Ex-AT&T CEO Whitacre to become new GM chairman

By Poornima Gupta
DETROIT (Reuters) - General Motors Corp on Tuesday took a step toward restructuring its widely criticized board by naming former AT&T Inc CEO Ed Whitacre to become chairman of the reorganized automaker when it emerges from bankruptcy under U.S. government oversight.
Whitacre, an engineer by training who guided Texas-based Southwestern Bell through a decade of transformative mergers, will take over as chairman when a new GM is launched out of bankruptcy, the company said.
GM, which filed for bankruptcy on June 1, plans a quick sale process that would allow a much smaller automaker to emerge from court protection in as little as 60 days under the majority ownership of the U.S. Treasury.
By picking Whitacre as chairman for the new GM, the White House-appointed autos task force took the first step toward establishing a restructured board to oversee the government's $50 billion investment in reshaping an American industrial icon.
"He is coming into an industry that is accustomed to heavy regulations. He knows how to grow a company. He gives a lot of credibility to GM's restructuring," said Stephen Spivey, an auto analyst with Frost & Sullivan.
Former GM Chairman and Chief Executive Rick Wagoner, who had staked his reputation on keeping the company out of bankruptcy, was ousted by the Obama administration at the end of March.
In announcing Whitacre's selection, GM also confirmed that the longest-serving board members and those most closely associated with Wagoner's tenure would be leaving.
Kent Kresa, former chief executive of Northrop Grumman Corp who has been serving as GM's interim chairman, will stay on in that position until Whitacre takes over, GM said.
Whitacre and Kresa, along with current board members Philip Laskawy, Kathryn Marinello, Erroll Davis Jr, E. Neville Isdell and Chief Executive Officer Fritz Henderson, will serve as the "nucleus" of the restructured board, GM said in a statement.
GM's board has come under fire before as efforts to restructure and turnaround a long-running slide in its business faltered. In the late 1980s, Texas tycoon Ross Perot dubbed his fellow GM directors "pet rocks" who sat silently by then-CEO Roger Smith.
In 2006, Jerry York, a director representing billionaire investor Kirk Kerkorian, resigned from the GM board and said that directors were unwilling to challenge Wagoner.
York had urged GM without success to drop unprofitable brands such as Saab and Hummer, steps that it only took later as its financial crisis deepened.
Three of the GM outside directors staying on at the reorganized company -- Marinello, former chief executive of Ceridian Corp; Davis, a former chief executive of Alliant Energy Corp, and Isdell, a former chief executive at Coca-Cola Co -- joined the board after that dispute.
Davis and Marinello joined in 2007. Isdell joined in 2008. Laskawy, former chief executive of Ernst & Young LLP, joined the GM board in 2003.
Other board members with more than a decade of experience were expected to retire in the coming weeks, GM said. That includes George Fisher, a former Eastman Kodak chief executive, who had been a steady ally of GM management under Wagoner. Continued...
Source: Reuters