Word: perotism
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...heart of the dispute was the relationship between EDS and GM. The two have become closely linked: EDS runs all GM's computerized operations, from processing paychecks to programming robots on assembly lines. But in the original merger agreement Perot had insisted that he and EDS be granted a highly unusual degree of independence. He did not want the parent company to audit EDS. Moreover, he demanded that EDS be allowed to maintain a different pay structure from GM's?one that called for greater variation in salaries and bonuses, to give EDS employees better incentives for good performance...
...part, Perot became publicly critical of a management philosophy that, he believed, put too much of the burden of cost cutting on blue-collar workers while preserving such executive perquisites as private dining rooms and chauffeur-driven limousines. Chairman Smith fired back with some broadsides of his own. Perot's office, he complained to the Detroit Free Press, "makes mine look like a shanty-town. He has a Gilbert Stuart painting hanging on the wall." Said Smith: "[Perot] is a different type of guy than we are in GM. He is very independent. He is the type of guy that...
Some industry experts thought that Smith was justified in driving Perot away. Said Bernard Addo, an auto analyst for Manhattan's Argus Research: Perot may have been a skillful entrepreneur, but entrepreneurship and team management are two different things. Perot was hurting GM's stock by publicly bashing the company's management." Other observers were appalled at the buyout. GM officials got rid of Perot, contended Mary Anne Devanna, director of research at the Columbia Business School Management Institute, "to protect their own hides. Their careers, big bonuses and fancy perks all depend on maintaining the status...
...have heard the last of Perot. Although Lester Alberthal Jr., the president of EDS, has now been named the new chief executive to run that company, Perot will stay on with the title of founder. He intends to keep an office in Dallas and an eye on things. "I'll be here as long as they need me," said Perot. GM may fear that if it shoved Perot completely out the door, many important EDS executives would follow...
...longer, though, will Perot sit on GM's board and offer suggestions on how to manufacture cars more efficiently in the high-tech age. With or without Perot, the biggest challenge facing Roger Smith remains the same: to prove that he can turn around GM's sagging fortunes...