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Title:
Interview with William J. Warwick, September 24, 2008
Date:
September 24, 2008
Description:
Bill Warwick grew up on Princess Place in Wilmington, attended Isaac Baer School and a 1956 graduate UNC-Chapel Hill After earning a Masters in Business from North Western Chicago, spent 6 months in Army Reserve, was hired by Western Electric in Burlington, NC. Bill and wife Jacie moved 15 times in 39 years and bought or built 26 homes during his career with AT&T (Western Elect. merged) and climbed the corporate ladder to eventually become the No.1 American businessman in China, as Chairman AT&T China in 1990's. He discusses doing business in China in 1980's, especially how a small village of 2500 in Southern China, became an industrial city of 2.5 million 15 years later, due to AT&T building and training in this area. Hear Mr. Warwick discuss changing China, the politics and business practices, the cultural and educational advances, and the patience of it's people and his warning to us in the west. "A mistake to underestimate Chinese, particularly their economic view, and as suppliers and consumers". This interview is of particular importance today, and should be available for all students and those in business.
Phys. Desc:

Interviewee: Warwick, William J. Interviewer: Jones, Carroll / Sweeney, Kate Date of Interview: 9/24/2008 Series: SENC Notables Length 62 minutes

Jones: Today is Wednesday, September 24, 2008. I'm Carroll Jones with the Randall Library Special Collections Oral History Program and we're in the Helen Hagan room of special collections. We're very pleased to have as our guest this morning Mr. Bill Warwick, a Wilmington native, who has returned to his roots after a fascinating and illustrious career of world travel. Bill has spent a considerable amount of time outside our country and also in China and has had the good sense to return to his native roots. Good morning, Bill, and thank you for visiting us.

Warwick: Thank you.

Jones: Let's start off by your telling us about your early years here in Wilmington growing up here a little bit, what it was like then and we'll go from there, see what moved you to be a wandering boy.

Warwick: I'm not sure that I knew back then that I would leave but I was born here in 1934 in Wilmington at what was then the old original James Walker Memorial Hospital and grew up here in a normal childhood kind of basis. I went to grammar school at Isaac Bear originally which later became Wilmington College. And then a new school called Chestnut Street Elementary was built and I attended that school and finished there and that was only within a couple of blocks of our home which in those days was at 1805 Princess Street. We lived there from the time I was about eight years old until I was out of college.

Jones: Where did you go to college?

Warwick: I went to UNC Chapel Hill.

Jones: Good boy.

Warwick: And from 1952 to 1956. I finished there and went to graduate school at Northwestern University in Chicago, at the Chicago campus to the graduate business program at Northwestern.

Jones: How did you like the change in weather from this North Carolina balminess to the Chicago climate?

Warwick: Well it was fun and I enjoyed being there.

Jones: You were young.

Warwick: And I went there because a professor that was my advisor at UNC Chapel Hill, a man named John O'Neill, had graduated from Northwestern and he told me I needed a different perspective. I had applied to Wharton in Philadelphia and had been accepted, but he convinced me that if I went to Northwestern I would get an entirely different perspective from what I got at Carolina but if I went to Wharton it would be very similar from a perspective point of view. I went and I thought it was an excellent choice and I loved being there. I was there 12 full months.

Jones: Wonderful, wonderful.

Warwick: And because I was a business graduate at Carolina I did not have to take all of the basic courses that you would have to take going into an MBA program.

Jones: Oh really? Oh, okay.

Warwick: I got credit for the things I had had at Carolina.

Jones: When you went to Carolina were they accepting women from freshman year on or was it still just _____ school?

Warwick: Only in the School of Nursing and I think that's the only one in those days and then it was much later after I graduated that they started accepting women on a freshman basis throughout the university. Women transferred there after two years and so--

Jones: How did you like that atmosphere as a young fellow? It must have been devoid of--I guess it left you more time to do your studies rather than be interrupted with the--

Warwick: Well you tended that but you tended to go over to Raleigh or to Greensboro, okay, to date, so it put you on the road more often.

Jones: What's that called a suitcase campus?

Warwick: That's right.

Jones: Yeah.

Warwick: But we thoroughly, I mean it was a great facility and I loved being there in Chapel Hill, it's still a good place in my memory.

Jones: Are you still active with the alumni association at all?

Warwick: Not as much as I used to be. I used to be fairly active there and I served on several boards with the Chapel Hill, not the Cameron School of business, that's here, but the Flagler School of Business.

Jones: Flagler.

Warwick: For a number of years, but as I got more involved here I transferred a lot of my allegiance to UNCW.

