”

    Somehow this just seems to fit here. The following is an Arabian proverb;

    He who knows not and knows not that he knows not,
    He is a fool–shun him.

    He who know not and knows he knows not,
    He is simple–teach him.

    So what we have is a potentially capable man who held up a bunch of ignorant fools for all that the market will bear in terms of remuneration. He risks nothing for the money he’ll receive (and nobody’s telling us how much that is) and is probably willing to take the blame when this deal goes south. BUT he’d be willing to learn if there was anyone in the administration to teach him. Which begs the question–if there’s somebody smart enough to educate Whitacre, why isn’t THAT person in charge in the first place?

    I guess the whole Obama camp is being run by a bunch of ‘not-knows-es! Anybody got a handkerchief?

  7. Confucius says:

    Sorry S&L. Bad post. Keyboard made by GM.

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