Oral Histories

Ed Block

Interview Segments on Topic: Crisis Management

Ed Block Biography

Edward M. Block was Senior Vice President -- Public Relations, Advertising and Employee Information for the AT&T Corporation for 12 years until his retirement in 1986. He was responsible for corporate communications during AT&T's historic divestiture of the Bell telephone companies and its expansion into international markets. He also held the additional post of assistant to the chairman of the board from 1980 until his retirement and was a member of the Office of the Chairman.

While at AT&T, Block was a director of AT&T International and AT&T Information Systems. He established the AT&T Foundation and was its first chairman of the board. It was on his initiative that AT&T provided the funding ($10 million a year for five years) to establish the MacNiel-Lehrer News Hour on PBS.

In 1980, PR News chose Block as the Public Relations Professional of the Year. In 1993, he received the lifetime achievement award from Inside PR and also, the Hall of Fame Award of the Arthur W, Page Society. In 1997, he received the Gold Anvil from the Public Relations Society of America. Most recently, he was cited by PR Week as one of the 100 most influential public relations people of the 20th century.

Transcript

Foster:  Well again to put it into perspective. You worked for Charles Brown the Chairman and CEO of AT & T.

Block:  Right.

Foster:  And I believe in addition to being in charge of communications for the entire corporation, you also were the assistant to the chairman were you?

Block:  Yes, at that time yes.

Foster:  That brought about a very close working and personal relationship.

Block:  yes yes.

Foster:  Where were you and where was Charles Brown when that decision was handed down?

Block:  Well the story goes like this; that it was not a surprise to me or to any of my colleagues and senior management because what you do try to settle a case if you can. And so we had, so I knew that was being worked on. As a matter of fact this was in the Reagan Administration. We actually had achieved a handshake with the Carter Administration, but when President Carter lost the election to Ronald Reagan, his guy said, “No last minute deals are going to go into the history book with our fingerprints on them.”  So in any case so it was not.  I had actually done a plan for that earlier with the Carter Administration. So this was not a big surprise to me, but anyway here’s how the story unfolded.  I was sitting at my desk at 195 Broadway, not the palace on Madison Avenue.  And Charles Brown called me on the intercom as he frequently did and said can you come into my office.  It was right around the corner from his office.  And so as I stepped out of my door, I ran into our vice president and general counsel, a man by the name of Howard Trienens, and it was evident we were both going to the same location so we went into Charles Brown’s office.  And he said that now, by the way, this general counsel obviously led the AT & T negotiations on the settlement so it sure wasn’t any surprise to him.  But in any event, we go into Charles Brown’s office and he said, he said I’m ready to recommend to the board of directors that we make a settlement with the Justice department. This thing can go on for another ten years, that’s a lot of lawyer fees, and worse in an anti-trust case, when the government is trying to break it up.  We were no longer a 100 percent monopoly at that time, but we dominated the industry.  You don’t know what business you are in, or may be in five years down the road, and so you know Charlie was aware of those kinds of considerations.  We were running an annual construction budget of $25 billion, and how do you know what to invest in?  How do you know what to tell the Bell Laboratories to invent, I mean you know.  So anyway, Charlie said I’m prepared to recommend to the board that we accept, and then interestingly enough he turned to Howard and he said;  “Where do I go? How do I lay down my sword?”  And Howard said well it’s not as simple as you think it is, but it can be done.  And he explained not to get into too much detail, but we were operating under a consent decree signed in 1954, so you had to go back to that court, ask them to vacate that decree and then take the new decree to the new court and get it approved. So you’ve got two different judges. And those guys have egos as it turned out, and anyway, then Charlie turns to me and he said, you have to demonstrate to me or you have to show me that we can plausibly explain this. Meaning all those shareowners and all those employees and all those customers effected. You know you can’t just send them a postcard. So is there, can we explain this plausibly, because we’ve been fighting that case you know as they say “vigorously.”  You know and it had been running for some years, so anyway that’s what he said to me.  So he said. “Ed, get to your typewriter.”  In those days we were still using two typewriters, dates it for sure, so anyway that’s how the news came to me.  I went, we talked a little bit longer and believe it or not I went to you’ll recall we got an apartment in Manhattan on 52nd Street and I went home.  In the laundry room I had a little desk and an old Olympia typewriter, and a lot of coffee.  And so I did it, took me about two days I guess. I did the whole plan. How we were going to announce it.  How it was to be arranged.  How it was to be done, all of the details.  And then came back to Charles Brown’s office a couple of days later. I worked pretty much night and day, because you know the biggest fear is a leak.