Jones: A lot of people have--my husband included have done that, yeah.

Warwick: And it's because UNCW doesn't have the number of people and the graduates and a long, huge alumni association that Chapel Hill has.

Jones: Right.

Warwick: And Chapel Hill has a lot of people to draw from and they don't need people like me as much but UNC Wilmington does.

Jones: That's the way he feels. We've heard this from several people. So you graduated in 1956 from Chicago, from Northwestern in Chicago.

Warwick: In 1957.

Jones: No, I'm sorry.

Warwick: Fifty-six in Chapel Hill, '57.

Jones: Yeah, okay, get this straight and then what happened?

Warwick: Well I came back home and waited to be called into the service because see in those days we had a draft. I had been deferred all the way through Chapel Hill.

Jones: Good.

Warwick: And all the way through graduate school and had been in the reserves and so I had to pull some active duty time and so I went in the army and spent-in those days you could get six months active duty. And I was down at Fort Jackson in South Carolina and spent my time there. And when I finished, well the army would let reservists in the last three months of their tour go for job interviews.

Jones: Oh, really?

Warwick: So you could get a three day pass to go for a job interview.

Jones: How accommodating.

Warwick: And I had a job interview with the Western Electric Company in Burlington, North Carolina. That came about because my background was in finance in terms of education. I had every intention of going into banking but since I had to pull this active duty I had deferred making a decision about which company. At a wedding of my roommate in college his father worked for Bell Labs in Burlington and he suggested to me that I might want to apply that Western Electric was hiring MBA graduates. And they had a program and he thought I might find it interesting. So sort of on a lark I sent them an application and they asked me to come up for an interview. I went for an interview. I liked what I saw and I thought I can always go into banking. This sounds very interesting. Why not give it a try?

Jones: Now this was in Burlington at Western?

Warwick: In Burlington at Western Electric.

Jones: Western Electric. Uh-huh. You never know. Life is funny.

Warwick: And so I went there and that led to my 39-plus year career at AT&T which owned Western Electric, but it started in Western Electric and the first 25 years of it was in Western Electric.

Jones: That's amazing. That's amazing 39 years at the same place. Now tell us you didn't stay--did you start off in Burlington working?

Warwick: I started off in Burlington and I was there four years. Then I got transferred to New York City.

Jones: How did you like New York City?

Warwick: We lived in New Jersey. I started out working on my first assignment up there was with Bell Laboratories and that was very close to where we lived. Then I got transferred into the city and was there a couple of years. This is a long litany. We moved 15 times with Western Electric.

Jones: Oh in how long?

Warwick: We have lived in 26 different houses.

Jones: Fifteen times with Western, 26 houses. Did you buy a house each time you moved?

Warwick: Yes.

Jones: Uh-huh. Gees, now that was over how long a period of time?

Warwick: Over the whole 39 years.

Jones: Overall, okay.

Warwick: But in total out of that period of 39 years, 22 years were spent in New Jersey.

Jones: Twenty-two years.

Warwick: Either working in New York or working in New Jersey. But in many different times and usually the longest time initially was four years and that was the first time we were there. I was there as short as nine months and there as long--well the last time I was there because then I was at headquarters so we were there for 12 years.

Jones: So you got to unpack your bags that time?

Warwick: Yeah that time we got to unpack our bags.

Jones: How was this on your wife? I mean you had children obviously.

Warwick: We had two children, two sons, and they were very good movers.

Jones: They were adaptable.

Warwick: But they all had to start over every time.

Jones: Yeah, sure.

Warwick: Except when we came back to New Jersey sometimes we had only been gone for nine months or something and so when we came back they could adjust and we tried to live in the same place all the time.

Jones: I was going to say did you save that one house?

Warwick: We tried to. We didn't. Not that one house but in the same town.

Jones: In the same town.

Warwick: Or in the adjacent town and New Jersey it's like a commuter city, one right after the other.

Jones: That's right.

Warwick: And so they were able to start and finish high school in the same place.

Jones: Well that's good, that's good.

Warwick: In the same high school but they adjusted very well. However, I will tell you that neither one of them wanted to live that kind of lifestyle. When they got married and had children of their own they both lived in the same place.

Jones: What kind of work did you do, Bill, where you had to move so often? And obviously you were not moving laterally in the company. Obviously you had to have been--

Warwick: In those days, there was a philosophy and this is especially true in large companies that the way you got real experience was to be put in a lot of different assignments and in a lot of different environments.

Jones: I guess that was why IBM was called I've-Been-Moved.

