Perot, Ross

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Perot, Ross

(1930-)
Perot Systems Corporation

Overview

Ross Perot has earned a reputation as a successful business executive, a fiercely patriotic citizen, and a formidable political candidate. He built a computer company from the ground up, turning it into a major enterprise that has made him a billionaire. He has used some of his vast wealth to improve the lives of war veterans and to stage two campaigns for President of the United States. In so doing, he has made his voice heard within American society.

Personal Life

Perot was born Henry Ray Perot on June 27, 1930 in Texarkana, Texas. He was the last of three children born to Elias Perot, a cotton broker and horse dealer and Lulu May (Ray) Perot, a homemaker. Perot legally changed his name to Henry Ross Perot when he was 12 years old in honor of his brother, Gabriel Ross Perot, Jr., who died of a stomach disorder in 1927 at the age of three. Perot grew up in a modest home with his sister Bette in Texarkana, Texas attending the private Patty Hill Elementary School for four years before transferring to public school. Perot's early life was greatly influenced by his parents. He admired his father's business skills and his mother's strong discipline and religious faith.

By the age of seven, Perot had his first job. He began working for his father, breaking horses for a dollar each. He also sold Christmas cards and garden seeds door-to-door, but quit after he learned the profits were seasonal. Other endeavors included selling magazines, buying and selling horses and calves, and collecting for classified advertisements. At the age of 12 Perot created his own paper route for the Texarkana Gazette, offering to deliver papers in New Town, an impoverished area of Texarkana that had no paper delivery service. Because the Gazette did not think Perot could succeed in New Town, the newspaper offered him a higher-than-average commission. Working his new route first on horseback then later on a bicycle, Perot shocked his employers by quickly turning a profit. He was so successful that within two years the Gazette was trying to back out of its deal to pay Perot a higher commission. Only by appealing to the paper's publisher was Perot able to hold his employers to their promise. At the age of 12, Perot joined the Boy Scouts. Just 16 months later, he reached the rank of Eagle Scout. By comparison, only one percent of all Boy Scouts ever reach Eagle Scout, and the normal amount of time to achieve that rank is three to five years.

In 1947, Perot graduated from high school and enrolled at Texarkana Junior College where he spent two years, before entering the United States Naval Academy (USNA) in Annapolis, Maryland. He spent four years at the Naval Academy, graduating in 1953. Despite finishing in the middle of his class academically, Perot was elected by his classmates as best midshipman. He also served as class president, chairman of the honor committee, and battalion commander, among many other positions.

Upon graduation, Perot served four years, first on the aircraft carrier U.S.S. Sigourney and then the U.S.S. Leyte. He had originally signed up for two years of service, but when the Korean War broke out in 1950, his commitment was extended to four years. In 1957, Perot's ship was headed towards Korea, but the war ended and he was discharged. Perot married Margot Birmingham in 1956 and they had five children (Ross, Jr., Nancy, Suzanne, Carolyn, and Katharine.)

Career Details

While in the Navy, Perot served as an official greeter. In this capacity, he was introduced to a representative of International Business Machines (IBM) who was impressed with Perot and suggested Perot look him up after being discharged. Subsequently, in 1957, Perot moved to Dallas to take a job selling computers for IBM. He was soon drawing the largest commission checks in the company. By 1961, IBM executives decided to set quotas on how much commission a salesperson could earn each year. In 1962, Perot reached his quota by January 18, less than three weeks into the year. While at IBM, Perot had an idea not only to sell computers, but also to lease unused computer time along with software and technical support. IBM was not interested in pursuing this new concept. Growing frustrated, Perot left IBM in 1962 to start his own company, Electronic Data Systems, which would be based on his rejected idea.

When Perot started EDS, he received 78 rejection letters before making his first sale to Collins Radio in Cedar Rapids, Iowa. However, EDS's business did not skyrocket until 1965 when the federal government introduced Medicare and Medicaid. In 1965, Perot won contracts in 11 states to computerize the billing systems for these two programs. Finding his niche in the insurance business, Perot began gaining more clients. In 1968, EDS was worth $2.4 million. On September 12, 1968, Perot made EDS stock available to the public. One week later, he was a billionaire. By 1970, EDS had over 1,500 employees.

Perot's business ventures suffered substantial losses in the first half of the 1970s. In 1971, in an effort to save the failing American stock market, Perot purchased du Pont-Glore, Forgan, Inc., one of the largest brokerage firms on Wall Street. The company was in serious financial trouble, and many feared its failure could threaten the stability of the entire stock market. Over the next three years, Perot invested approximately $97 million. By 1974, Perot conceded to failure and dissolved the company, losing between $60 million and $70 million in the process.

In 1984, Perot sold EDS to auto manufacturer General Motors (GM) for $2.5 billion. Perot remained chairperson of EDS and joined the GM board of directors. GM purchased EDS in order to consolidate its computer systems that were spread around the country in over 100 locations. Over the next two years, EDS grew from 15,000 to 40,000 employees and increased its value from $926 million to $5 billion. However, in 1986, with tensions between Perot and GM executives growing over management style and direction, Perot agreed to allow GM to buy EDS from him for a reported $700 million. Perot agreed to refrain from opening a for-profit data processing company that would compete with EDS for at least three years. The agreement also stipulated that Perot could not operate a competing business without profit for 18 months. Exactly 18 months later, Perot formed Perot Systems Corporation. Almost immediately, he won a contract to update the United States Postal System. However, Perot was forced to drop the contract after complaints of contract violation by EDS.

