Seeks to Boost GM : Ross Perot--A Fighter All His Life

The gospel according to H. Ross Perot: “Money is the most overrated thing in the world.”

Verse Two: “To get things done, you’re just going to have to slug it out and take all the turbulence that goes with it.”

Perot truly believes those words. He lives by them. He knows he is right. But then, Henry Ross Perot almost always knows he is right.

As for money, he is a billionaire and then some, the richest man in Texas, the second richest in the United States, the largest shareholder in General Motors Corp., the builder of his own sprawling computer empire. But he still buys his suits off the rack and eats, most days, with his employees in the company cafeteria.

Taking the Heat

And, as for slugging it out, he has been fighting all his life, taking the heat, wearing down anyone who gets in his way, pursuing his goals with what one close colleague calls his “railroad track mentality.” And since he set the business world on its ear by hooking up with General Motors in 1984 and becoming a director, his latest cause is to take on the Japanese auto industry.

No Marquess of Queensberry rules either. A good brawl is more like it, a blood-on-the-floor kind of rumble in which the last one standing is the winner. When the dust has settled, he wants to see the United States exporting cars to Japan.

“Most people don’t have the stomach for the fight,” Perot said. “If you don’t have the stomach to develop a plan, develop a strategy, take the hits and win the fight, I say you’re just kind of a morning glory. You’re going to wilt by noon.”

Get Back to Basics

Perot, now 56 and ever the corporate guerrilla, must first work to help put the General Motors behemoth into motion, shake out the cobwebs, get back to basics, build a car that can compete.

“They’re just beating us on blocking and tackling,” Perot said of the Japanese. “That’s how they’re beating us. Back to basics. It’s that simple.”

And just to make his point, Perot bought a Norman Rockwell painting, one depicting a returning World War II hero holding a Japanese flag while recounting his exploits to a rapt audience of garage mechanics. He hung it in his outer office.

“That’s to remind every big shot from General Motors who walks through the door that we used to whip up on those guys right regularly and if we ever decide to do it again, we can,” Perot said in his twangy East Texas drawl. “We will tear their heads off if we ever team up.”

When H. Ross Perot starts talking tough like that, people listen. He grew up with tough people. One of his early childhood heroes was a rodeo cowboy who lost three fingers competing in the world’s calf roping championship, but still won.

“Now that’s my definition of tough,” said Perot, leaning forward in his office rocking chair.

So much for the gritty side of H. Ross Perot, who sold his Electronic Data Systems--founded in 1962 with a $1,000 check--to General Motors for $2.5 billion and a seat on the GM board of directors.

There is another side. Down at the Dixie House restaurant later in the day, Perot was having a plate of vegetables and an iced tea for lunch when a waiter asked for an autograph. Perot responded with a sweeping signature, pausing for a moment to ask the waiter for his name and a little of his personal history. He said later that that kind of thing happens all the time, in shopping malls and on the street, because he is not the sort to hide behind a wall of security.

“My life today is like it was in Texarkana,” Perot said, referring to the small East Texas city where he spent his childhood. “I may not know everyone, but they know me, and it’s great to talk to them.”

Less Combative Image

Perot’s less combative image shows him wandering into General Motors car dealerships, dressed shabbily, just to see how the average guy is treated. Or donating $10 million for a Dallas concert hall, with the stipulation that it be named not for him, but for his longtime associate, EDS Vice Chairman Mort Meyerson. He has flown in the best medical help available when his employees or their children needed it. In 1976, he gave $50,000 to financially troubled New York City to buy new horses and saddles for the mounted police.

But those are minor, though telling, stories about Perot.

The big-ticket items are the ones that give Perot’s 5-foot 7-inch stature a larger-than-life image, that make him overshadow America’s richest man, Wal-Mart stores founder Sam M. Walton.

In 1969, the crew-cut Perot chartered two jets and tried to deliver 26 tons of food and Christmas packages to American prisoners of war in North Vietnam. Hanoi rebuffed him, but Perot believes the effort marked the beginning of better treatment for American prisoners.

Parade for Former POWs

In 1973, he wrote the check for a parade in San Francisco for former prisoners of war, staging the event at a time when anti-Vietnam fervor was at its height and returning war veterans were shunned.

Six years later, he organized a commando unit that rescued two of his employees from a Tehran prison in the opening stages of the Iranian revolution. The story of Perot’s rescue effort was the subject of a best-selling book, “On Wings of Eagles,” by Ken Follett. A movie version will be shown on television later this month, with Richard Crenna playing Perot.

