Whitacre, Edward E. Jr. 1941–

views updated

Edward E. Whitacre Jr.
1941–

Chairman and chief executive officer, SBC Communications

Nationality: American.

Born: November 4, 1941, in Ennis, Texas.

Education: Texas Tech University, BS, 1964.

Family: Son of a railroad engineer and wife, names unknown; married Linda, a university regent (maiden name unknown); children: two.

Career: Southwestern Bell Telephone Company, 1963–1977, facility engineer; 1977–1982, assistant vice president in engineering and network services; 1982–1985, president of Kansas division; 1985–1986, group president; 1986, vice president of revenues and public affairs; 1986–1988, vice chairman and CFO; 1988–1989, president and COO; 1990–1994, chairman and CEO; SBC Communications, 1994–, chairman and CEO.

Awards: Inductee, American Academy of Achievement, 1997; Business Hall of Fame, Texas, 1997; Freeman Award, Greater San Antonio Chamber of Commerce, 1997; International Citizen of the Year, San Antonio World Affairs Council, 1997; Spirit of Achievement Award, National Jewish Medical and Research Center, 1998; Top 25 Executives of the Year, BusinessWeek, 1998; Best CEOs in America, Worth, 1999; Business Hall of Fame, San Antonio, 2000; Silver Buffalo Award, Boy Scouts of America, 2000; Corporate Leadership Award Nominee, National Minority Diversity Council, 2001.

Address: SBC Communications, 175 East Houston, San Antonio, Texas 78205-2233; http://www.sbc.com.

■ Edward E. Whitacre Jr., the six-foot-four-inch native Texan known by friends and colleagues as "Big Ed," was chairman of the board and chief executive officer at the global telecommunications giant SBC Communications as of 2004. During his reign at SBC, which began in January 1990, Whitacre led the company—with his trademark focus on diversification,

financial control, strategic acquisitions, and shareowner value—from being the smallest of the regional Baby Bell companies into one of the leading full-service telecommunications companies in the world.

SBC was one of 30 prestigious companies factored into the Dow Jones Industrial Average in 1999 and was consistently ranked high on the Fortune 500 list, amassing operating revenue of $40.8 billion and a net income of $8.5 billion with the help of over 175,000 employees. Through the company's powerful affiliates—including Southwestern Bell, Ameritech, Nevada Bell, Pacific Bell, Southern New England Telecommunications, and Sterling Commerce—Whitacre and SBC delivered a comprehensive set of telecommunications services, including local and long-distance telephone, wireless communications, high-speed DSL (digital subscriber line) Internet, web hosting, network integration, and business-to-business e-commerce solutions. As of 2003 nearly half of the Fortune 500 companies were headquartered in states served by SBC companies.

While SBC serviced about 57 million access lines nationwide in 2004, covering about one-third of the U.S. population, the company concentrated primarily in the 13 states with its largest markets: California (formerly served by Pacific Bell), Texas (Southwestern Bell), Illinois (Ameritech), Arkansas, Connecticut, Indiana, Kansas, Michigan, Missouri, Nevada, Ohio, Oklahoma, and Wisconsin. Other wire services provided by SBC included long-distance telephone, with over 14.4 million access lines, and Internet access, with about 3.5 million subscribers to DSL broadband services. SBC companies have telecommunications investments in 26 other countries worldwide.

In 2000 the company combined its U.S. wireless operations with those of BellSouth to form Cingular Wireless, the second-largest U.S. wireless company—behind Verizon Wireless—serving more than 24 million customers. As of 2004 SBC companies owned 60 percent of Cingular, the leading U.S. provider of high-speed DSL Internet-access services and one of the country's leading internet service providers.