In 1989, Perot invested $20 million in NeXT, a new business being formed by Steve Jobs, the founder of Apple Computer. Also during the 1980s, Perot began to invest heavily in real estate in Texas. Accounting for all his business ventures, Perot's net worth has been estimated at over $3.3 billion.

During the 1990s, Perot wrote six books: United We Stand: How We Can Take Back Our Country (1992); Not for Sale at Any Price: How We Can Save America for Our Children, (1993); Save Your Job, Save Our Country: Why NAFTA Must Be Stopped-Now! (1993); Intensive Care: We Must Save Medicare and Medicaid Now (1995); Preparing Our Country for the 21st Century (1995); and The Dollar Crisis (1996), co-written with retired Illinois senator Paul Simon.

Perot is the recipient of numerous awards, including the Winston Churchill Award, presented to him in 1986 by Prince Charles, and the Raoul Wallenberg Award. In addition, he has been inducted into the National Business Hall of Fame. For public service, he has received the Jefferson Award, the Patrick Henry Award, and the Eisenhower Award.

Social and Economic Impact

While Perot was building his business empire, he was also making his name known in the public arena. In 1969, he established the nonprofit Perot Foundation, contributing more than $2 million to the public schools in Dallas and $1 million to his beloved Boy Scouts of America. Perot added to his reputation as a good citizen and superpatriot in 1969 when he was called to the White House to help develop a plan to aid prisoner of war (POWs) in North Vietnam. Perot had already created United We Stand, an organization that called attention to the plight of POWs and those missing in action. In a grand effort, Perot rented two Braniff airplanes, stuffed them with 30 tons of medicine, Christmas gifts, and letters from home, and flew to Vietnam. Eventually, some of the gifts reached the POWs and the increased publicity helped improve conditions.

Chronology: Ross Perot

1930: Born.

1953: Graduated United States Naval Academy.

1957: Became salesperson for IBM.

1962: Founded Electronic Data Systems Corporation (EDS).

1979: Orchestrated rescue mission of EDS employees held hostage by Iranian government.

1984: Sold EDS to General Motors.

1988: Founded Perot Systems Corporation.

1992: Ran for United States President.

1992: Published United We Stand: How We Can TakeBack Our Country.

1996: Ran again for United States President.

Perot appeared on the national news again in 1979 when he staged a rescue effort to free two EDS employees who had been imprisoned without charge in Iran. EDS had sent employees to Iran to manage the government's social security system. After two years, two employees were arrested and sent to a maximum-security prison in Tehran. Their captors demanded $12.5 million, the exact amount the government owed EDS for its services. Perot formed a rescue team, which managed to free the two men, along with 11,000 Iranian prisoners and mental patients, by staging a riot outside the prison. The rescue was documented by spy novelist Ken Follett in the book On Wings of Eagles, which was later adapted as a television mini-series.

Perot's name became a household word in 1992 after he announced that he would enter the race for the U.S. Presidency on February 20, 1992, on the Larry King Live television show. He would run, he insisted, only if his name was placed on the ballot in all 50 states. This sparked a phenomenal grassroots movement that swept the nation. Perot unofficially entered the presidential race.

At first spared the negative campaigning by the Clinton and Bush camps who did not want to alienate undecided voters, Perot's campaign received significant support and approval from the many voters put off by politics-as-usual. Yet, by July 1992, after spending $10 million of his own money, Perot was on the ballot in only 25 states and his campaign was becoming increasingly burdened with internal conflict. On July 16, 1992, Perot dropped out of the race. However, his withdrawal was short-lived. Those working to get him elected did not stop their efforts, and on September 18, 1992, he was on the ballot in all 50 states. He officially re-entered the race as an independent candidate on October 1, 1992. On Election Day, Perot earned 19 percent of the vote, Bush earned 38 percent, and Clinton earned 43 percent. Although not able to win the election, Perot had stirred the pot for an election season and made a respectable showing at the polls.

Over the next four years, Perot organized his grass-roots movement by creating United We Stand, America. He used this organization as a forum to keep his ideas before the public. In 1994 he founded the Reform Party, a new political party, and named himself a candidate for the party's nomination to the upcoming 1996 presidential election. The mood of the country was different this time, and Perot did not prove to be as popular. He even had to struggle to gain his own party's nomination over his opponent Richard D. Lamm. He was denied a place in the presidential debates because the Presidential Debate Commission ruled that he did not have a realistic chance of winning in November. On Election Day 1996, he received 8 percent of the popular vote.

Perot is a noted philanthropist. According to Texas Monthly, in June 1996, he donated $23.5 million to the University of Texas Southwestern Medical Research at Dallas to support the Erik Jonsson Center for Research in Molecular Genetics and Human Disease. Other major gifts between 1995-1997 include a total of $20 million to University of Texas Southwestern, $15 million to the Texas Research Park, $14 million to the Dallas Symphony Orchestra, and $1 million to the Boy Scouts of America.