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Perot and con; what America's most famous billionaire could learn from a South Texas rabbi.


When I first met Ross Perot, he was pacing about his office, lamenting his personal role in the incineration of Yellowstone National Park.

It seemed the Texas billionaire had a friend who, shortly after the mammoth fire started, had tipped him to the fallacy of the National Park Service's "letburn" policy. Because he had failed to alert the nation, Perot reasoned, he had to shoulder the blame for the immolation of the park. "I'm better than that," Perot declared, slamming a bony fist on his antique desk. "I could've raised enough hell that they would've had to put the fire out."

At first glance, it seemed ... well, a little kooky. How many corporate executives regard fighting forest fires as their personal burden?

Therein lies the magic--and mystery--of H. Ross Perot.

No other private citizen has embraced so many monumental public missions: freeing POWs in Vietnam; waging war on drugs; salvaging public education; reversing the decline of industrial America. Perot's immense wealth (about $3 billion), blunt talk, and daring exploits (most notably, organizing a private commando team to free two employees held hostage in Iran) have combined to make him America's most intriguing--and most publicized--businessman.

Yet, partly due to his genius at crafting his own image, Perot remains poorly understood. What motivates such a man? Is he a right-wing nut or a populist visionary? Why aren't there more like him?

With Perot as the central character, even a corporate merger assumes the dimensions of a public saga, grand enough to inspire two separate additions to the library of business literature. Doron Levin's book (*1) focuses on the deal itself, the ill-fated 1984 marriage of General Motors and Perot's Dallas-based Electronic Data Systems (EDS). Todd Mason, a former reporter for BusinessWeek, reaches more broadly, with what is conspicuously subtitled "an unauthorized biography" (*2) (translation: "Perot wouldn't talk to me").

Levin, who covered Perot for The Wall Street Journal and is now Detroit bureau chief for The New York Times, hews closely to the natural narrative of the "deal-book" genre. The story is cleanly written and well reported, filled with backstage detail. It illustrates how the greed of investment bankers--rather than good business sense--drove so many of the mega-deals that dominated Wall Street in the go-go eighties. It was a Salomon Brothers partner, for example, who first pitched the idea of GM buying EDS. In these pages, the feud that erupted between GM's Roger Smith and Perot, as well as those who worked for them, unfolds as the inevitable product of an ill-conceived union of disparate corporate cultures.

Data games

Levin, however, does little to explain the riddle of Ross Perot. A biographical secion mostly retraces the familiar turns of the Texan's legend: his Norman Rockwell-esque childhood (small-town boy who loved his mother, Eagle Scout, Naval Academy); his frustrations as an IBM salesman (in one year he earned the maximum annual commission by January 19); and his decision (while sitting in a barbershop, after reading a passage from Thoreau) to start EDS, the computer services company that made him a billionaire.

When the story moves to Perot's later years at EDS, we catch the first hints of his darker side, with a brief account of his vicious "scorched earth" campaign to discredit a competitor who had outbid EDS for a $2 billion Texas data-processing contract. (After much mudslinging and political arm-twisting. EDS regained the contract.)

By the end of this book, Perot emerges as flawed--manipulative, insensitive, and arrogant. His selfish motives for agreeing to sell his company--money, power, and attention--are noted. But they are treated ultimately as secondary considerations. LEvin doesn't question Perot's public assertions that he entered into the marriage with GM as yet another philanthropic mission: to save America's largest automaker. Perot is the clear hero in this tale, portrayed (as on the cover of the hardback edition) as a David bedeviling Goliath.

As Perot skillfully embraced that role, the business press delighted in his every pronouncement. After all, much of what he had to say about GM's management--its bureaucratic mentality ("revitalizing General Motors is like teaching an elephant to tap dance"), its isolation from the average worker, and its inattention to the basic product--had the unmistakable ring of truth.

But was Perot's approach the best way to salvage GM? Could Perot have employed any other tactics? Content with offering the play-by-play, Levin never bothers to wrestle with those questions. Mason's biography--and subsequent events--provides some additional clues.