In 1980, at the request of then-Texas Gov. Bill Clements, a Republican, Perot became the chairman of a task force on drug abuse, which culminated in the passage of much stricter penalties for drug use in Texas.

In 1983, at the request of current Gov. Mark White, a Democrat, Perot spearheaded a successful drive for education reform in Texas. The sweeping and controversial measures, signed into law after a year and a half of effort, included a “no-pass, no-play” clause, which stated that students who do not pass their course work cannot participate in extracurricular activities, making Perot’s name particularly loathsome in high school locker rooms around the state. Perot counts the reforms as among his crowning achievements.

Donated Magna Charta

In 1984, Perot purchased a copy of the Magna Charta for $1.5 million and donated it to the National Archives.

Last January, he bought a rare collection of 1,100 books, including works of Shakespeare, Chaucer and Milton, for $15 million and donated it to the University of Texas.

And he has made an offer of $70 million for the Museum of the American Indian, which he wants to move from New York City to Dallas.

All that, and Perot has allowed only one thing to be named after him--the Boy Scout building in his native Texarkana. Perot was, of course, an Eagle Scout.

Not that he isn’t being noticed. Last February, Britain’s Prince Charles flew to Dallas to present him the Winston Churchill Foundation leadership award, which has been presented only twice before, to American statesman Averell Harriman and British Prime Minister Margaret Thatcher.

Dreamed of Being a Pearl

In his acceptance speech, Perot said he once dreamed of being the pearl of an oyster. But then it began to dawn on him that it was not his role in life. Rather, he was the grain of sand that irritates the oyster to produce the pearl.

And that is what he has always been, the irritant. Those who know him well say his demeanor has not been altered, except perhaps for a bit of polish that they attribute to his wife, Margot.

“With Ross, for the better part of the time, what you see is what you get,” said Meyerson, who has been with Electronic Data Systems for the last 20 years. “He just does what he does.”

Robert S. Strauss, the former chairman of the Democratic National Committee, has known Perot for more than 15 years.

“Ross Perot is one of the most interesting men I’ve ever met,” he said. “I’ve seen him around Presidents and the average guy on the street. He is no different in either place.”

Strauss added: “He’s a fellow who gives a damn. You haven’t heard the last of Ross Perot. I think you’ve only heard the first of Ross Perot.”

Also Has Detractors

But Perot also has his detractors, including competitors from the past who have found themselves blinking in surprise as he wrestled away lucrative contracts. Chief among Perot’s critics these days is the Texas High School Coaches Assn., which saw 15% of the state’s varsity athletes sidelined this year because of the no-pass, no-play rule.

“Well, he’s not real popular with the coaches’ association,” said Eddie Joseph, the executive director, in a considerable understatement. “We’re not real convinced he knew what was great for education in the state of Texas. He used his power, influence and money to ram this thing down people’s throats. He used to be my idol, but I’ve changed my mind a little bit.”

Another critic is Jim Butler, executive director of the Texas State Teachers’ Assn., a 97,000-member organization that opposed some aspects of the education reforms. He complained that although teachers supported reform in general, Perot’s commission did not give them enough say in the final changes.

“Once he makes up his mind, there’s not much chance of changing it,” Butler said. “He’s set in his ways.”

Perot is not bothered by those views, or by the campaign to defeat his efforts. “My father’s friends were four times as tough as the toughest guy you run into today,” he said. “You don’t see tough like that anymore, so I’m not overwhelmed by these guys.”

Appearance Little Changed

Perot’s appearance has changed little over the years. The military crew cut he wore in the ‘60s and ‘70s has been replaced by a hair style just long enough to comb, but the rest is vintage--dark pinstriped suit, gray patterned silk tie, white shirt with collar pin and gold cuff links, black wing-tip shoes and Annapolis ring, class of ’53.

His office is on the seventh floor of EDS headquarters, overlooking greenery that was once a golf course.

On one wall of the outer office, another Rockwell painting, this one of a sleeping sailor lying in a hammock under a tree, hangs beside a haunting oil portrait of a Vietnam prisoner of war. On another wall is a wooden carving of an eagle bearing Perot’s favorite motto, “Eagles don’t flock,” in its talons. The Churchill award is enclosed in a Plexiglas display case, and at the door of Perot’s office is another plaque, “Every good and excellent thing stands moment by moment on the razor’s edge of danger and must be fought for.”

