NEW YORK-John R. Walter, chief executive officer of printing company R.R. Donnelley & Sons Co., will assume the presidency of AT&T Corp. Nov. 1, AT&T’s Chairman and CEO Robert E. Allen announced Oct. 23.
Several AT&T divisions will report to Walter in his new position including: Wireless Services, Universal Card Services, Global Operations, consumer and small businesses, business markets, strategy and service operations and AT&T Solutions.
Walter, 49, also will assume the posts of chief operating officer and board member when he joins AT&T. In January 1998, AT&T plans to split the chairman and chief executive posts now held by Allen, 61, and appoint Walter CEO.
“I would expect John to succeed me as chairman at the AT&T meeting later that year,” Allen said. “John and I will partner closely with the senior team.”
The stock market apparently reacted negatively to the news. By mid-morning Oct. 23, AT&T’s share price had fallen by $1 to $38.75 on the New York Stock Exchange. At closing, after a full day of heavy trading, the stock had dropped $1.88 to $37.88.
AT&T’s board of directors elected Walter at a special evening meeting Oct. 22. The company said it had considered a number of candidates but focused on Walter because his track record meshed so well with AT&T’s needs.
Walter has spent his entire career with the Chicago-based printing conglomerate, known best for producing the Yellow Pages. He joined Donnelley in 1969 as a sales trainee and became its chairman 20 years later.
The biggest commercial printer in North America, Donnelley had sales of $6.5 billion last year and employs 39,000 people in 26 countries.
In a statement, Allen said that as top executive at Donnelley, Walter has shown the ability to transform “a large, old-line company challenged by new technologies and changing markets into a tough global competitor.” AT&T faces many of the same tasks, he said.
A day after the announcement of Walter’s appointment, Standard & Poor’s Corp., New York, announced it had downgraded all debt of AT&T and its various units, following a review that began Sept. 20.
About $9 billion of outstanding, long-term, investment-grade debt is affected, all of which was lowered one notch to AA- from AA. However, the rating agency also said it believes the rating outlook is stable.
In its report, S & P said, “The downgrade reflects financial pressure the company is likely to experience in the near term as a result of: its aggressive expansion of wireless operations and imminent entry into the local phone business; increasing competition in the long-distance market; ongoing uncertainties regarding the impact of regulatory changes on the telecommunications industry; and the current performance of its credit card receivables.”
Walter succeeds Alex Mandl, who abruptly left AT&T a few months ago to join Associated Communications Group.
