Perot to Study Overhaul of Postal System : Former Associates at EDS Corp. Join Texas Billionaire’s New Firm
H. Ross Perot, the Texas billionaire who revolutionized the nation’s computer services industry and tried to revolutionize General Motors Corp., announced Thursday that he had formed a new company that initially would help the U.S. Postal Service streamline its operations.
Perot, with the help of former associates from Electronic Data Systems Corp., the computer-services company he founded in 1962, will undertake an extensive study of the Postal Service, a semi-independent corporation that spends $38 billion a year and is now running $177 million in the red. Some sources say the action is a precursor to what will be a top-to-bottom overhaul of the U.S. mail delivery system.
The review, to be conducted by Perot Systems Corp., a newly formed Dallas holding company, also will include an in-depth analysis of the Postal Service’s often stormy labor-management relations.
Postmaster General Anthony M. Frank said the contract, which will take effect Monday, should allow the Postal Service to benefit from the vast experience Perot and other members of his company gained working in the private sector.
“If we are successful,” Frank said, “we will be able to capture efficiencies and control costs that might otherwise elude us.”
For Perot, the development marks a bittersweet irony. He sold EDS to General Motors in 1984 in hopes that his company would help the stumbling auto giant “make the best cars in the world.” But after repeated clashes with GM Chairman Roger B. Smith, Perot was kicked off GM’s board in 1986 and paid $700 million for his GM stock.
Under the termination agreement, Perot was forbidden from recruiting top EDS officials until Wednesday.
And Wednesday, without a direct invitation from Perot, eight top managers in EDS’ government-services group resigned their jobs and joined Perot in his new quest to revitalize the Postal Service.
In announcing the new firm, Perot dismissed suggestions that he would be able to compete successfully against the GM subsidiary. “EDS is so big and we are so small, they won’t hardly know we are here,” he said.
The Postal Service study will not be just another blue-ribbon effort, according to sources familiar with the planned study.
Perot’s people will circulate throughout the Postal Service--visiting and advising in post offices around the country. They will talk to postal officials and workers represented by postal unions. They will interview customers ranging from individual letter writers to bulk mailers.
In the end, what they hope to come up with is a prescription for change--an optimum mix of automation and positive labor relations that will help the Postal Service move ahead of its top private competitors.
Part of the study was initiated Wednesday night in Potomac, Md., where Perot met with all of the Postal Service’s top managers and union representatives to discuss his plans.
Several union officials attending the invitation-only reception and dinner at the William F. Bolger Management Academy gave Perot a preliminary vote of confidence before the event. “If Perot can do anything that will improve the Postal Service’s ability to serve America, he’s welcome aboard,” said Vince Sombrotto, president of the National Assn. of Letter Carriers.
Until Dec. 1, 1989, the study and consulting work will be done at cost. After that date, Perot’s role is less certain. For example, neither Perot nor Frank would say whether the new firm will actually perform data processing services for the government-run corporation at some point.
No Grudges Against GM
Perot is no stranger to government work. Under his tutelage, EDS held hundreds of millions of dollars of Defense, Health and Human Services, and other government-agency contracts. EDS, now a $4.4-billion company under GM, has continued to win government contracts, as well as private-industry bids for domestic and overseas work.
In a wide-ranging interview last week, Perot insisted that he holds no grudges against GM and said he has no interest in doing anything to hurt EDS’ fortunes. “EDS will continue to do well without me,” he said.
But, without being specific, Perot said he still had a need “to put together an organization” that would “only work on big jobs, huge jobs, jobs that could really make a difference.”
To run such an organization, Perot said he would need “the best and brightest people I’ve run into in my whole business career.”
That kind “would play to my strengths,” said Perot, who has been spending his time since GM overseeing his gas and oil operations (now up for sale), his real estate and other businesses.
“I think that one thing that I might be able to bring to bear at this stage of my life is a very keen since of the balance of human ingenuity and advanced technology,” Perot said. “When we fit the two together, we can avoid the enormous wastes I’ve seen occur by relying too much on technology to the exclusion of people.”
Tap the Potential
The Postal Service, which has experienced many difficulties in integrating people and machines, would be an ideal test of Perot’s skills, according to several Perot associates.
Said Perot: “I’d just like to let people see that you can take something that’s not working, and you can fix it and make it work, and all you’d have to do is tap the full potential of the people involved.”
Perot’s job should be easier under Frank, who has made it his mandate to overhaul the nation’s mail system.
Like Perot, Frank believes in finding out first-hand exactly what the people do who work for him. Last month, he spent the day as a letter carrier, reminiscent of Perot’s frequent visits to GM dealerships and longstanding policy to investigate customer and worker complaints himself.
Perot’s Mission
Postmaster General Anthony M. Frank will pay Perot Systems Corp. $500,000 to come up with cost-cutting ideas in:
Transportation, including the agency’s internal network and outside private contractors.
Telecommunications, including all internal voice, data and facsimile operations.
Delivery services, including operations and field management.
Revenue protection.
Mail transportation equipment, including purchasing, use, deployment and maintenance practices.
