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Ed 'Pipes' Whitacre To Run GM
Because what GM needs right now is a lack of innovation...
by Karl Bode Wednesday 10-Jun-2009 tags: competition · business · Op/Ed · Oddities · AT&T
Tipped by 93388818 See Profile
You'd expect that whoever was tasked with running the new government-aided General Motors would be gifted in adapting to new business models and innovation, given the lack of which was a major reason for the automaker's implosion. So it comes as a surreal shock to many to see that GM's new boss will be former AT&T CEO Ed Whitacre. Sure, Whitacre ran a tough ship at AT&T -- but he was also stubborn and anything but innovative. Whitacre was also single-handedly responsible for starting the network neutrality wars by making some confused comments in 2005 about how Google wasn't going to get to use Ed's "pipes" for free.

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Ed's belief was that content companies should subsidize phone company network builds -- when such companies already pay for and own their own bandwidth. Despite the fact it highlighted a huge misunderstanding of the way the Internet works, Whitacre's bizarre sense of entitlement settled into the bones of AT&T corporate "telco think" and became an oft-repeated talking point.

While Whitacre did help diversify AT&T and steel AT&T's monopoly power in many markets through top tier lobbying -- the carrier remains an old-school establishment that can't take risks and is slow to adapt. The biggest example is Ed's decision to placate his investors and milk copper, instead of taking the company's ample resources and investing in fiber to the home technology. As a result, AT&T's going to be playing catch up for years.

Are we seeing any parallels to GM yet?

"Seems that a man who comes from an industry that put the NO into the word 'innovation' has a chance to set his mark once again, this time in Detroit," VoIP pioneer Jeff Pulver says to Alex Goldman at Internet News. "Whitacre is an ideal choice for GM," Jim Pickrell, who sued AT&T in the infamous "Brand X" case, tells Goldman. "Under his leadership, AT&T has been able to get regulators to regulate his competition out of business."

While there's little doubt he'll keep a tight budget, it's not clear that Whitacre has any automotive experience, nor is it clear that a government-pampered, lumbering monopoly with a poor history of listening to customers is the kind of model the "new" GM should be emulating. Ed's starting his tenure off at GM on an interesting foot, by admitting this week in an interview that he doesn't actually know anything about cars. All Ed knows, to steal a line from consumer advocate Art Brodsky on Twitter, is that he ain't going to let you use his roads for free.

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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Lateral Management Change

I can't call this a downgrade, as the previous management of GM knew nothing about cars either.
--
Blagojevich / Madoff 2012!

GlobalMind
Domino Dude, POWER Systems Guy
Premium
join:2001-10-29
Hollywood, FL

Re: Lateral Management Change

said by pnh102:

I can't call this a downgrade, as the previous management of GM knew nothing about cars either.
Well I think he knew something about cars, just not how to run a car business.

Heck, I'm a car guy....I'll run GM on the cheap too. Give me $250k a year and I'm there.

Oh and of course my company car would need to be a new Vette.
--
TheGlobalMind.com / Speed costs money. How fast do you want to go? / Trust the instinct to the end, though you can render no reason. - Ralph Waldo Emerson / Free market capitalism is the best path to prosperity.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Lateral Management Change

said by GlobalMind:

Oh and of course my company car would need to be a new Vette.
If it was me I'd insist on a Honda or Toyota. I do want to make it to the office and back.
--
Blagojevich / Madoff 2012!

GlobalMind
Domino Dude, POWER Systems Guy
Premium
join:2001-10-29
Hollywood, FL

Re: Lateral Management Change

said by pnh102:

said by GlobalMind:

Oh and of course my company car would need to be a new Vette.
If it was me I'd insist on a Honda or Toyota. I do want to make it to the office and back.
Actually I've got Mazdas and they've been great. The Vette is for, well...if I'm there I might as well have something fast.
--
TheGlobalMind.com / Speed costs money. How fast do you want to go? / Trust the instinct to the end, though you can render no reason. - Ralph Waldo Emerson / Free market capitalism is the best path to prosperity.

loadmaster

join:2001-01-10
San Jose, CA

Re: Lateral Management Change

Would that be for a fast getaway in case things go to hell again?