The list of Americana in the room goes on: a bust of Theodore Roosevelt, photos of man’s first landing on the moon, Western bronzes, a set of McGuffey’s Readers--all very much the stuff of a superpatriot who owns the flag that flew over the nation’s Capitol on the day of the moon landing.

Daunting Inner Sanctum

And if the outer office is impressive, the inner sanctum is daunting: A Gilbert Stuart painting of Washington, the only one in a private collection; the original “Spirit of ‘76” painting by Archibald M. Willard (from which the stamps were printed); a Frederic Remington bronze; mementos of the Tehran rescue; family pictures everywhere, including one of Ross Jr., taken immediately after he set the world’s speed record for circling the globe in a helicopter. But there are no pictures of Perot himself, only the family--Margot, Ross Jr. and the Perots’ four daughters. There are none of him in the entire EDS complex, or at home either.

“I don’t want EDS to be personality-driven,” Perot said. “We’ve always felt we didn’t want to start a personality cult. It’s not good for business.”

But of course Perot, the jug-eared man who broke horses when he was 7, is something of a cult. He explains the present with the past, telling stories as if they were parables, and telling them as if he were sitting in a rocking chair on the front porch back home in Texarkana rather than in an urban corporate office.

Parable of Parents

The first parable is about his parents, Lulu May and Gabriel, who raised Perot in a small house just outside Texarkana. His father was a cotton broker and horse trader and the first source of Perot’s understanding of how to do business. Perot drifted into the story of his parents, one he has told many times before, and he began with how his father cared for the blacks who worked for him.

“What made more of an impact on me as a child was that every Sunday he and I would spend most of the afternoon going around to visit the people who were too old to work anymore, to make sure they were all right. Now that goes beyond sending them a check.

“When we would go to the county fair each year, he would take the blacks that worked for him with our family. He would give each of them his calling card because in many cases people would treat them rudely or embarrass them or whatever. And he would say, ‘Now if there is ever a problem, just show them the card,’ because everybody knew my dad.”

Hobos at the Door

Perot remembers that hobos were constantly knocking on their back door during the Depression to ask for a handout. Finally, a man explained that they came to the door because a mark on the curb designated the Perot household as a soft touch. Perot said he asked his mother if she wanted him to wipe it off.

“She said to leave it there, that these people are just like us and the only difference is they are down on their luck. Now just think what that said to a little boy. That’s better than a three-hour sermon on charity,” Perot said.

The second parable is of the paper route. During the Depression, grown men delivered newspapers and the only place papers were not distributed in Texarkana was the city’s shantytown area, on the assumption that people there could not read. So a 12-year-old Perot proposed to deliver the newspaper there, but with a catch--he would give the newspaper only a fraction of a route’s normal profits. As has almost always been the case with Perot, his paper route was a success--too successful, in fact--and the distributors told him they were calling off the original deal. Perot marched into the office of C. E. Palmer, the paper’s publisher.

‘I Made a Deal’

“I said, ‘I made a deal with your paper and here it is. I’ve kept up my end of the deal and your paper’s reneged. I just want to know if your paper is going to keep its commitments.’ ”

Needless to say, Perot kept the paper route and the money.

“But think of the business lesson there,” Perot said. “Go to the man who can say yes or no.”

Perot is a great believer in luck, and he’s had his share. He was accepted at the Naval Academy but only years later learned that former U.S. Sen. W. Lee (Pappy) O’Daniel issued the appointment without even hearing his name. The retiring O’Daniel was shutting down his office when an aide walked in and told him he still had to fill a vacancy at the academy. O’Daniel asked if anybody wanted it and the aide said there was a boy from Texarkana who had been trying to get in for several years.

“Well, give it to him,” O’Daniel said.

Perot, who was twice president of his class at Annapolis, was graduated and sent to sea. He was the fire control officer on board the aircraft carrier Leyte when VIP executives from IBM came on board. At the end of their visit, they offered Perot a job as a salesman.

‘You Bet I’m Interested’

“I said, ‘Mister, I’ve been working since I was 7 years old and I’ve always had to look for work. You bet I’m interested. But I’m going to be completely honest with you. I don’t know what y’all do but make typewriters.’ ”

And so, Ross Perot entered the world of computers, only to find IBM too slow, too ponderous, for his taste. He would reach his sales quotas months early and ask for more work, only to be told he was making more money than executives several rungs above him. He requested, and received, an 80% reduction on his commissions so he could keep working. (“I guess they figured if I was dumb enough to ask for it, we’ll give it to him.”)