Warwick: That's right. And we had the same kind of philosophy when I grew up in the company. That's the way you did it and so if you were going to advance in the company then you had to take these transfers.

Jones: Right, mm-hmm, yeah I guess so.

Warwick: Yeah and so we took a lot of them and we worked in Shreveport, Louisiana. We left New Jersey and went to Shreveport and 13 months later came back to New Jersey.

Jones: You know that's a body temperature change as well as anything else.

Warwick: And then we were there 18 months and then the last six months of that I was sent to what we called in the Western Electric Company in those days charm school, but it was a management training program. You were taken off of your job and for six months you lived, we lived at the downtown athletic club in New York City and we attended it.

Jones: That's nice.

Warwick: We had class responsibility all day long, but we lived together. There were 13 of us.

Jones: Right.

Warwick: And we lived together in the downtown athletic club and then when we left, finished the school, we all got a different assignment and in a different geographic location.

Jones: But you knew each other well enough to communicate and to help one another.

Warwick: Sure, they were career friends.

Jones: So that was a good message really.

Warwick: Yeah. And then we went to Indianapolis.

Jones: Now that's a change, the Midwest.

Warwick: And we were in Indianapolis nine months, came back to New Jersey but most of the time these weren't promotions and back to New Jersey and lived in New Jersey two years and then transferred to North Carolina and we were in Greensboro for two years, then to Cincinnati, Ohio for two years, Columbus, Ohio for one year and then I got transferred to Cleveland, Ohio, but we didn't move the family because the boys were involved in sports and one of them was president of his class and stuff like that.

Jones: It's hard.

Warwick: I was travelling all over the place anyway and we maintained our home in Columbus and I commuted back and forth every week. And then I got transferred back to New Jersey after two years.

Jones: Did you like New Jersey? I guess you did. It became a home base.

Warwick: Oh, yeah, we like New Jersey. It became like home.

Jones: What part of New Jersey was it?

Warwick: We were in the north central part of New Jersey.

Jones: In what town?

Warwick: A town called--well we lived in Madison or Chatham Township and they were right adjacent to each other.

Jones: Right.

Warwick: All the time we were there. And then we went from that to Montgomery, Illinois and we were in Montgomery, Illinois for two years. I got transferred to Omaha and we weren't going to move to Omaha because we wanted to let--I got transferred in December until the kids finished school but we had gone out and bought a house and I was working out there. I had been out there about six months and I got a call one day and said, "Bill how are you liking it" and all this kind of--a lot of questions from one of the executive vice presidents. I said, "I like it fine" but I said, "John, you haven't talked to me since I've been out here. Why are you calling?" And he said, "Because we want you to come to New Jersey." And I said, "You got to be kidding?" And this was when interest rates were 15 to 17 percent.

Jones: So that must have been in what the early '80s, late '70s?

Warwick: It was in the early '80s.

Jones: Yeah.

Warwick: So I said this is one time that I'm not going to say yes automatically because my wife and I when we got married had made a deal that I was going to try to go as far in the company as I could and that we'd pay whatever that price was in order to do that in terms of relocations. But I said, "I'm not going to say yes now. I need to talk to my wife first."

Jones: Bill let me interrupt you here just a minute.

Warwick: Yeah.

Jones: All these moves did Western Electric, AT&T, whatever do they have a relocation company that would step in and help you out with all these moves?

Warwick: Oh, yes, yes.

Jones: Having worked for a large corporation in the Washington, D.C. area where there's multi moves I was very used to that and I know it was not the best way but at least it took a lot of--

Warwick: Oh, it was a lot of help and it took a lot of the pressure off.

Jones: Yeah, uh-huh.

Warwick: In terms of all of that stuff.

Jones: Right, mm-hmm.

Warwick: The real difficult part of it was on my wife Jackie more than me.

Jones: The physical moving and picking up--

Warwick: The physical part of it and all of that kind of thing but when we came back to New Jersey and this was a promotion to vice president and so when we came back to New Jersey we knew we'd be there for a long time, probably the rest of my career.

Jones: This was VP.

Warwick: I came back at VP of customer premise equipment.

Jones: Customer what?

Warwick: Customer premise.

Jones: Premise.

Warwick: That is like it included telephone sets, PBXs, all kinds of data equipment, all that kind of thing, equipment that we made that the public used.

Jones: Okay. And that was in New Jersey.

Warwick: Mm-hmm.

Jones: Now that was--when were you married?

Warwick: We got married in 1962. I married a Greensboro girl.

Jones: So that was an awful lot of--she's a good one.