GlobalMind
Domino Dude, POWER Systems Guy
Premium
join:2001-10-29
Hollywood, FL

Re: Lateral Management Change

said by loadmaster:

Would that be for a fast getaway in case things go to hell again?
LOL Sure why not.

baineschile
2600 ways to live
Premium
join:2008-05-10
Sterling Heights, MI
Reviews:
·Comcast
said by pnh102:

said by GlobalMind:

Oh and of course my company car would need to be a new Vette.
If it was me I'd insist on a Honda or Toyota. I do want to make it to the office and back.
That one actually did make me LOL.

XterraPwned

@holdenandrew.com
Make mine the new Camaro SS or even better the Cadillac CTS-V

TSI Gabe
Premium,VIP
join:2007-01-03
Chatham, ON
kudos:2
Will our cars be throttled?

Oh no wait, they already are.

en102
Canadian, eh?

join:2001-01-26
Valencia, CA

GM and AT&T - neither company 'evolved'

This should be a perfect fit for Ed. Old school business, old school union, old school mentality.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Re: GM and AT&T - neither company 'evolved'

said by en102:

This should be a perfect fit for Ed. Old school business, old school union, old school mentality.
Yep, GM's doomed. His first move will probably lobbying the Government to "Level the playing field" by banning Foreign competition / built vehicles.

He'll probably want a "Universal Automobile Service Fund" built out of Road use taxes and fuel taxes that will be a big slush fund for GM.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
nitzan
Premium,VIP
join:2008-02-27
kudos:2
said by en102:

This should be a perfect fit for Ed. Old school business, old school union, old school mentality.
Maybe old-school is what GM needs?

The GM problems are less on the innovation/regulatory side and more on the financial side.

Despite any stupid remarks he might have made in the past, at least Ed Whitacre is financially conservative which is exactly what GM needs right now.

Hell, things at SBC (pre-AT&T merger) were going very well under Whitacre. It's the new psycho management (Stephenson) that scares the crap out of everyone.

Pyrion
Liquid Metal Nanomorph

join:2001-12-01
Poway, CA
kudos:1

Re: GM and AT&T - neither company 'evolved'

said by nitzan:

Maybe old-school is what GM needs?
To put it out of its misery? Yeah, sure. Hopefully.
--
"There is much pleasure to be gained from useless knowledge." - Bertrand Russell
jarrodholder
Premium
join:2002-07-22
Rossville, GA

Goodbye GM

I'm not a GM fan anyway, so I say "Welcome Ed!"

Sounds like a perfect match to kill off a dying company.

JohnQPublic6
Premium
join:2002-03-22
Xanadu

Re: Goodbye GM

If we look at the glass as half-full, we could be thankful that Chainsaw Al Dunlap wasn't recruited for the job. Nobody could drive a company faster into the ground while breaking all kinds of laws in the process.

kataan
RIP my love.
Premium
join:2003-04-22
Greenacres, WA
Reviews:
·Comcast
·T-Mobile US
I must agree I have owned "two" GM's an Oldsmobile and a Saturn. The Olds sucked, but my Saturn is still running strong and I love it. On a side not thought my Saturn was designed and built while still out side of most of GM's control. (Thank God)

jjsk8r85

join:2005-02-17
Belleville, MI

Re: Goodbye GM

I happen to love the hell out of my little 92 Saturn. It struck me as odd when I bought my '07 focus that the 17 year old saturn with 240K on it could run circles around the focus (speed-wise, and MPG-wise.)

It's a real shame to see what's happening to GM (Whiteacre)

cableties
Premium
join:2005-01-27
Saturn (pre-rejoining) was the BEST example of a carmaker, but the worst example of a profitable-margin based company.

By letting Saturn loose to self-manage, the company designed and built a car that was efficient, reliable and durable (the timing chain, the replaceable panels...). But what was bad was that, like Subaru, without planning for longterm buyers, the issue is sales. Owners will have the car for a decade. That is something GM didn't want. Hence the Saturns are now also Opels...
GM sells parts. Can't you tell?

(Corvette, Tahoe, Suburban all in their own class. Everything else is rebadged or junk) Too bad, as the GMC 2500HD has a quiet and powerful diesel.

Toyota, I hope, is learning to get out of vested interest with GM, and bring back smaller pickup (the Tacoma has gotten too big) with turbo diesel. Imagine a small truck that can carry 1000lbs, pull 8000lbs and get +30mpg. Toyota and Nissan could pull this off.