GROWING UP AVERAGE

Whitacre was the son of a railroad engineer and spent much of his early years shooting rabbits in the fields and trapping frogs along the creeks near the tiny railroad town of Ennis, Texas, about 40 miles south of Dallas. He displayed a competitive but cooperative nature even in grade school, when after receiving a new football uniform he gave his old one to a friend so that they could practice against one another. In high school Whitacre was a first baseman and a defensive end in baseball and football, respectively; he was remembered as a player who could easily overpower his opponents. Most classmates expected that the popular Whitacre would find a job at the local railroad, perhaps going as far as middle management. As quoted by Roger Crockett in BusinessWeek, one childhood friend later remarked, "I would never in a million years have thought that he would go on to do such big things'" (April 12, 1999). But someone else did want something better for him: his father told him to go to college; he would eventually be the first person in his family to do so.

WOULDN'T TAKE NO FOR AN ANSWER

Whitacre gained direction during the summer after his junior year in college, when he looked for work at the Dallas telephone company Southwestern Bell. The manager told him that there was nothing to be done; but Whitacre was stubborn, offering to do even the most menial of tasks and refusing to depart. At length the manager reconsidered and hired him to hammer in fence posts and measure telephone wire.

SOUTHWESTERN BELL

Whitacre began his career with Southwestern Bell Telephone Company under more legitimate terms in September 1963 as a facility engineer in Lubbock, Texas. In 1964 he earned his bachelor's degree in industrial engineering from Texas Tech University. He progressed through numerous assignments within Southwestern Bell's operational departments in Arkansas, Kansas, and Texas. In July 1977 Whitacre was named assistant vice president of engineering and network services in Dallas, Texas.

Beginning in September 1982 Whitacre was made president of Southwestern Bell's Kansas division, which he led through the breakup and sale of the Bell conglomerate. In March 1985 he moved to corporate headquarters, where he served as group president in charge of all of the company's nontelephone operations. In April 1986 he was named vice president of public affairs and revenues and had responsibilities for Southwestern Bell's federal and state regulatory and legislative initiatives. In October of the same year Whitacre joined Southwestern Bell's board of directors and was named vice chairman and chief financial officer.

In October 1988, after convincing the board members of his cooperability, straightforwardness, and toughness, Whitacre was made president and chief operating officer of Southwestern Bell. In that position he was responsible for the operation of the company's six main subsidiaries. On January 1, 1990, Whitacre became chairman of the board and chief executive officer. He had also been a director of Southwestern Bell since October 1986, the chairman of the Executive Committee, and a member of the Corporate Development Committee and the Finance/Pension Committee.

LEADING SBC TOWARD GROWTH

Whitacre initially began his company's drive for growth in September 1994, when a name change occurred—the new name, SBC Communications, would better identify the company as a diversified, global communications company. The passing of the Telecommunications Act in February 1996 provided Whitacre with the ability to rapidly increase SBC's growth as a national communications provider. (The Telecommunications Act of 1996 allowed any communications company to compete in any market in the United States, thus removing the restrictions that had previously limited where such companies were allowed to operate.) Whitacre guided SBC through an era of unbelievable expansion, leading a series of mergers, acquisitions, and formations that dramatically changed the telecommunications landscape. Among these acquisitions were those of Pacific Telesis Group in 1997 for $17 billion (the first merger of former Bell companies); Southern New England Telecommunications in 1998 for $4.4 billion; Comcast Cellular in 1999; Ameritech in 1999 for $62 billion (at the time, the largest telephone-industry deal); and Bell-South in 2000.

The deal struck by Whitacre to obtain the San Francis-co–based Pacific Telesis formed an 118,000-employee telecommunications company serving the country's two most populous states, California and Texas, and seven of the country's top 10 markets. The Comcast deal introduced additional service areas in Pennsylvania, Delaware, and New Jersey and 800,000 customers. The Ameritech deal allowed Whitacre to enter the $80 billion long-distance business and 30 U.S. markets outside its existing regions—making the company the leading U.S. provider of local telecommunications service and giving it access to the top 50 markets in the United States. In 1999 the company engaged in a $6 billion initiative called Project Pronto that allowed fiber-optic networks to become available to about 80 percent of its customers, many of them rural customers without previous access to such advanced products and services.