Warwick: Oh, she's--

Jones: To put up with that I mean.

Warwick: She put up with a lot.

Jones: All I can think of is people like you.

Warwick: And she managed it.

Jones: Yeah.

Warwick: Like a pro.

Jones: She probably had it down pat after a while.

Warwick: And really never complained.

Jones: You didn't paint the walls did you?

Warwick: Well sometimes we actually built houses. We didn't live in them very long but we tried usually to find--

Jones: You must have as time went on learned what not to do and what to do if that's the case, what you look for and what suited you. And your kids went along with this and they probably turned out better than the average child.

Warwick: They did very well and I'm pleased with both of them and they adjusted. What they got out of it was the ability to make friends instantaneously and quickly and to adapt to a lot of different environments. And in the long term it stood them in good stead.

Jones: Sure.

Warwick: What they didn't have were lifelong friends, you know, from their childhood all the way through. They didn't because they moved. Now because we were in New Jersey so often they had New Jersey people that they knew and were close to and all of those things and that worked out fine because when we went away I mean I can tell you that we saw people in New Jersey one of these times when we had been gone for nine months and they didn't even know we'd been gone.

Jones: Well you know I can understand that. I mean just think about living anywhere.

Warwick: Sure that's right.

Jones: You run into somebody in the street and say, "Well how are you? Well so and so died and I've just had a nervous breakdown" et cetera, you know.

Warwick: Yeah. So it was an interesting lifestyle and life and so we stayed in New Jersey this time for 12 years. Then I was asked and AT&T in that time reorganized and I became a part of AT&T rather than Western Electric.

Jones: Okay I was going to ask you.

Warwick: Managed not just the manufacturing segment but a whole business that we called consumer products for AT&T.

Jones: Consumer products.

Warwick: And these were stand alone profit centers and so that was fun because it's like running your own business in its entirety and you're measuring on bottom line performance and all of that. And so in doing thAT&Then I was asked to take a different job after I was on that job for what three years, I was asked to take a different job as vice president of engineering for the whole corporation, AT&T.

Jones: Well that's not bad or is it? The buck stops there is that what it was?

Warwick: As a part of that job I was a staff person for the president of the company and in that role I was asked to lead a group of people to include the president of Bell Labs and several other people to evaluate a business unit that was in trouble and decide what we should do with it. So when we had finished evaluation the decision was we should keep the unit and fix it and then as often happens I got the job of fixing it, right, and so I started then and I was in that role for seven years and we did fix the business in that period of time. It was a business which was fundamentally devoted, 95 percent of sales were internal to other parts of AT&T.

Jones: Oh, okay.

Warwick: When I took it. In three years five percent of our sales were at AT&T and 95 percent was outside and the five percent of sales to AT&T was still a higher dollar value than it was before.

Jones: Let me ask you this.

Warwick: So we had grown the business because we could penetrate the outside market and were allowed to do that and in essence it became a profit center and was able to hold its own and pay its own way.

Jones: I would imagine. On the scale of large corporations worldwide actually as well as national, at this point in time that you're speaking of now, where did AT&T rank about?

Warwick: AT&T was in the top three or four or five in terms of revenue.

Jones: Right.

Warwick: Well I said that but I should say that was before the breakup. After the breakup of AT&T it was in the top ten in terms of revenue in those time frames.

Jones: Right.

Warwick: The business that I was running was about $2.2 billion in revenue.

Jones: At that time that was a lot of money.

Warwick: Yeah.

Jones: It still is but, yeah, okay that's interesting.

Warwick: And so in this job I had businesses, factories, manufacturing operations in Southeast Asia and in the previous job in the consumer products job I had taken the first, established the first manufacturing facility outside the Continental United States since the 1930s in AT&T.

Jones: And what year was that?

Warwick: That was in 1980.

Jones: And you took that overseas to China?

Warwick: We did that in Singapore.

Jones: Ah.

Warwick: All right and the reason for choosing Singapore was that Singapore spoke English. English was the native language. It just made it easier.

Jones: You know what I didn't know that.

Warwick: Yeah because it was a British colony you see for a long time.

Jones: That's true.

Warwick: Before it became independent and English was the language. Now the people makeup was largely Chinese in Singapore about 85 percent. Then there was an Indian population and an Indonesian population that lived in Singapore.

Jones: Now this was the first out of our overseas continental?

Warwick: Out of the Continental United States.

Jones: Okay, overseas and what did you call it the first, what did you head up?

Warwick: The first manufacturing facility.

Jones: Manufacturing facility.

Warwick: Yeah.

