Texas billionaire H. Ross Perot, upset that General Motors was treating its executives better than its workers, was planning to vote against year-end bonuses for GM officers before he was ousted from GM's board of directors, Perot said Monday.
"They knew I was going to vote against it," Perot said at a press conference here. That was one of the "stress points" that he said led to his abrupt ouster last week from the GM board and from his job as chairman of Electronic Data Systems.
"For some reason, my single dissenting vote (on the board), and the fact that 22 or so other guys were voting for it and I was voting against it, created an unacceptable trauma which I'll never understand." But he still warned that GM will hurt its labor relations if it pays the bonuses.
"At Valley Forge, when our troops were literally fighting barefoot in the snow, if George Washington had been out buying new uniforms and gold braid, it would have been a little hard to motivate the troops. Right?" Perot commented. "You should take care of the guys who do the work and then the guys that run the place. You can't look the troops in the eye and say it has been a bad year, we can't do anything for you, but then say, 'By the way, we are going to pay ourselves a million-dollar bonus over here.' "
Perot's press conference came before a long-scheduled luncheon speech to the Economic Club of Detroit, where a record crowd of over 7,000 gathered to see him introduced by the man who ousted him last week, GM Chairman Roger B. Smith.
It seemed that everyone in town wanted to see whether Perot would publicly criticize GM in front of Smith. After all, it had been Perot's public lampooning of the slow pace of change inside GM, and of its lavish treatment of its executives, which had sparked his rift with Smith in the first place.
But in the end, his speech was relatively tame. Perot, who founded EDS and sold it to GM two years ago, talked at length about how American executives should stop complaining about unfair foreign competition and lazy production workers and stop lavishing perks on themselves. But he never blasted GM by name.
And, in his introduction of Perot at the luncheon, Smith referred only in passing to the fact that "Ross and I may not always see eye to eye on how to get things done," at GM. But he added that "we do agree on what needs to be done." The two sat next to each other at the head table and chatted amiably among themselves. Smith said he had even met Perot at the airport Monday morning.
"We're on speaking terms, sure," said Perot as the two ate lunch. "This is not a personality issue."
'Always Have Fun'
The personal rift between the two men is "only in the press," added Smith.
Perot said that the two men "always have fun talking about our children."
But Perot, who under his buyout agreement is liable to pay up to $7.5 million in fines for publicly criticizing GM, still got in his licks at his press conference.
"We spent nearly $40 billion over the last few years and lost market share," Perot said. "During that time we've gone from the low-cost producer to the high-cost producer. Now, I'm just saying we've been doing something here that's not producing an end result."
"Here is my frustration," he added. "We're the biggest, we've got the greatest dealer network in the world. We've got more human resources than anyone in the world. We're spending $3.6 billion a year on (research and development). Gosh, we ought to have a car that can ice skate.
"We've got more of everything than anybody. But when you look at the results, we've got Chrysler, a fourth our size, who is the low-cost producer. There's something wrong. We just closed 11 plants, laid off 30,000 people, and we just threw $700 million at a guy that didn't want it."
Perot said the idea of a buyout originated in a letter he wrote to GM's top officers in June, listing four options for resolving their worsening rift. The first option, he said, was to "work together to build GM." The fourth was for GM to buy out his stake in the company, but he insists his letter advised against that.
But to Perot's surprise, that was the option GM accepted. "It never occurred to me they would do it," Perot said.
"Then GM came to me three weeks ago and brought it up again, and so I told my lawyer, if they want to talk, get it in writing. I never thought it would get in writing. Then, when it got in writing, I thought it would never get to the board. Then, when it got to the board, I said, I want it on public record for several days before it is approved, so the shareholders know about it. I wanted a public record. But they said, no, you've got to sign it immediately, and you cannot attend the December board meeting.
"So I was left with one choice," Perot added. "I had to let it happen, and I put the money in escrow to let the stockholders see the agreement, and to give the company an opportunity to rescind it."