Perot was a burr under Roger Smith's saddle
He asked tough questions; GM wouldn't answer
Edward Lapham is the executive editor of Automotive News.
"I'm just going to be the guy over here working on computer systems,'' Perot told an Automotive News reporter in early 1985.
I'm not sure anyone believed him.
Perot already had a reputation as the kind of guy who, when he got involved in something, really got involved. Some would have called him a hands-on manager. Others thought of him as a cowboy and a pest.
But reporters loved him. He was his own best PR guy because he always returned phone calls from reporters and would even wait on hold to speak to them.
The plain-talking entrepreneur from Texarkana already was something of a national folk hero for the way he rescued two employees held hostage in Iran in 1979. The story was told in the book On Wings of Eagles by Ken Follett.
Perot blew into Detroit after GM paid $2.6 billion to acquire Electronic Data Systems Corp., which Perot had founded in 1962 with $1,000 of family money.
Photo credit: JOE WILSSENS
As part of the deal, Perot received 5.6 million shares of GM E-class stock that were worth 2.8 million GM votes, which made him the largest individual GM stockholder and got him a seat on the board. Perot stayed at the helm of EDS, which was to be an autonomous unit inside GM charged with minding GM's data and integrating the automaker's diverse, unrelated global computer systems.
In the beginning of the relationship, it seemed to Perot that GM CEO Roger Smith was on the right track, trying to "revitalize this huge giant.'' Perot also liked the Saturn concept of a new way to make and sell cars.
But as a big shareholder with a big interest in the future of GM, he visited dealerships, drove the future products, attended lots of meetings — and took a deeper look inside the company.
Before long, cultural clashes arose between traditional GM employees — accustomed to a slow-moving bureaucracy — and the newcomers from EDS who were used to moving quickly and acting in an entrepreneurial manner. They wanted to change things in a hurry. They stepped on toes and didn't care. And longtime GM-ers who were transferred to EDS bristled at the rigid dress codes and behavioral standards.
$750 million to part
Inevitably, Perot learned all the questions that GM directors and managers weren't asking. He became a burr under Smith's saddle by asking them himself and offering what he considered helpful suggestions and critiques about how GM could improve itself.
For example, Perot objected to GM buying Hughes Aircraft Co. for about $5 billion instead of investing in more and better products. Behind closed doors, he and Smith increasingly banged heads.
Perot hasn't spoken publicly about GM in years, and he declined to be interviewed by Automotive News for this 100th anniversary issue.
But the feisty former independent presidential candidate hasn't always held his tongue. Perot famously compared trying to change GM to teaching an elephant to dance. He also criticized his fellow GM board members as "pet rocks'' who didn't have the gumption to do what was needed.
In 1986, Smith and the rest of the board parted ways with Perot, paying him $750 million to go away.
Perot never fit in at GM, and part of that was his fault. But it was the automaker's loss.
If, in the mid-1980s, GM had adopted some of Perot's ideas and his attitude, it might be a different company today.
You can reach Edward Lapham at email@example.com.