.1
Tuesday, December 2, 1986TThe Battalion/Page 5
Provisions in EDS stock prevent
briticism from either company
dand
DALLAS (AP) — H. Ross Perot
aid Monday his sale of stock in Elec-
[tronic Data Systems Corp. to parent
ieneral Motors contains multimil-
jion-dollar penalty provisions that
)an either company from criticizing
he other.
In a news conference at the head-
jiiarters of the computer services
;ompany he founded in 1962, Perot
aid the $700 million he receives
rom the sale of his EDS stock to GM
be placed in an escrow account
a; 61
'’as on
naiu» - mt 'l Dec. 15 to give GM’s board of
lirectors time to consider the deal.
Perot, the largest EDS stock-
tolder, who also is resigning as EDS
hairman, said the deal with GM es
tablishes penalties of up to $7.5 mil
lion if either side criticizes the other
titer he officially takes leave.
Perot said the sale of his 1 1.3 mil
lion shares, a transaction he signed
■ JMonday, would bring him $700 mil-
(M) llion, although GM said the amount
III (was $750 million. Perot stuck by his
figure and was unable to account for
the discrepancy.
His announcement Monday came
after recent reports of rocky times
between the military-style operation
of Perot’s entrepreneurial EDS and
the huge, less disciplined automaker
it put 1 that acquired it two years ago.
Recently, Perot publicly criticized
GM’s operation and he said Monday
he didn’t like serving on GM’s board
of directors.
rfot
liCj; ||
'CW 1
d drf |
City's libraries
being forced
into day care
ARLINGTON (AP) — More
children are using the city’s li
braries, but not always for read
ing and studying, as librarians
find themselves forced into the
role of babysitter.
Kids are being dumped on Ar
lington’s live libraries, sometimes
for entire days, because of a
shortage in low-cost day care, of
ficials say. Every day at each li
brary, 10 to 20 children are left
on their own, Corliss said.
“Most of the children are kin
dergarten age and younger,” Jack
Corliss, director of libraries for
the city of Arlington, told the
Fort Worth Star-Telegram.
The city’s Comprehensive
Plan, an outline for the future of
the city, recommends that the
school district, University of
Texas at Arlington and the Ar
lington Human Services Project
conduct a study of day-care
needs.
Perot: Corporate culture
behind sale of EDS stock
DALLAS (AP) — The clashing
corporate cultures that brought
an end to the two-year marriage
between individualist H. Ross
Perot’s Electronic Data Systems
Corp. and General Motors might
have been expected given Perot’s
military-style operation of EDS
and his entrepreneurial spirit.
On Monday Perot gave up
struggling with the difficult
union, a partnership many ob
servers had wondered at from its
start.
He resigned as chairman of
EDS, the hugely successful data
processing business he started in
1962, and said he sold his 11.3
million shares of stock in the com
pany for $700 million. GM valued
the deal at $750 million. When
EDS was acquired by GM in 1984,
the $2.5 billion purchase is be
lieved to have made Perot the
richest man in Texas.
But Perot claimed he was more
excited the day he became an Ea
gle Scout than the day he found
out how wealthy he was.
“Money doesn't mean anything
to me,” he said once. “I’ve never
wanted a lot of money. Don’t get
me wrong. I’d rather be rich than
poor.”
After the GM merger, he com
plained that the world’s largest
automaker was too bureaucratic
and said its management was out
of touch with its workers.
He publicly recommended GM
eliminate executive parking and
dining rooms and move the exec
utives out of their suites on the
14th floor of GM headquarters.
“I just hate formal meetings
where you pass resolutions,” he said.
“It’s just not a place for a person
with my temperament and net
worth.”
Asked how he felt about the sale
of his company he said, “I don’t ex
pect to get much sympathy, because
I’m in pretty good shape. I don’t
have any stock, but I won’t be down
at the shelter tonight either.”
Under the agreement Perot out
lined Monday, he has the right to
start a non-profit company of his
own based on the same approach
EDS has taken, and he can start a
profit-making company at the end
of three years. He also has the right
to raid EDS at that time.
“At the end of three years, anyone
who chooses to work with us has that
right,” he said.
The escrow account, he said, is “to
give them an opportunity to recon
sider this and to be hit from all con
stituencies.”
“I cannot accept this money with
out giving GM a chance to change its
mind,” said Perot who sold the com
pany to GM in 1984 for $2.5 billion.
He also referred to the 800,000
people employed by GM, saying,
“This is not nearly as significant to
me today as losing your job at a
closed plant.”
Perot questioned whether paying
him “is the highest and best use of
that money, particularly when peo
ple are being laid off.”
He added that the “$700 million
would buy you a brand-spanking
new world-class car plant.”
Perot said he will stay on with the
company, despite his resignation, to
help oversee the multimillion-dollar
contracts the company has.
He said GM also wants him to stay
because “it’s vety important from a
business point of view.”
He said if EDS continues to do
well, he’ll be satisfied and won’t feel
compelled to start his own company.
Cisneros says cities will fight
further federal budget cuts
SAN ANTONIO (AP) —The Na
tional League of Cities will be on the
offensive against further federal cut
backs in order to reverse a “higher
level of human suffering,” NLC
president and San Antonio Mayor
Henry Cisneros said Monday.
Cisneros, a member of the Texas
A&M Board of Regents who is fin
ishing out his term as head of the or
ganization, said cities suffered
through cuts in federal revenue
sharing and other federal budget
cuts. Remedies are needed for illiter
acy, unemployment, drug addiction
and homelessness, he said in an
opening address to the League’s
5,000 delegates.
“There seems to be a higher level
of human suffering in too many
places in the country,” Cisneros said.
“I think this organization, as the
spokesgroup for the nation’s 'cities,
has to be the conscience of the coun
try to focus on these questions.”
The 38-year-old mayor said the
NLC would give priority to issues in
tax reform, reauthorization of cer
tain programs and welfare reform.
“When we say we want reauthori
zation of those programs, we’re
going to be on the offensive and ag
gressive about it. When we say we
need to have a different concept of
federalism we’re going to be offen
sive and aggressive about it,” Cisne
ros said.
Cisneros said he expects changes
in the tax bill now that the Demo
crats have taken control of the Sen
ate and said he had gotten a commit
ment from the National Governors
Association that states would work
with cities in tough economic times.
“We’re fighting, all of us, together
a good fight,” he said.
The convention, which concludes
Wednesday, has attracted prospec
tive presidential candidates and in
cludes numerous workshops on the
problems of running cities.
In a session on management,
Houston Mayor Kathy Whitmire
said city governments cannot do all
the work and sometimes must con
tract out to private companies for
municipal services.
She said the decline in the price of
oil has hurt Houston, like many
other cities across the Southwest,
and that cities need to find ways to
be more productive and efficient.
“These are not only city govern
ment problems. These are commu
nity problems,” she said. “We have
been challenged as never before to
provide needs for our citizens.”
At another seminar on how cities
and private businesses cooperate for
urban development, one official said
the wave of corporate mergers and
takeovers would make it more diffi
cult for cities to enlist business help.
Ray Remy, Los Angeles Chamber
of Commerce president, said the
threat of takeovers was forcing busi
nesses to pay more attention to the
bottom line and making them less
likely to invest money in long-term
inner-city development.
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