GM missed the boat and the taxpayer is bailing them out...


morbo
Complete Your Transaction

join:2002-01-22
00000

goodbye GM

wow. goodbye, GM. this time, for real.

Phil
Rojo Sol
Premium
join:2001-06-11
Downers Grove, IL
kudos:2

Re: goodbye GM

How so? Anyone paying taxes in the US, myself included, is paying the salaries of all GM employees. No matter how poor the offerings from GM it will continue to be shouldered by loans from the tax payer we can't possibly ever repay.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: goodbye GM

Exactly. GM and Chrysler are becoming this historical period's equivalent of Amtrak.

Although you can make logical, reasoned and perfectly valid arguments for funding Amtrak.
--
Blagojevich / Madoff 2012!

Pyrion
Liquid Metal Nanomorph

join:2001-12-01
Poway, CA
kudos:1

Re: goodbye GM

said by pnh102:

Exactly. GM and Chrysler are becoming this historical period's equivalent of Amtrak.

Although you can make logical, reasoned and perfectly valid arguments for funding Amtrak.
Not on the west coast. Amtrak is fucking pointless out here.
--
"There is much pleasure to be gained from useless knowledge." - Bertrand Russell

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: goodbye GM

said by Pyrion:

Not on the west coast. Amtrak is fucking pointless out here.
From a practical perspective, Amtrak really ought to be divied up to the states. There's no reason why states in which Amtrak is not useful should have to pay to keep Amtrak running in states where it is useful.
--
Blagojevich / Madoff 2012!
markopoleo

join:2003-04-02
Bonne Terre, MO
Reviews:
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said by Phil:

How so? Anyone paying taxes in the US, myself included, is paying the salaries of all GM employees. No matter how poor the offerings from GM it will continue to be shouldered by loans from the tax payer we can't possibly ever repay.
Just like China. What most people are not realizing is even if the government owns most of GM does not mean its out of debt and starting "fresh", it just means the government is shouldering all the debt now. Its not saving any jobs mind you, its just a band aid.

Does no one else see the HUGE problem here with shouldering so much debt to one country? China bought the government bonds that inherited the GM buyout for crying out loud. lol

China does not have to lift a weapon to take over the US it just has to buy it. China is also the 2nd highest foreign land owners in the USA behind Mexico. The 2nd highest in regards to business properties. Who knows how many fronts china has in purchasing land with private citizens as backers.

Not trying to be paranoid, just stating that if you are going to bail out a US company, you don't take loans from China to do so. Simply amazing.

fifty nine

join:2002-09-25
Sussex, NJ
kudos:2

Government bailout companies

LOL the whole reason AT&T exists is due to bailouts... and now, ditto GM.
bogey780

join:2004-03-19
Here
kudos:1

Re: Government bailout companies

When has AT&T ever been bailed out?

fifty nine

join:2002-09-25
Sussex, NJ
kudos:2

Re: Government bailout companies

said by bogey780:

When has AT&T ever been bailed out?
Not bailouts in the TARP sense, but lots of Government assistance.

swaff

join:2000-07-16
Normal, IL

Re: Government bailout companies

said by fifty nine:

said by bogey780:

When has AT&T ever been bailed out?
Not bailouts in the TARP sense, but lots of Government assistance.
You don't know what you're talking about
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: Government bailout companies

He means government regulation that snuffed out ATT's competition and a complete lack of anti-trust policy enforcement.
Skippy25

join:2000-09-13
Hazelwood, MO
What are you 12?

Do you really have not clue as to the history of the telephone companies?

fifty nine

join:2002-09-25
Sussex, NJ
kudos:2
said by swaff:

said by fifty nine:

said by bogey780:

When has AT&T ever been bailed out?
Not bailouts in the TARP sense, but lots of Government assistance.
You don't know what you're talking about
That would be you, kid.
notwrth10

join:2007-03-03
1001EB

1 edit

Re: Government bailout companies

said by fifty nine:

That would be you, kid.
yea and unless you have quotes to prove it that pops your balloon as well, kid.
KnightAR

join:2004-04-22
San Marcos, CA
AT&T never received a bailout ... They made 10 billion (Net income), and had over 119 billion in revenue last year (Source: Wikipedia). AT&T is one of the biggest phone companies and has never had any financial problems as far as I know.

vzw emp

@qwest.net

approval from:
fiberguy See Profile

Re: Government bailout companies

Yeah...