On Wings of Escrow

While Levin clearly relied on Perot and his associates for much of his detail, Mason, who initially sought a collaboration, seems to have been liberated by his subject's refusal to cooperate.

Forced to rely on others, Mason has dug up an assortment of fresh nuggets. We learn that some of Perot's self-spun tales about his youth in Texarkana are embellished. One boyhood friend, for example, brands as "bullshit" a famous anecdote about Perot delivering newspapers through the local black ghetto on horseback.

Mason also reminds us that the man hailed as a hero in the 1980s by GM's unions waged open warfare with organized labor in the 1960s. When one California facility voted to organize, Perot shut the place down, writes Mason, "rather than tolerate a union beachhead in EDS."

Mason reveals Perot's genius for media manipulation. After hand-picking spy novelist Ken Follett to recount EDS's Iranian rescue mission (eventually titled On Wings of Eagles), Perot personally negotiated changes in the manuscript with the benefit of the ultimate leverage--the right to kill the project by paying the publisher $1 million. Perot even retained casting and script approval for the resulting TV miniseries.

With the aid of depositions from a subsequent court fight, Mason also offers a distinctly different view of Perot's battle with GM. If the automaker was slow to change, Perot was too often uncompromising, refusing to budge, threatening "World War III." He suggests Perot was incapable of answering to others or working within a system. He "misunderstood the challenge at GM. The rules of warfare are different inside the castle walls, where ... feats of individual bravery are less important than cooperation."

Perot also could be disingenuous. Mason notes that after GM's board decided to buy out the troublesome Texan, Perot privately negotiated a premium price of $742 million for his stock, then publicly denounced the expenditure as outrageous at a time GM was closing plants. Perot embarrassed GM with his announcement that he would put the money in escrow to give the automaker a chance to reconsider, but, as Mason reports, he never actually sequestered the funds.

After the buy-out was complete, Perot raided EDS's ranks to launch a competing data-processing company. In an extraordinary act for a man who spoke loud and often about loyalty, he ridiculed the new EDS management--executives he once trained and praised--and predicted disaster for the company. The forecast has proved wrong. Relations with GM have improved; earnings and profits are strong. Perot, writes Mason, "reacted badly to the news that EDS could live without him."

Although Perot contains a welcome, less starry-eyed view of its subject, as well as some good--if incomplete--reporting, terrible organization dooms the book. Instead of chronological structure, individual chapters jump back and forth wildly in time. This makes it difficult for the reader to see how events--and the passage of time--have shaped Perot.


Reading the two books, we are left with the contradictions. Ross Perot is the demagogue who whipped up antidrug hysteria in Texas by catering to the worst fears of affluent white parents. In 1988, he proposed solving Dallas's drug problem by cordoning off infested black neighborhoods and sending in hundreds of cops for house-to-house searches. Yet thesame man magically brought groups of Texas businessmen to their feet with a call for higher taxes to fund his splendid vision of transforming the state's dismal system of public education. And he had the will to push through a package of legislation aimed at realizing that vision.

Perot defies easy comprehension because he is no ideologue: he reacts to issues on instinct. When right, he is an incomparable ally; when wrong, he is a fearsome foe. There is a simple reason: Whatever course he selects, Perot is always utterly convinced of the righteousness of his cause. Those who disagree with him not only become the enemy, they take on dimensions of evil.

Perot often quotes a remark by Winston Churchill that he clearly has enbraced as his credo. "Never give in. Never give in. Never. Never. Never." The comment appears in both these books, as it did in a magazine profile of Perot I wrote two years ago. A few weeks after my story appeared, I received a letter from a South Texas rabbi. He suggested that Perot should quote Churchill's complete statement: "Never give in--in nothing great or small, large or petty--never give in except to convictions of honour and good sense."

(*1) Irreconcilable Differences: Ross Perot versus General Motors. Doron P. Levin. New American Library, $9.95.

(*2) Perot. Todd Mason. Business One Irwin, $19.95.
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Title Annotation:Doron P. Levin's 'Irreconcilable Differences: Ross Perot Versus General Motors
Author:Elkind, Peter
Publication:Washington Monthly
Date:Nov 1, 1990
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