In a shock appointment, AT&T has appointed a man from outside the telecomms world to the role of chairman and chief operating officer. Shares fell on fears that John Walter, head of the US? largest printing company, RR Donnelley and Sons, lacks the relevant experience to be heir apparent to the chief executive, Robert Allen.
Two recruitment consultancies, Korn/Ferry International and Spencer Stuart, were charged with finding 30 suitable candidates to replace Alex Mandl, who departed in July despite assumptions that he would replace Allen when he retires in January 1998. The final choice has surprised all pundits, who were betting on candidates from within the IT and telecomms sectors - top tips included George Fisher, head of Eastman Kodak, John Barksdale, president of Netscape, and William Esry, chairman of AT&T rival Sprint.
Walter was selected by both headhunters. He has spent his whole working life at RR Donnelley, joining it as a sales trainee. Under his leadership it has become the biggest printer in North America, with an annual turnover of $6.5 billion. It specialises in printing telephone directories.
Walter will have a massive task at AT&T, which has been under-performing and announced the axing of 40,000 jobs, plus the spin-off of non-core units, in January.
Allen is retiring four years early, saying no one should be in charge for longer than a decade. In a statement he said: ?I?m confident John Walter brings leadership qualities that will make the new AT&T successful, not only in the hotly contested long distance market, but across the whole range of rapidly growing communications services.? Few people appear to share the convictions of the executive board, which elected Walter unanimously. Many AT&T watchers are asking whether a man with no experience of the telecomms industry should be given the reigns of the $52 billion company. On the day of the announcement shares fell $1.875 on the New York Stock Exchange, closing at $37.875.
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