Sounds like someone needs a history lesson. True, they didn't get an outright bailout, but the USF is basically a welfare program. Deregulation meant that they could charge more for their service while not actually providing any. They've also received government funds and tax incentives to build a 45 Mbps broadband utopia that's never materialized. And then there's the FCC, who eviscerated the Telecom Act of 1996 effectively obliterating competition in the telecom industry (which other countries sucessfully implemented to the benefit of consumers).

There are many sources of info, but for starters just go here: »www.newnetworks.com/. When you're done reading maybe you will rethink your original post.


fifty nine

join:2002-09-25
Sussex, NJ
kudos:2
said by KnightAR:

AT&T never received a bailout ... They made 10 billion (Net income), and had over 119 billion in revenue last year (Source: Wikipedia). AT&T is one of the biggest phone companies and has never had any financial problems as far as I know.
Yes, when the Government basically ensures you have no competition and can collect sll sorts of fees to do upgrades, some of which are/were vaporware, you should be making a profit.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

GM has a brand new car coming out.

Karl you must not watch TV or read the actual NEWS. GM is working with Segway right now on a brand new car.

www.segway.com

That IS innovation.

See 11 replies to this post
Network Guy
Premium
join:2000-08-25
New York

I'd love to see GM fail again

Three times is the charm. Maybe Obama will piss away our tax dollars somewhere else next time around.

See 8 replies to this post
extreme50
Premium
join:2002-06-07
Coloma, MI

Uh oh....

...will his first order of business be to shut down rural dealships?
--
Comcast has spoiled me rotten!
Austinloop

join:2001-08-19
Austin, TX
kudos:1

Re: Uh oh....

Well, when you consider obammy's car czar, Ed might just be an improvement.

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Whitacre is a perfect fit ...

... to kill off GM once and for-all.

said by article :
nor is it clear that a government-pampered, lumbering monopoly with a poor history of listening to customers is the kind of model GM should be emulating.
That sounds exactly like what GM has been doing all these years. Not listening to customers, lumbering along behind the sales of inefficient trucks and SUVs, no future contingencies in the case of a radical market shift ... AT&T and GM are very similar.

See 12 replies to this post

BabyBear
Keep wise ...with Nite-Owl

join:2007-01-11

Stop the Gas station free rides!

There ya go Ed. First chance to scrounge up some 'free' cash. Tell us all how the gas stations of America are getting a free ride off of GM vehicles.

Maybe he can put his AT&T experience to work in the area of bundling AT&T services with your new GM car to give the appearance of value.

Oh I know. Mileage caps!

See 6 replies to this post

skuv

@rr.com

So...

Is there supposed to be something wrong with calling an Internet connection a pipe?

I don't personally call them pipes, but I've worked in the backbone business for 13 years, and lots of people call them pipes. They don't literally believe that they are pipes.

Perhaps you're confusing this with the Senator that called the Internet a "series of tubes" and literally believed that.

sivran
Opera convert
Premium
join:2003-09-15
Arlington, TX
kudos:1

Re: So...

The nickname is a reference to when Whitacre said, "I won't let them use my pipes for free" in reference to Google, etc.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: So...

Yea... and? Still he's right.. somehow, the adolescent users of BBR have turned it into a bad word, somehow to which I've always laughed at..

The level of immaturity here on BBR never ceases to amaze me.. and for what.. the "internet".. oi.

imrf
Premium
join:2002-06-06
Utica, MI

1 edit

He's not running the company.

The chairman doesn't run the company. Fritz Henderson will still be running GM.

wifi4milez
Big Russ, 1918 to 2008. Rest in Peace

join:2004-08-07
New York, NY

To be honest, this might not be THAT bad of a move..

Here is what we know about Ed; he sticks to budgets and is good at keeping spending in check. Here is what we know about bankruptcy; it allows a company to get out of all its contractual obligations.

This means that Ed will be able to dissolve the wage contracts GM had with the unions (cutting costs). It means he will be able to renegotiate the pricing with distributors (cutting costs). He will also be able to renegotiate the pricing they get from suppliers. Assuming he sticks to what he knows, this means he could dramatically reduce operating costs almost immediately.