All the while, the idea of servicing computer software was rummaging around, but the Perot brainchild sparked no interest at IBM, which concentrated on hardware. After five years at IBM, Perot was bored and frustrated.

‘Quiet Desperation’

“I was just sitting around not knowing what to do, wishing I had something to do and I was in a barber shop reading an old Reader’s Digest and it had these little one-liners at the bottom of the page. Thoreau: ‘The mass of men lead lives of quiet desperation.’ I said: ‘There I am.’ So that’s when I decided to start EDS. I didn’t know whether it would work or not, but I just had to try.”

It did work. Perot started in 1962 with a small band of salesmen, dressed uniformly in dark suits and white shirts (he said all they had to offer was a well-scrubbed look), who scoured the business world, trying to persuade companies to let EDS design their computer programs.

They became computer commandos for the budding corporate guerrilla warrior. Tom Marquez, Perot’s first hire, remembers workdays that went well into the night, six days a week. Finally, they struck pay dirt with a contract from Frito-Lay, despite IBM’s intense efforts to discredit the new company, and Perot was off on the fast track. He never looked back.

In 1965, with the establishment of Medicare, the data-processing business burgeoned and Perot began to win state Medicaid contracts to administer programs. As the business grew, Perot concentrated on hiring former military personnel, adding to the image that EDS marches in a lock step, one that lingers even now.

Ever since that first breakthrough, Perot has been riding high, although he has had his very expensive setbacks over the years. He did drop $450 million on paper in a single day of frenzied stock market trading in 1970. He also lost more than $60 million in 1974, trying to prop up two ailing Wall Street firms that ultimately failed.

Perot’s task with EDS now is to help streamline General Motors’ disjointed computer system. When GM bought EDS, the automotive giant had more than 100 data centers and 100 data communications networks. The plan is to reduce all of that to 18 centers and one network--the first step, Perot believes, in being competitive with the Japanese.

But even he admits that the progress has been slow and that there were initial problems with disgruntled GM data processors transferred to EDS who did not care for the military image of Perot’s empire. About 10,000 were asked to switch, and 800 or so bowed out rather than join EDS. Perot takes all this in stride.

‘A March Across the Snow’

“It’s like everything else, a long march across the snow to get it done,” said Perot.

Perot said that “nothing, nothing, nothing” would prompt him to run for public office, that it is much easier to get his projects done using his own money and not having to answer to a constituency. And besides, he doesn’t think that he would hold up well over time, that his abrasive ways would wear thin. As his mother used to say, a little of Ross Perot goes a long way.

The education reform is a prime example of what Perot means when he says it is easier to get things done outside politics. After Gov. White asked him to take over that crusade, Perot spent $2 million of his own money, talked to teachers himself, hired the best lobbyists, exerted political pressure and got the legislation passed over stiff opposition. In effect, he did what his critics the coaches said he did, but is proud of it.

He said he was recently sitting in a room with the “who’s who of the American business community” when the talk turned to education and the difficulty of initiating reforms. Perot told them they were wrong, that if it took a year and a half and $2 million in Texas, the educational system in all 50 states could be reformed for $100 million.

Taking the Heat

“That’s nothing,” said Perot. “But you’ve got to be willing to take the heat necessary to get change made in a free society.”

Verse Two again.

Perot denies that he and his company are militaristic, although that image clings to them.

“I am about as unmilitary as anybody you can find in terms of being informal,” he said. “If we hadn’t had a sense of humor when I was growing up, we wouldn’t have made it.”

And he also insists that his son and four daughters will have to earn their way in the world, that they will have to learn, as he has, how to fend for themselves. He said he and his wife, Margot, have worked hard to teach them that money is not the ultimate end.

“When I came into Dallas, everything I owned was in the trunk of the car and I feel personally that I have always been rich in the things that count,” Perot said. “I’ve had wonderful parents and I have a magnificent wife. I have great children. That’s real wealth. Young people who make money their god are inevitably in for a big disappointment.”

Verse One again.

Perot doesn’t know what’s next on the list for him. He has no way of telling and doesn’t think about it. Everything that has happened to him in the past, from the Tehran rescue to the GM deal, began with a phone call.

“If history repeats itself then something else will come along,” he said. “I guess if someone said you had to title your life, it would be, ‘It All Starts With a Telephone Call.’ I’m just sitting here doing business when someone calls and says: ‘Hey, we gotta do this!’ ”