Jones: I just want to make sure I got that right.

Warwick: Outside, yeah.

Jones: Okay that's amazing. That is amazing. In 1980, what was going on in the world, a lot of things? We were, okay. What training did you have for doing business with--you went over there and lived there right?

Warwick: Not then.

Jones: Not then?

Warwick: Uh-uh, no. I still lived in the United States. I traveled to Asia a lot six to eight times a year.

Jones: So you were working with people from over there. Did you have training for how you did that? The customs are different everywhere you go.

Warwick: Sure. We were doing manufacturing there for sale back in the United States, all right, so it was for the most part okay and that was in Singapore it was a packaging facility, all right, integrated circuit packaging facility. And prior to that, all right, in the '80s, early '80s, we had opened a telephone set assembly factory in Singapore because we had to compete with all the rest of the world that were manufacturing telephone sets. The Bell operating companies didn't have to buy from us. They could buy anyplace they wanted to and telephone sets were because of the computer inquiry to decision which deregulated telephone sets. A customer could own his own telephone sets; prior to that they were all leased.

Jones: Right.

Warwick: And so we had to compete with the rest of the world. Well we could lower our costs significantly by doing it in Singapore.

Jones: By manufacturing and selling that way.

Warwick: Right and so we started there and the reason for going there the first time was because English was the common language and it made it easier to make that transition. We subsequently opened a telephone set manufacturing plant in Southern China and there the cost structure was even lower.

Jones: When was that in Southern China approximately?

Warwick: About in 1981.

Jones: Okay well it was just very close.

Warwick: Eighty-two, yeah, very close.

Jones: Okay and any particular--what area of Southern China?

Warwick: In Juango province, all right, and we had a partner in Hong Kong and that partner had grown up in a little village between Hong Kong and Guanjo which was the capital Juango province. So we went to his home village, 2,500 people lived there and the reason we went there is because in southern China you could have a lot more freedom about how you ran your business in total and the government wasn't such a strict partner.

Jones: Really?

Warwick: Uh-huh in southern China and so we had a lot more control and we were able to go and that's why we went there and this is interesting. In one year starting now in a communist country, in a rural village, we had to train everybody. Nobody had ever done any kind of manufacturing assembly work before.

Jones: No.

Warwick: In one year it had the best quality of any factory we had in the world.

Jones: Oh my gosh that's amazing.

Warwick: And it was because once you trained them they did everything exactly the same way every single time.

Jones: Amazing.

Warwick: And so we had a very good experience there.

Jones: Okay, I'm going to just make a notation to listen to you on that one. That is--I heard stories. I've heard a lot of stories. I was born in Shanghai.

Warwick: Uh huh.

Jones: But, of course, it was 110 years ago but we've had a lot of friends who stayed there for a while and so back and forth and I've heard a lot of stories about small villages and small towns and whatever and the people have their mindset and, of course, it does vary from region to region.

Warwick: Yes.

Jones: And I'm not at all surprised and yet I'm always amazed when I hear this sort of thing because in this country that would never happen.

Warwick: Yeah.

Jones: Not ever, ever happen but okay fine. So how many were in this village, 2,500?

Warwick: Twenty-five hundred people and a village with the 2,500 people didn't have enough people to supply our labor needs so people from surrounding villages came and so we built dormitories for them to live in during the week and we worked six days over there.

Jones: Now let me ask you this. This was Communist China.

Warwick: Uh-huh.

Jones: And you white devils went in and you took over this village and trained these people to manufacture something so that you could make money. When did the Chinese government or did they ever get wind of what was going on and how did they react to such a thing?

Warwick: Oh, well when we first went we had to meet with the ministry of industry in Beijing and get their approval, all right.

Jones: Uh-huh, okay.

Warwick: And this was an interesting kind of sideline. When we met with them and this was 1980 thereabouts, we met in this really dingy, dark office building and this is the vice minister of industry in those days and it's typical in meetings with the government in China everything is done through translators.

Jones: Even though they speak English?

Warwick: Even though they might speak English.

Jones: They might speak English.

Warwick: Yeah. So, you know, an hour long meeting takes two hours when you're going through translation but he told us in this meeting that it was strictly in accordance with the central government's philosophy. That night he hosted a dinner for us and at the restaurant the entire evening was in English.

Jones: That is the Chinese mindset.

Warwick: Yeah. The entire meeting was in English and he told us he said, "Now you can go. We'll give you permission to go anywhere you want to in China to set up your factory but my advice to you is go as far away from Beijing as you can because the closer you are to Beijing the more that we follow the rules and if you are in the south or over in Shanghai you can do what you want.

