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New boss puts focus on service

Published August 14, 2007 at midnight

In 1999, SBC acquired Midwestern telco Ameritech to create the nation's biggest local phone company.

The problems began soon after. A change in the company's pension plan led to an unexpected rash of retirements, creating a service meltdown that left subscribers waiting months to have phones repaired or installed.

Facing irate customers and the threat of stiff regulatory fines from five states, SBC Chairman Edward Whitacre appointed Edward Mueller to fix the problems. Within months, Mueller was widely credited with doing just that by hiring more technicians and improving employee moral.

By the time Mueller retired in 2002, formerly harsh Ameritech critics were sorry to see him go.

"I'm disappointed to see Ed leave the company," Illinois Commerce Commission member Terry Harvill said at the time. "He did an admirable job confronting the problems that arose at Ameritech."

Mueller's focus on customer service is a large part of the reason that Qwest picked the St. Louis native as its CEO. In a meeting with employees Monday afternoon, Mueller talked at length about customer service, listing the companies he believes have distinguished themselves in that area, such as Southwest Airlines, Nordstrom and his former company, Williams-Sonoma.

Mueller also told workers that the Denver Broncos are now his "second favorite" football team, after the Green Bay Packers. The St. Louis native also disclosed that he's a Cardinals fan.

Mueller, 60, started his career at SBC in 1968 after graduating from the University of Missouri with a civil engineering degree. He held posts ranging from head of the telco's California operations and international operations before retiring in 2002.

His retirement didn't last long. Within a year, Mueller became head of specialty retailer Williams-Sonoma and its portfolio, which includes Pottery Barn and Hold Everything. In explaining why he took the job outside his telecom expertise, Mueller in 2003 told the San Francisco Chronicle: "I'm not a merchant, but I think I have OK taste. I mean, I buy a lot - I'm a hell of a consumer."

At Williams-Sonoma, Mueller oversaw the rollout of Williams-Sonoma Home stores and Pottery Barn Bed & Bath shops. He also fixed Pottery Barn's inventory system so customers were no longer leaving stores empty-handed because items weren't in stock.

Mueller abruptly retired from Williams-Sonoma in July 2006, although he remained as a director. Analysts said his term was largely successful, marred only when the company said first- quarter 2006 sales fell 12 percent on markdowns at the Hold Everything chain.

"I'm dubious based on the trouble during the last three months of his tenure at Williams-Sonoma," said Pat Comack, an analyst with Zachary Investment Research. But former Qwest CEO Dick Notebart's "word counts for a lot, and the fact he says Mueller is his No. 1 pick carries a lot of weight."

Mueller is on the boards of Clorox, GSC Acquisition Co. and VeriSign, where he presides over the audit committee, which is overseeing the company's stock- option backdating inquiry.

Former US West /Qwest CEOs

1990-1998: Dick McCormick - U S West

Credited with leading the company during a period of rapid expansion from a domestic telephone company into an international telecommunications and cable television company. Former president of International Chamber of Commerce.

1998-2000: Sol Trujillo - U S West

Presided over the company's takeover by Qwest Communications, but decided not to stay on after the companies completed the merger. Current CEO of Telstra, a communications giant in Australia.

2000-2002: Joe Nacchio - Qwest

Oversaw acquisition of U S West and construction of international fiber-optic networks. But some questionable deals helped bring the telco to the verge of bankruptcy. Nacchio is awaiting assignment to a federal prison after his conviction on insider trading charges. He is appealing the conviction and six-year prison sentence.

2002-2007: Dick Notebaert

Brought the company back from the brink of bankruptcy and restored the company's credibility. Chairman of board of trustees of Notre Dame University.

Staff writer James Paton contributed to this report.

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