Can the Man Who Re-Assembled AT&T Change His Tune For GM?

Ed Whitacre. The quintessential amalgator of companies.
Written by Tom Steinert-Threlkeld, Contributor

Ed Whitacre. The quintessential amalgator of companies. He's going to save GM, as its new chairman?

Don't get me wrong. He did a pretty amazing job with the hand he was played in telecommunications. He took the smallest of the Baby Bells, at the time AT&T was broken up a quarter-century ago. And turned it into ... AT&T.

The Southwestern Bell Corporation was more profitable than its bigger brethren. Then, under Whitacre's aggressive guidance, the company got growth by gobbling up Pacific Telesis, Ameritech, Southern New England Telephone and BellSouth. It took over Comcast's wireless business and a host of other communications outfits. Eventually, it took over the remnants of Ma Bell (aka, AT&T), which had not competed effectively in long-distance or corporate services. And, then, Southwestern Bell, which had renamed itself SBC for a while, took over the name AT&T.

Now it's hard to see a replay here, where Whitacre takes GM as a springboard and rolls up other automakers and recreates GM in its own image as global competitor to be feared.

With Southwestern Bell, he had a profitable company to build on, in a fairly protected field (regional telecommunications). He rolled up rivals, as competition increased (from cable and the Internet) and economics worsened.

At GM, there are no profits to build on. There are no rivals to buy. There's more disgorgement of assets to come, like Opel, Hummer, etc.

What's called for here is a whole new way of doing business with a whole new way of looking at the auto business. Somehow, former SAP heir apparent and now electric car innovator Shai Agassi would seem a more inspired choice. Or at least someone from the next generation of automaking, thinking and philosophy.

Not a fellow, as smart as he is, who basically is an M&A guy.

Can you name a single product or business process innovation wrung in by Southwestern Bell, SBC or AT&T under the Whitacre watch?

Didn't think so.

Of course, this was the guy who appeared to be planning to put toll booths on the Internet, charging for premium levels of speedy access to content. But he changed his tune, once SBC acquired AT&T.

Now, he'll have to change his tune at GM, as well. Growth through amalgamation is not an option.

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