Jones: Really?

Warwick: You can own 100 percent. In Beijing it's a 50/50 proposition. The Chinese government owns 50. You own 50. You can own 100 percent. You can hire and fire workers as you please. You can run your own business the way you want to, but up here you can't. So that's what led us. Now the selection of this particular village is because that was the home village of our partner in Hong Kong and in the cultural revolution he was a young, very young man. When the Red Guard came to his village he and a whole lot of other people jumped in the Pearl River and swam to Hong Kong. This was about 15 miles away and thousands of them drowned.

Jones: Sure.

Warwick: But he made it. He got a job working as a laborer mixing concrete on road gangs. Hong Kong was growing and expanding and building a lot of roads in those days and he lived in a cardboard box on a hillside for three years.

Jones: Amazing.

Warwick: And then he had saved all his money, everything he could save he saved and he invested it in a garage and started making, hired an engineer and started making single-sided printed circuit boards for simple consumer electronics.

Jones: Amazing. And how did your people get in touch with him or learn about him, you people being AT&T?

Warwick: We went and talked to him. I mean we looked at a lot of different places. We went and talked to him. He had an operation that we thought was a very high quality operation in Hong Kong and that he would be a good partner. He had traveled to the United States. He didn't speak any real English, you know, just a tiny bit. He only had a grade school education but he was very smart.

Jones: Evidently.

Warwick: And he built a very substantial business. It was called Turnberry electronics in those days.

Jones: How old of a person was he when you contacted him?

Warwick: He was in his 40s.

Jones: That was comparably young so he was really driven.

Warwick: Yeah, he was driven and he had a good perspective on the evolution of technology.

Jones: Amazing. Had he had any schooling in that?

Warwick: No. All right that's how we went to his village. To meet the needs of the village we built a clinic. They didn't have a medical clinic of any kind and so we built a clinic and just donated it to them and that was to help the village and we built this housing so people would have a place to live when they came there from outside the village during the week. It was a good experience for the village. The village loved it. It became prosperous. Now that two and a half--2,500 people village, all right, in 1993 was a city of two and a half million.

Jones: Whoa. So that was from 1980 approximately.

Warwick: Yeah.

Jones: Nineteen-eighty to 1993, from 1993 okay, 2,500 to two and a half million, ah.

Warwick: And that just gave you an indication of the explosion of manufacturing in Southern China. Companies, a lot of Hong Kong companies moved their manufacturing operations into Juango province as China began this process of opening up. When Dongshau Ping [ph?] said, "It doesn't matter whether the cat is black or white as long as it catches mice" that freed China. That statement opened China up to private enterprise, to welcoming companies in to grow and what he was saying is it doesn't matter whether it's a private business or a public business as long as it works.

Jones: That worked.

Warwick: That worked and it changed see because the philosophy had been that it had to be state controlled. In China there was no such thing as private industry in China.

Jones: Right.

Warwick: In those early days. That one single statement changed China forever.

Jones: Before I ask you, I'm dying to ask you a question but before I do that did you live over there at any time in the Far East?

Warwick: Yes. We lived in--before I answer that let me say when I had both the consumer business and the integrated, microelectronics integrate circuit businesses, had a lot of business in Asia. The consumer business had business in China too, manufacturing businesses as well as in Singapore as I mentioned and so I traveled a lot to Asia in those days. But when I was in the microelectronics business I had no reason to go back to China because China wasn't ready for that.

Jones: At that time.

Warwick: Back then and so from a microelectronics point of view we were all over the rest of Asia but not China and so from '93 to '97 I did not--I'm sorry, I better back up in dates. I jumped ahead of myself. From '86 to '93, I didn't go to China at all. That's when I was running the microelectronics business and I had no need to go to China. I was in Asia a lot but not China. In '93, I was asked if I would go to live in China and head up AT&T's operations in China and I said no three times over a period of three or four months. I kept getting asked by one of the vice chairman and I said, "I've been to China. I know about China."

Jones: That's why they asked you.

Warwick: I like what I'm doing. I want to tell you one thing that's very different about it. There isn't anybody in AT&T that knows enough about my business to critique it or to tell me what to do and I don't get second guessed and I'm allowed to run it the way I want to. As long as I produce I'm allowed to have a free hand. Why would I ever want to give that up?

Jones: That makes sense to me.

Warwick: So finally I got called in by the chairman and he said, "Look, you know, Bill, you know more about Asia. You spent more time there than all of the officers in AT&T combined. This is an important issue for AT&T. We need to have an integrated presence in China and you're the person to do it." He said, "Here's what I want you to do. I want you to take Jackie and go to China and stay two weeks."