Foster:  Sure.

Block:  And so anyway, I bring it back to him and I say take him through it.  He said okay to me, what’s next.  So that’ how it unfolded, but if I may, unless you want me to stop talking about this, there were a couple of other…

Foster:  No I want you to carry on, but it’s curious that one of the most dramatic and important business stories and press releases of all time, was written in the laundry room.

Block:  On an old German typewriter.

Foster:  On an old German typewriter.  Oh that’s wonderful. Go ahead, tell me some of the

Block:  I didn’t have any distractions as I was working on it.  What I was going to say, some of the lessons that would be true today even though that case is history. And the irony of the whole Bell System is put back together again, in the form of two companies, the new AT&T and Verizon.  So, but anyway, one thing I said to Howard in that first meeting, I said we have to have a joint press conference with the Justice Department.  It’s, it’s very important and that has to be a condition of this agreement.  And what was in my mind was, you would know and Howard got it and Charles Brown got it immediately. An announcement like that was going to set off media frenzy, and so what you want to do, is you get both sides together at the same time and the same place and tell the story.  So that you don’t have reporters, you know, we announce it and then the reporter calls the Justice Department and says AT&T is saying so and so what do you say to that?  And you know that goes on forever and to get a coherent story out of a zillion reporters you know doing that is you’re going to have chaos, so I did say joint press conference.  Well, as it turned out, the assistant attorney general for anti-trust was okay with him.  He was a by the way, he was a college professor at Stanford, and so we did have a joint press conference and that really helped the reporters get the story straight.   But, it made it possible to tell the story one time, one way, one place, and stick to it.  And that’s what we did on a Friday afternoon in Washington at the Overseas Press Club. There were about, as I recall, about 110 reporters attended the press conference.  And that weekend I recall going from memory just in the AT&T PR department, not in the Bell companies but we fielded 4,000 queries.

Foster:  Did you really?

Block:  That weekend.

Foster:  4,000

Block:  4,000, so anyway, you know lesson number one if you got a story with that kind of impact, it’s just, you have to find some way to tell the story one time, one place, or you’ll have a train wreck on your hands.

Foster:  Exactly.

Block:  And we were able to do that.  I think another lesson. you inferred this earlier, but the, the my boss Charles Brown but the whole top management at AT&T and the Board of Directors, what we were able to do was really a credit to the public relations department, not to me personally.  But to the PR department, that we presented a plan to announce that thing to the whole top management, all the CEOs of the Bell companies to our own board of directors and you know thinking back on it later I thought to myself. That’s amazing that no one said you’re not going to bring in an agency to do this or let me tell me that again. I don’t like that you know and blah, blah, blah. They all just said great plan, and that was so.  And the third thing I think, Larry, is well, I did the plan in two days because of the danger of leaks. At least I had an opportunity to think it through. I mean it didn’t come flying in over the transom as it so often happens to chief public relations officers.  That they don’t know until the last minute.  I was in on it from the first minute. That made a huge difference. And we were also able to mobilize not only the chairman of the board as the principle spokespersons but person, but we were fortunate that we had a president, Bill Ellinghaus, you know him well.  And two vice chairs, who were very polished with the news media, and they were good at it.  So I was able to give them the talking points and so in fielding those, and by the way we all lived in our office building through that whole weekend, so it was impressive to a reporter who calls in and we say do you want to talk to Charlie Brown? Hang on a minute. Press the button, he’s on the line.  And Bill Ellinghaus, and what not. So we had four really good authoritative spokesmen and of course all the rest of us ink-stained wretches in the PR department who could, you know could handle whatever came in and we did augment our media relations group by hand picking people elsewhere who might have been on jobs elsewhere in the public relations department, but had plenty of experience. So, we were able to get through that weekend and the last thing I, in anticipating this train wreck or this media frenzy, I wrote an ad, a full page ad to run in the morning papers the next day, all the metropolitan papers in the United States, and I did that for fear that the story would not come out as clearly and as accurately as it did.  And we, we hired different financial print shops in New York City, gave them each a paragraph or two of the ad so no one ever saw the whole ad, and then we had individuals get on airplanes and fly out to the markets and deliver the ad to newspapers.  Well it turned out that the reporters got it right and got it straight and that really was superfluous. The other thing I think we did maybe not everybody who ever listens to this will have the same thing, but in a company that has a lot of different divisions and business units and what not, we, we call the presidents of the Bell companies into New York or New Jersey and I took them through the plant and Howard Trienens took them through the steps in the courthouse. And I asked each of them as soon as we had made the announcement to have their own press conference in their headquarters city, because they had the employees; they were theirs, not ours. They had the customers. They were not AT&T headquarters customers, they were the Bell customers, and but one exception, not one of those CEOs freelanced or made a boo-boo. I sent them a packet by courier the night before with everything they needed for a press conference and they had the conferences at noon the next day, and that helped a lot, because they were talking to their customers. They were talking to their employees, and they were talking to the news media that covered their company. And I think that sometimes we forget to do I don’t know whether it was me who thought of that or somebody else. But sometime we forget, thinking well the whole show is the chairman of the board. Well it’s not.  If you are a big company with a lot of people scattered all over the place, employees and customers, it’s, it’s important to have the person they look to as the head guy, not the chairman of the board of the holding company.

