New GM CEO's Chicago-Emanuel connection

[Smurf-Herder]

New GM CEO's Chicago Links
By JIM MCTAGUE

Politics-as-usual in choosing GM's new chairman?

DON'T BE HARD ON GM'S NEW CHAIRMAN EDWARD WHITACRE for confessing during an interview last week that he knows nothing about cars. He simply suffered a Joe Biden moment. Texans often tumble over their tongues when taking a stab at humility. In fact, few car companies, let alone their CEOs, know how to build cars, which is why so many of them are conking out. The Obama administration, in my view, picked Whitacre to run General Motors (ticker: GM) because he has a more important talent: He knows how to play Chicago-style politics.

Whitacre predominantly donates money to GOP causes, but he is no party purist. While serving as chairman and chief executive of SBC, the regional Bell that grew under his leadership into AT&T, Whitacre helped a couple of influential Chicago Democrats -- both friends of President Barack Obama -- enrich themselves between political gigs. He gave former commerce secretary Bill Daley a very sweet job and White House Chief of Staff Rahm Emanuel a very sweet investment-banking opportunity.

I have written about the Emanuel deal before ("Unraveling Rahm Emanuel's Fast Fortunes," Dec. 22, 2008). In short, SBC picked up a residential security outfit in acquiring telecom Ameritech and was ordered in 2000 by the Federal Communications Commission to divest itself of the property. Ameritech had sunk $1.4 billion into the subsidiary -- SecurityLink -- and SBC thought it could sell it for about that much.

Instead, it ended up selling the unit in 2001 to an investment group represented by Emanuel for $479 million. Whitacre and the SBC board signed off on the deal. The investment group, which was made up of GTCR Goldner Rauner and Covert & Whall, sold the property six months later to Dennis Kozlowski's Tyco for $1 billion.

An investment banker familiar with the deal claims there were no other buyers for SecurityLink, owing to both the tech wreck and mismanagement of SecurityLink by Ameritech, which had left its customer-billing system in shambles. The investment banker says the new owners had the knowledge to quickly repair the problems.

It was Emanuel's largest payday since he had left politics in 1998 for a stint as an investment banker. In two years, he amassed more than $16 million.

Neither White House Deputy Press Secretary Bill Burton nor GM responded to queries about the selection process.

Bill Daley, Bill Clinton's commerce secretary and brother of Chicago's popular Democratic mayor, was named SBC's president by Whitacre in 2001. His responsibilities, according to the official release, included regulatory matters, governmental initiatives, and external and international affairs. In other words, he became a lobbyist/door-opener for the corporation. He got a $1.1 million signing bonus from Whitacre, a starting salary of $600,000 and a bonus of no less than $600,000 in 2002, plus stock options, a country-club membership and a monthly car allowance, including free fuel and maintenance.

We will be watching closely to see which of the current crop of Washington bigwigs end up working for Whitacre at GM.

http://online.barrons.com/article/SB...794611291.html

[wayers57]

Originally Posted by Smurf-Herder

New GM CEO's Chicago Links
By JIM MCTAGUE

Politics-as-usual in choosing GM's new chairman?

DON'T BE HARD ON GM'S NEW CHAIRMAN EDWARD WHITACRE for confessing during an interview last week that he knows nothing about cars. He simply suffered a Joe Biden moment. Texans often tumble over their tongues when taking a stab at humility. In fact, few car companies, let alone their CEOs, know how to build cars, which is why so many of them are conking out. The Obama administration, in my view, picked Whitacre to run General Motors (ticker: GM) because he has a more important talent: He knows how to play Chicago-style politics.

Whitacre predominantly donates money to GOP causes, but he is no party purist. While serving as chairman and chief executive of SBC, the regional Bell that grew under his leadership into AT&T, Whitacre helped a couple of influential Chicago Democrats -- both friends of President Barack Obama -- enrich themselves between political gigs. He gave former commerce secretary Bill Daley a very sweet job and White House Chief of Staff Rahm Emanuel a very sweet investment-banking opportunity.

I have written about the Emanuel deal before ("Unraveling Rahm Emanuel's Fast Fortunes," Dec. 22, 2008). In short, SBC picked up a residential security outfit in acquiring telecom Ameritech and was ordered in 2000 by the Federal Communications Commission to divest itself of the property. Ameritech had sunk $1.4 billion into the subsidiary -- SecurityLink -- and SBC thought it could sell it for about that much.

Instead, it ended up selling the unit in 2001 to an investment group represented by Emanuel for $479 million. Whitacre and the SBC board signed off on the deal. The investment group, which was made up of GTCR Goldner Rauner and Covert & Whall, sold the property six months later to Dennis Kozlowski's Tyco for $1 billion.

An investment banker familiar with the deal claims there were no other buyers for SecurityLink, owing to both the tech wreck and mismanagement of SecurityLink by Ameritech, which had left its customer-billing system in shambles. The investment banker says the new owners had the knowledge to quickly repair the problems.

It was Emanuel's largest payday since he had left politics in 1998 for a stint as an investment banker. In two years, he amassed more than $16 million.

Neither White House Deputy Press Secretary Bill Burton nor GM responded to queries about the selection process.

Bill Daley, Bill Clinton's commerce secretary and brother of Chicago's popular Democratic mayor, was named SBC's president by Whitacre in 2001. His responsibilities, according to the official release, included regulatory matters, governmental initiatives, and external and international affairs. In other words, he became a lobbyist/door-opener for the corporation. He got a $1.1 million signing bonus from Whitacre, a starting salary of $600,000 and a bonus of no less than $600,000 in 2002, plus stock options, a country-club membership and a monthly car allowance, including free fuel and maintenance.

We will be watching closely to see which of the current crop of Washington bigwigs end up working for Whitacre at GM.

http://online.barrons.com/article/SB...794611291.html

I heard or read this somewhere else, it shows dc politics has turned to chicago politics.

[smithlanger]

sounds good to me its not good when someone confess for some thing we dont have to start making fun of them and having them in hot waters if some one confess it shows his or her courage to accept hos or her statements