The end result will be that he comes out looking like a hero, and that he saves GM.
--
D-Day; If you can read this thank a soldier
-The United States of America-


See 16 replies to this post

Hpower
Roflmao

join:2000-06-08
Glendale, CA

Great..

"he ain't going to let you use his roads for free."

haha same as not letting anyone use AT&T's pipe's for free. What a messed up economy we have where we have big shots run a company that don't know anything about what the hell a car is. Wow, just wow.
--
The Internet is about to go down....it is actually.

See 9 replies to this post
caco
Premium
join:2005-03-10
Whittier, AK

Times are tough

Whitacre must need the money. ATT pension payments can't last forever.
--
»www.seabee.navy.mil

StarFish267

join:2005-11-25
Fort Worth, TX

Re: Times are tough

There won't be an AT & T pension if the kid that took his job Randall Stephenson has it his way.

Kessel

@speakeasy.net

It's not about the cars...

Ed was picked because he knows how to deal with a large, lumbering, 1970s-era company, and how to deal with big unions. He'll negotiate new union deals, and start lobbying with the government for less regulation and for more help against the imports. After his "successes" and AT&T, I don't see GM changing much, but perhaps it won't bleed moneys so rapidly.
public

join:2002-01-19
Santa Clara, CA

Re: It's not about the cars...

said by Kessel :

Ed was picked because he knows how to deal with a large, lumbering, 1970s-era company, and how to deal with big unions. He'll negotiate new union deals, and start lobbying with the government for less regulation and for more help against the imports. After his "successes" and AT&T, I don't see GM changing much, but perhaps it won't bleed moneys so rapidly.
Exactly. Little eddie does believe in unnecessary knowledge. He demonstrated his judgement when he selected crooked mayor Daley's brother as ceo of sbc to bribe legislators to pass favorable regulations. After $80M of bribes in Illinois alone results were weak.

Thran

join:2002-01-05
Hibbing, MN

eds expericence

well with ed running sbc and at&t for so long think he'll merge ma bell with gm?

hayabusa3303
Over 200 mph
Premium
join:2005-06-29
kudos:1

LOL

Now its the NSA in your car now.

Deep Throat

@teksavvy.com

Re: LOL

said by hayabusa3303:

Now its the NSA in your car now.

"Hello, this is On-Star.

We've noticed that your airbags have deployed. Before we can assist you we will have to get clearance from the Department of Homeland Security that you are not a threat to national security. If is determined that you are, you can appeal the ruling by filling out the forms in quadruplicate we are mailing to your home and returning them by postage-paid mail to the addresses indicated. Unfortunately no emergency services can be displatched to your location until this is done and your responses reviewed.

Have a nice day."

Hpower
Roflmao

join:2000-06-08
Glendale, CA

Re: LOL

LOL too funny

fiber_man
Things Happen For A Reason
Premium
join:2001-01-27
Port Saint Lucie, FL

Killing off another company?

Ed has done a great job as CEO of SBC. AT&T and BellSouth were good companies before this quack of a CEO took over both of them. Shareholder value has dropped like a rock and employee morale is non existent.
--
GO NOLES!!
wistlo

join:2003-01-04
New Orleans, LA

cost control

Eds' crowning achievement was the basic reconstitution of Ma Bell. He kept his eye on that ball for years, even decades, while other telecomms wandered off doing business-as-usual. One by one, the smallest baby-Bell to emerge from the breakup swallowed up formerly larger siblings.

I'm not sure that the business model of gobbling up territory and playing the regulations will work for GM, though. GM played the regulations, too, but while they were arguing about airbags and crash standars, Honda and Toyota went about building better, more reliable cars. The coming fight will be between Korean and Japanese manufacturers.

AT&T made some smart moves in acquiring bright spots on the technology front (the iPhone comes to mind), but the company certainly isn't a model of efficiency. The clumsy dismantling of a robust corps of telecommuters, for example, has proved costly in dollars, morale, and talent.

At least Ed will be seeing familiar customer satisfaction numbers in his new job.
Sammer

join:2005-12-22
Canonsburg, PA

Re: cost control

Ed knows that Qwest is still available to merge with GM!

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