AT&T's former CEO Ed Whitacre joins GM as chairman

General Motors on Tuesday announced that retired AT&T CEO Edward Whitacre Jr. will become chairman of the "new" GM, handpicked by the government's auto task force to lead the smaller, leaner company once it emerges from bankruptcy.

Whitacre succeeded in turning the smallest of the seven regional Bell telephone companies into a telecommunications giant and accomplishing that in a highly competitive, highly regulated consumer products business. Those skills could help at GM, which is restructuring under government supervision with the help of $50 billion in government loans.

"You have to find someone who is as comfortable knowing consumers and what they want as they are walking the halls of Washington," says Clarke Murphy, head of CEO and Board Services at executive search firm Russell Reynolds Associates. "I think he's a pretty good choice."

Whitacre, 67, told USA TODAY that he was motivated by old-fashioned patriotism to come out of retirement and take the job.

"General Motors is a great company," says Whitacre, who owns two GM SUVs: a Chevy Tahoe and a GMC Yukon. GM "is part of the fabric of this country, and it shouldn't be allowed to go away."

Current interim Chairman Kent Kresa, who was named to the post when President Obama asked former CEO Rick Wagoner to step aside, says Whitacre was on a list of names he provided to the government's autos task force.

"The final decision was the government's, and I am very positive about the way it came out," Kresa said Tuesday.

GM filed for bankruptcy protection June 1 and is attempting to use the process to split itself into a "new" GM and an "old" GM. The old GM will retain parts of the business the company can no longer sustain — plants to be closed, dealers to be shuttered and brands to be divested. It will sell the best assets to the new GM, which will emerge from bankruptcy with a smaller dealer body, workforce and manufacturing footprint.

Whitacre and Kresa, along with current board members Philip Laskawy, Kathryn Marinello, Erroll Davis Jr., E. Neville Isdell and CEO Fritz Henderson will also serve on the new board. The auto task force and GM are searching for four new members, and the United Auto Workers union and the Canadian government will choose one member each, bringing the board count to 13.

Whitacre oversaw a dozen major deals, valued at almost $287 billion, in 17 years as chairman and CEO of the telecom company. He turned Southwestern Bell into AT&T, the world's largest publicly traded telecom. He retired in 2007.

Now he's back, motivated by patriotism and a confidence that GM can be fixed. "Sure, it's having a hard time right now for a number of reasons," Whitacre says. "But it can be helped and fixed, and this country needs that" to happen.

Whitacre told Kresa he's inspired by the challenge of turning GM around, and of putting American manufacturing back on the right track.

"He understands the issue of what has to be done in order to make a successful company in a time of strife," Kresa says. "He will be very good at being at the helm at this particular time in GM's history."

Whitacre doesn't have experience in the auto industry — something he readily admits. Now that he's GM's chairman, he quips, "I guess I'll have to learn something about cars, other than how to drive them."

But Murphy says Whitacre has proved he can listen to what consumers want, and then develop products they will buy.

"As Detroit figures out what people want in a rapidly changing auto industry, he'll help," Murphy says. "He's worked in what was a rapidly changing telecom industry, and came out a survivor. And survival is a pretty important word in Detroit right now."

An example of that consumer savvy came just before he left AT&T. Whitacre decided to take a flier on a new wireless device still on the drawing board. Other big telecoms, including Verizon, had passed on it. The device? The Apple iPhone.

It remains to be seen if Whitacre can recreate that same sort of success with GM. Whitacre says he's going to try.

"I've been lucky and very fortunate, and it is time for me to give more back," he says, trying to explain why he's joining the high-profile fight to save GM. "It is a public service. I'd like to help, and I think I can. So I just decided to do it."

Leslie Cauley reported from New York