ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 24, 1996 TAG: 9610240027
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
NEW YORK
AT&T Corp. on Wednesday reached outside the telecommunications industry for a new president, picking the chairman of Yellow Pages printer R.R. Donnelley & Sons to lead the company as it faces new competition from all sides.
Beyond simply the No. 2 job, AT&T made it clear that John R. Walter will succeed chairman Robert E. Allen, who plans to step down in 1998. The choice ended some anxious speculation on Wall Street and beyond.
Walter, 49, seemed energetic and confident as he faced the media to announce his appointment.
``All anyone really knows about AT&T's future is it will be radically different from the present, and clearly from the past,'' he said. ``So to assume a leadership role at AT&T is really the opportunity of a lifetime.''
Wall Street was somewhat less excited about AT&T's choice to fill the key vacancy, which was created when Alex J. Mandl caught the industry off-guard and abruptly resigned in August. AT&T's shares were off about 5 percent on the news of Walter's appointment.
Mandl's departure came at a difficult time for AT&T, just as the company was working to implement a three-way split. Now two-thirds complete, it will still create some interesting challenges for Walter going forward.
Other tasks also face AT&T, the biggest long-distance company. It is working to enter the local phone business as others, most notably its Baby Bell offspring, jump into long-distance. It also wants to expand its Internet and wireless offerings.
Allen began his comments Wednesday afternoon sounding somewhat defensive about his little-known choice, conceding AT&T had ``considered a number of candidates who might have had more marquee value.'' He cited Walter's lack of telecommunications experience and relative youth.
``Yet, I and the AT&T board are convinced that he's the right person for the job at this point in AT&T's history,'' Allen said.
Primary among the strengths Allen complimented was Walter's success, as head of Donnelley, in transforming an old-line printing company amid new technologies and changing markets into a global competitor. Those are skills also needed at AT&T.
AT&T's board elected Walter at a special meeting Tuesday evening. One key issue in the appointment, effective Nov. 1, was the company's top job.
Walter, who began at the Chicago-based printing company as a sales trainee in 1969, became its chairman 20 years later. R.R. Donnelley & Sons Co., the biggest commercial printer in North America with sales last year of $6.5 billion, employs 38,000 in 26 countries.
It produces catalogs, inserts, magazines, books and, among other things, directories like the Yellow Pages. It prints Yellow Pages directories for 35 publishers, such as Southwestern Bell.
(Donnelley is building the first phase of a $102 million book factory in ValleyTech Park west of Salem. The company has said it will hire 175 workers to begin production by next May.)
On Wall Street, both AT&T and Donnelley stock fell on the news. In New York Stock Exchange trading, AT&T fell $1.871/2 to close at $37.871/2 a share and Donnelley was down 12 1/2 cents at $30.50.
Donnelley said in a statement it has named John M. Richman, an outside director, as acting chairman and CEO to replace Walter and will immediately begin looking for a successor.
LENGTH: Medium: 66 lines ILLUSTRATION: PHOTO: (headshots) Walter, Richmanby CNB