How Former AT&T and GM CEO Ed Whitacre Pulled Off Two of America’s Most Successful Business Turnarounds 

Whitacre with groupEd Whitacre Jr.’s native Texas twang, personal charisma, keen business acumen and unique management style combined to make AT&T one of the foremost companies in the world. Retiring from that success, he wasn’t sure he wanted to answer his country’s call to lead GM. But it’s a good thing he did.

Whitacre took the stage with Dean Erekson for the Tandy Executive Speaker Series April 3 and shared with a record-breaking crowd his climb up the corporate ladder at what is now AT&T, and how he came out of retirement to lead GM at the request of President Obama.

“I didn’t know anything about cars or car-making,” he said, but he quickly learned that there are thousands of parts to one car, and those parts are created and shipped from all over the country and the world. “If GM had gone under, millions of people would have lost their jobs,” he said.

Whitacre, who recently (and, he said, reluctantly) wrote and published a memoir, “American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA,” shared with Metroplex business professionals and Neeley students and alumni about turning points in his remarkable career.

He began his career with Southwestern Bell Telephone Company in 1963 as a facility engineer in Lubbock, then moved to corporate headquarters and through progressively more important roles.

Through a series of industry-changing acquisitions and mergers, Whitacre advanced what he called “the smallest of the Baby Bells” after the 1984 government-mandated breakup of the Bell system to the nation’s largest provider of local long distance telephone and wireless service.

“When you’re the smallest that’s usually not a good thing if you want to stay in business long,” he said. “We decided we had two choices. We could either get purchased by someone else, or we could get big ourselves.”

Whitacre was named president and chief operating officer in 1988, taking responsibility for the company’s six primary subsidiaries. Within 16 months, he became chairman and chief executive officer.

He led the company in purchasing Mexican Telephone Company in 1990. Stock dropped the next day, and Whitacre thought he’d be remembered as the shortest-tenured CEO in the company’s history. Then the stock priced zoomed up. The risk paid off. Several more mergers and acquisition paid off, too, including the 2005 acquisition of AT&T Corp., after which the company adopted the name AT&T Inc.

His advice to current CEOs: “Follow the vision you have for your company. Be able to change strategy and tactics on a dime. Be willing to take a risk. Do good by the people who work for you because they are your most important asset.”

Whitacre retired from AT&T in 2007. In 2009, the U.S. Government asked him to assume leadership of General Motors, which was emerging from bankruptcy. It took some persuading, but Whitacre finally agreed.

What he found at GM was a culture in dire need of a change.

“GM was doing it their way, and if you didn’t like it, you didn’t have to buy it,” he said. That kind of thinking wasn’t working. “They lost their reputation, and further lost it with the bankruptcy.”

He whittled down GM’s pervasive bureaucracy and made sure everyone, from the boardroom to the assembly line, understood what was happening and why. He even repaired relations with the United Autoworkers Union by meeting with the UAW president at Union headquarters.

“He said no GM president had ever visited there before,” Whitacre related.

The results of his management style were almost immediate.

“The quality of GM products got fixed almost overnight,” he said. “People began to be energized. We came out of bankruptcy and everybody said, ‘It’ll be two years before you make a nickel.’ We made $1 billion the first three months. People began to see that it could be done.”

After his on-stage chat with Erekson, Whitacre answered questions from the audience and even offered several people a good deal on GM cars. After the event, the down-to-earth Texan stayed to talk with business professionals and students.