Jones: Uh-huh the old soft soap the wife.

Warwick: Yeah and when--what I want to know is can Jackie live there? And I said, "Well, what about me?" And he said, "We already know that it's negotiable where you're concerned."

Jones: No that's very smart thinking.

Warwick: You know and so we went and spent two weeks. Well I got to tell you that I couldn't believe it and I'd been in '86, of course, and many times from '84 to '86. In '93 I couldn't believe it was possible for a country to change that much in that short a period of time. When we were there in '86 the last time I was there, all right, and I had Jackie with me on that trip, you could drive in a car the full length of (inaudible) the main thoroughfare through Beijing and not see three automobiles, horse-drawn carts and all kinds of things and rickshaw type carts loaded to the gills and all of it and all of those kind and millions of bicycles, a few busses and a few trucks. That was it.

Jones: Yeah.

Warwick: In '93 it was cars everywhere and gone were the horse-drawn carts, all of that stuff. It was dramatic and the building that was going on there was amazing. So we spent two weeks and came back. Jackie said she could live there.

Jones: That would be living in?

Warwick: In Beijing.

Jones: In Beijing.

Warwick: And when we--and I will tell you why Jackie was interested. I mean she was interested when we traveled there. She was interested because, and you'll relate to this, her father when he graduated from North Carolina State in 1911 he took a job with a British American tobacco company in Shanghai China.

Jones: Oh, for Heaven's sakes.

Warwick: And he was there until 1918.

Jones: That was the Paris of the east.

Warwick: Yeah. He was there until 1918 and he loved it and so she heard about China all of her life when she was growing up.

Jones: So she had a chance too. It wasn't the same but still to go back, yeah.

Warwick: Yes that's right.

Jones: Amazing.

Warwick: So it was an interesting period. We loved living in China. We also had an apartment in Hong Kong and there was a reason for that is because I had Taiwan and Hong Kong and Hong Kong was still independent then, Hong Kong, Taiwan, and Mainland China. You couldn't go from Beijing to Taiwan. You had to go through Hong Kong, no direct flights, no way to get there.

Jones: Okay that's right there wouldn't be.

Warwick: And so we maintained an apartment both places the first two years we were in China. After two years China had liberalized some about travel to Taiwan and so we went. We could then get to Taiwan from Beijing and so we gave up our apartment in Hong Kong because living in Beijing was more exciting.

Jones: Beijing.

Warwick: Hong Kong is like an international city. Beijing was a real Chinese city but an exploding one.

Jones: Yeah. When was the last time you were there, Bill, in Beijing?

Warwick: Yeah, when I retired I stayed on as chairman of AT&T China until '97. I went back to China every year for four years. The first year I didn't even know I left. I was there so often. Then the second year I was down to like three times, four times, something like thAT&The second year, two times in the third year and one time in the fourth year.

Jones: Did your wife go with you each time?

Warwick: No. For wives in China--they don't have any participation of spouses in business affairs.

Jones: Right.

Warwick: And so what she did was shop, all right, and sightsee and take people around, show people around visitors but it was not something that--she wasn't involved.

Jones: Right, it was not a diplomatic type tying for a woman.

Warwick: That's right, no. And so we went to--she did those things. She had access to my car when I wasn't using it and driver so she could do those kinds of things. I traveled an awful lot in China.

Jones: Did she have freedom or did you have the freedom to go pretty much where you wanted to?

Warwick: Oh, yeah, yeah within China anywhere.

Jones: Within China, uh-huh.

Warwick: These are some of the difficulties of internationalization because I still had groups that I functioned as a part of back in the states, so in the first year I went back to the U.S. 18 times.

Jones: In the first year?

Warwick: The first year.

Jones: There's only 12 months in a year, goodness.

Warwick: Mm-hmm. Some days I would fly, again it's an all day trip.

Jones: How many watches did you--

Warwick: To New Jersey.

Jones: Yeah.

Warwick: From China because in those days you had to go from--you had to go down in a flight from Beijing, went down, the only corridor was down through Shanghai, not stop but you had to go down near Shanghai and then go up to Tokyo.

Jones: Mm-hmm.

Warwick: And then you could go across the ocean.

Jones: So how many hours would that take you?

Warwick: It would take 23 hours or so.

Jones: Yeah.

Warwick: And I'd go fly to New York and go to a meeting the next day and leave the next morning and fly back to China.

Jones: Well that's enough to drive you crazy.