Foster:  Ed from that point how long did it take for the break up to become operational?

Block:  Well the judge believe it or not I mean the judge in the in the court where the anti-trust case was conducted, he gave us 18 months to get it done. And it was again Charles Brown whose belief was that we can do this, and the sooner the better. I mean the decision is made. Don’t drag it out. And the judge also said, another funny story, he said this is the judge in Washington. He said you have six months left to use the logo. And the Bell name and it’s gone. And you see we never. We always spoke in terms of the Bell Company or a particular Bell Company. I mean our whole communications, I mean strategy was not AT&T, so unless you were a shareowner, you didn’t know very much about AT&T, because we advertised as the Bell Telephone System. And you know all had the same logo, so the judge anyway said six months and I blew up, I, to our general counsel, not to the judge and I said that’s crazy. I mean we own that logo. It’s owned by AT & T, it has been from day one. What does he mean telling us we can’t we can’t use it anymore. And so anyway, so Howard and I went down and talked to the assistant justice department high command and they were dubious about it, but they said okay. We’ll join you in a petition if that’s the way you feel, and ask the judge to reverse himself. Took him about ten seconds to read that petition and say that’s the way it’s going to be, you don’t have a logo. So we scrambled around, I won’t get into the details of it because we. But our design firm was out in Los Angeles, who did our identity stuff, and so we told them we had to have a new logo and we discussed it with them on the phone. And they flew into New York on a Sunday afternoon and I had rented a hotel suite because I didn’t want to do this in the office where that kind of stuff lands in garbage cans and you find it on the front page of the New York Times the next day. So anyway, so we were in this hotel room and we’re crawling around on our hands and knees pushing layouts around on the floor and the Bell, the new AT & T, had modified it somewhat but that Bell is what emerged from our crawling around the floor.

Foster:  Really.

Block:  And somebody asked me well why do you like that. And I said well it strikes me and this is giving away my age again, but I said it strikes me that it’s durable. You know it looks like a guy in a blue blazer with grey pants you know and it probably will be in style for a while. So anyway that was the deal there But 18 months to get the complete job done and…

Foster:  How many companies were there, Bell companies that…?

Block:  Well there were 26 Bell Telephone Companies, plus a manufacturing company, which was Western Electric in those days.

Foster:  Bell Labs.

Block:  Bell Labs and of course each of those companies had subsidiary companies, so, but the people, the top of each of those pyramids was a Bell Company, except for Western Electric.

Foster:  That’s absolutely great business history, told by someone who had a critical role.  And I now want to take you to the formation of, well let’s talk a little about Arthur Page.

Block:  Before you get to that there’s one last thing. If there’s anyone watching this who is crazy enough to want to know more of the details about the break up, there are two terrific books, one by Steve Call I think the book is entitled Last Call I think. Steve Call who was then with the Wall Street Journal, but he did not cover us, but he undertook that book and it’s great. And the other one is a scholarly book by two professors, one at Johns Hopkins and one at, I believe, the management school at MIT. And I believe that one is called the End of the Bell System or something like that.

Foster:  Both good books.

Block:  Excellent books and they are widely available in libraries so I just wanted to throw that in.