PEROT, H. ROSS 1930-

TYCOON

The Stuff of Fiction

The life story of H. Ross Perot seems more like a good novel than reality. A U.S. Naval Academy graduate, Perot joined IBM and soon became one of its top salesmen. But Perot wanted more challenges, and choosing to go out on his own, he formed Electronic Data Systems (EDS). Six years later he took it public, and the thirty-nine-year-old Perot was a billionaire. Perot later made headlines for his failed efforts to bring American prisoners of war (POWs) home from Vietnam, and then, ten years later, he was back on the front pages for his successful covert operation that rescued EDS employees being held in an Iranian jail by the Ayatollah Khomeini. He returned to the limelight when he became the largest stockholder of General Motors. In 1992 he ran for president.

Perot and EDS

From his days with IBM, this man from Texarkana, Texas, came to believe there was a market for someone who could design, install, and operate data-processing systems for clients. In 1962, with one thousand dollars in savings, Perot founded EDS, a computer-services company, to fill this niche. By attracting major clients, mostly large insurance companies such as Blue Cross, the company was profitable, but with revenues of $7.7 million in 1968, Fortune magazine referred to it as an industry "pip-squeak." That same year, however, Perot recapitalized his firm with 12 million shares. Then with the brokerage house of R. W. Presspich and Company, he took his firm public. Initially offered at $16.50 per share, EDS closed its first day of trading at $23.00. Perot had offered only 650,000 shares for sale, and personally held 9 million. Overnight, his EDS shares gave him a net worth of $200 million. During the great bull market of 1969-1970 EDS shot up to $150 per share, and "the Fastest Richest Texan Ever," as Fortune had dubbed him, was worth __BODY__ billion.

The Two Rescues: Win One, Lose One

From his stock-market coup on, the wiry, five-foot-six-inch Perot thrived on media attention. In the fall of 1969 Perot began his efforts to free American POWs in North Vietnam. As part of his campaign, he collected nearly thirty tons of supplies and medicine, chartered two jets, and tried to take the cargo to the POWs. When the North Vietnamese officials refused to allow the planes to land, Perot then offered $100 million for the release of the prisoners. Although rebuffed, Perot's work led to better treatment of the POWs. Much more successful, however, was Perot's daring mission to rescue EDS employees from Iranian jails. In 1979 a disguised Perot first flew to Iran to tell the employees he was going to get them out. He then organized a private group of commandos, who succeeded in extracting the EDS workers from revolutionary Iran. Best-selling author Ken Follett's On Wings of Eagles (1983) was based on this story.

Perot and General Motors

On his fifty-fourth birthday Perot and GM chairman Roger Smith surprised the business world by announcing GM's purchase of EDS; from the deal Perot became the largest single stockholder of GM and a member of its board of directors. As GM struggled through the mid 1980s, Perot became very critical of company management. In December 1986 Smith and GM executives purchased Perot's 11 million shares for $62.50 a share, or nearly double the market price. Historian John Ingham said in Newsweek that "GM had paid Perot a cool $700 million to get out and shut up."

Act Four

Although Perot once told Newsweek magazine that he did not see himself "as someone who can save the United States," he apparently changed his mind in 1992. Fed up with the incumbent Republican president, George Bush, and not at all satisfied with the Democratic hopefuls, Perot entered the presidential race as a third-party candidate in the spring. Addressing Americans with simple language and quotable one-liners, he portrayed himself as a political outsider who could cut through bureaucratic red tape and spur economic growth. The unpredictable Perot, however, dropped out of the race in the summer only to reenter it in October. Bill Clinton won the election, but Perot received 19 percent of the popular vote, more than any other third-party candidate since Theodore Roosevelt ran on the Bull Moose party ticket in 1912.