Warwick: Well and here's what happened. As a result of all that I never had jetlag again.

Jones: Never?

Warwick: Ever. After that my body didn't know where it was and it didn't matter.

Jones: It didn't matter. So you could work at four o'clock in the morning on either continent and it didn't matter.

Warwick: Right and you see one reason we had to do that is you couldn't hold a telephone conference in China.

Jones: That's true absolutely true.

Warwick: We didn't have any capability. In the second after two years we did have the capability and we could hold telephone conferences. The only difference to that is you worked all day and then you had this meeting that lasted four, five hours, all right, but it was 12 hours difference in time.

Jones: Oh this was 18 trips to China the first year that you became chairman of AT&T China was this it?

Warwick: Mm-hmm, 18 trips to the U.S.

Jones: To the U.S.

Warwick: Yeah.

Jones: Okay, all right, oh my goodness sakes.

Warwick: And so it's a very--

Jones: You know people--I'm just listening to you and I'm thinking how many people would really understand that even today you can't hold really a good telephone conference because of the time differences and such.

Warwick: Yeah, time differences and all make it a big disadvantage.

Jones: Sure.

Warwick: Now sometimes when I come back I could combine several things and I might be in the states a week and Jackie came back here in the summer and stayed for three months in the summer anyway. We had a house in Wilmington up on Middle Sound and she would come there and stay. Her mother was there at that time.

Jones: Is she a Wilmington girl?

Warwick: No, she's from Greensboro.

Jones: That's right you did say that.

Warwick: Yeah and when I would come back to the states then I would always come down and spend the weekend with her before I went back.

Jones: Let me ask you this if you don't mind.

Warwick: Mm-hmm.

Jones: China today I mean you're the closest to an expert in business and international relations with China that I ever talked to and their fantastic economic growth in a way it's kind of scary. How do you take a look at this? Do you have any thoughts on what we can look forward to with them?

Warwick: Well I think we're going to see a lot of competition with China and it is a mistake to underestimate China.

Jones: Oh, yeah, I've heard that all my life.

Warwick: The people there are extraordinarily smart. They are very dedicated. They're dedicated to their own well being and improving their own lifestyle into it but China is producing enormous numbers of highly qualified engineers and scientists.

Jones: Yeah.

Warwick: And we have to understand and we largely don't understand. China doesn't raise politicians.

Jones: True.

Warwick: They don't grow them. We have people who make their career being a politician. That is not true in China. They're always something else first and like when I was there (inaudible) who was the chairman of the Communist Party, he's a physicist and his comment to me one time, and I had access to him three or four times a year because I was the highest ranking American businessman in China, and his comment to me was it's a whole lot easier being a physicist than it is running a government.

Jones: Bill, we've got about two minutes left and I wish we had much, much more time because this is absolutely fascinating. I want to ask you one question.

Warwick: Sure.

Jones: Does the United States have any reason to fear China?

Warwick: Oh I think from an economic competition point of view--yes.

Jones: Okay.

Warwick: But China's also both a supplier and a consumer and you have 1.3 billion people there whose lifestyle is improving day by day and they are going to be very significant consumers. We need to pay a lot of attention to China. I must, if we have time, tell you this one little vignette.

(crew talk)

Jones: Okay so we have about two minutes.

Warwick: Okay. China assigned when I was there a mentor to me. He was the former mayor of Shanghai. When I knew him first he was about 79 years old. He was the person who brought up (inaudible) and (inaudible) through the Chinese system once they got out of their individual practices and professions into government. He said to me one day, "Bill, why are you Americans so impatient with us Chinese?" And I asked him to explain that and he did and I'm just shortchanging this a little bit to get to the punch line.

Jones: I understand.

Warwick: He said, "Don't you realize that we know that a form of democracy is the best form of government?"

Jones: Form of it?

Warwick: A form of it, "But you have to understand we have 1.3 billion people. We have a 5,000 year history. We have never had a democracy. There is no infrastructure in China to support a democracy."

Jones: Interesting.

Warwick: "We've got to start slowly because we have to move step by step through this process. It's going to take 50 years." And I said, "That's the challenge for America. Mr. Mayor, the reason for that is because we live in a land of 30 second sound bytes and our politicians only care about what is happening in this particular term that they're in office."

Jones: We're seeing that now. Bill, we're going to have to stop. I wish we didn't but I thank you so much. This is absolutely fascinating. You need to speak on camera or to the university students and the school of business. Have you done that?

Warwick: I have done that.

Jones: Okay, then I have nothing new to say. Thank you so much.

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