Whitacre expanded SBC into the worldwide wireless communications business with investments in Teléfonos de México (Telmex), Bell Canada, and Telkom South Africa. The Telmex partnership, which provided local, long-distance, and wireless service to Mexican customers, solidified SBC's position as a strong international player and acted as a catalyst for additional global ventures.

Such expansion allowed Whitacre, once dubbed Baby Bell's Acquisition King, to offer long-distance service in all of the 13 states in SBC's primary region. As a result the company was capable of capitalizing on new opportunities in voice and data revenue, maximizing market competitiveness, markedly strengthening the company's already impressive portfolio of products, upgrading its national data and Internet Protocol strategy and networks, and improving efficiency throughout its network.

DIFFERENTIATION AND ESTABLISHING A NATIONAL BRAND

When uncertain times prevailed within the telecommunications industry during the recession years of 2000–2002, Whitacre set SBC apart from other telecommunications companies by promoting its financial strength and stability. Such advertising campaigns as "Who We Are" aggressively emphasized SBC's commitment to the customers and communities it served. Whitacre proudly touted SBC's system of world-class networks across the United States and the common desirable qualities that each affiliate brought to the SBC family of companies.

In 1999 Whitacre introduced the SBC brand to customers across the country, eliminating regional brands—such as Southwestern Bell, Pacific Bell, Nevada Bell, and Ameritech—to make way for the single, unifying national brand of SBC. Whitacre wanted to make it as easy as possible for SBC's customers to find and do business with SBC companies nationwide. With the introduction of the nationally recognizable name, Whitacre had fully transformed SBC into a major communications-services company.

FOCUS ON SUCCESS

Whitacre had a soft-spoken Texas drawl that often hid his fiercely competitive nature. After 1998 earnings climbed 20 percent to $3.9 billion on sales of $27 billion and the first two of his major acquisitions were finalized in the late 1990s, Whitacre said in BusinessWeek, "We can sit here and get picked on or get bigger and have more clout" (January 11, 1999).

SBC was named the World's Most Admired Telecommunications Company by Fortune magazine for the sixth consecutive year in 2003, having held the top spot since the award was first introduced. Fortune also named SBC as America's Most Admired Telecommunications Company for the seventh time in eight years. Whitacre continued to create long-term value for company shareowners by providing reliable and innovative telecommunication services—a task that was successfully accomplished by Whitacre and his predecessors for over one hundred years.

Whitacre was once named among the Top 25 Executives of the Year by BusinessWeek and was listed as one of the Best CEOs in America by Worth magazine. Within his company, Whitmore was a member of SBC Pioneers, a volunteer group dedicated to making a significant difference in communities served by SBC companies. He also earned a number of awards for his contributions to business, educational, and civic programs, including the Greater San Antonio Chamber of Commerce's Freeman Award, the Spirit of Achievement Award from the National Jewish Medical and Research Center, and the International Citizen of the Year Award from the San Antonio World Affairs Council. He was inducted into the Texas Business Hall of Fame and the American Academy of Achievement.

Whitacre concentrated on promoting diversity within SBC companies and suppliers. Fortune and Working Woman magazines, along with the Women's Business Enterprise National Council, the National Minority Business Council, and the National Minority Supplier Development Council, recognized these efforts. Whitacre and SBC Communications were presented with the Ron Brown Award, the sole presidential corporate-leadership award, to commend the company's supplier diversity program.

OTHER DUTIES

To accompany his responsibilities within SBC, Whitacre served on the board of directors of Anheuser-Busch Companies, Burlington Northern Santa Fe Corporation, Emerson Electric Company, and The May Department Stores Company. He was also on the board of the Institute for International Economics and a member of The Business Council.

See also entry on SBC Communications Inc. in International Directory of Company Histories.