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Perot calls for US industrial revival

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[B]By David P. Hamilton

In a talk laced with self-deprecating humor and sharp jabs at lawyers and management consultants, Texas billionaire H. Ross Perot deplored the nation's economic state and laid out his personal philosophy in front of a standing room only crowd in 54-100 yesterday.

Perot was at MIT as part of the Sloan School of Management's Distinguished Speakers program, according to Lester Thurow, dean of the Sloan School. Thurow denied rumors that Perot planned to make a financial gift to MIT, and Perot himself jokingly turned aside questions about the matter, saying he was at MIT "to get a loan myself."

A man once described by Fortune magazine as "a brilliant manipulator of emotions," Perot captivated the audience with plain "farmhouse talk" about the failings of the federal government and American business. "The lesson you learn in Fortune 500 companies is `Don't do anything wrong,' " he said. "That's a terrible lesson. How are you ever going to learn anything if you don't make mistakes?"

The mission for American workers is "to create jobs," Perot said. Some occupations are more productive in this regard than others, he suggested, asking audience members who intended to become lawyers or consultants to raise their hands. "Now, this isn't nice," he said once a handful had complied, "but who here is going to do some honest work?"

Perot's laundry list of American shortcomings is extensive. He told the audience that the United States is the largest debtor nation in history, commands a much smaller share of the advanced technology market than it did in 1980, and ranks 14th out of 15 industrial nations in academic achievement. "We beat Thailand," he said, grimacing.

"Out of success comes arrogance, and out of adversity comes strength," Perot continued. Japan had the opportunity to rebuild itself after the Second World War, whereas the US became used to its premier position in the global economy, he said.

Crucial to the reconstruction effort were the "brains and wits" that allowed resource-poor, island Japan to build a first-rate economy, Perot said. In 1946, for example, Honda sold motor scooters made from salvaged scrap metal, he said. Now it's one of the largest auto manufacturers in the world, he continued.

"It's now brains and wits time in America," Perot said. The task of business is to improve American manufacturing capability by managing more intelligently. "We're used to using capital as a bulldozer," he said. "We've got to learn to use it as a scalpel."

In order to be more effective, management must concentrate on producing quality products and treat workers as equals, Perot said. One way of accomplishing both goals is for new managers to "start at the bottom" of an enterprise, rather than moving directly into upper management, he said. The typical management bureaucracy isolates managers in a "briefing box" which divorces management decisions from "the real world," he continued.

Perot also offered the audience some commonsense advice. "Money doesn't buy you happiness," he said in urging students to choose jobs on the basis of their real interests instead of taking "the highest offer." Similarly, he summarized his labor relations philosophy with the Golden Rule: "Treat others as you'd like to be treated."

During the question period, Perot recounted some of the more colorful highlights of his career, such as the time he organized a team to rescue two of his executives who had been imprisoned during the Iranian revolution. The team pulled off "the largest jailbreak in history" when an Iranian member incited a mob to storm the prison, freeing 13,000 inmates.

Although at one point Perot said he could spend an entire afternoon telling tales of the mistakes he's made, the only example he mentioned when a student asked him about the lessons he'd learned from failure was a gripe about the time he sold his company, Electronic Data Systems, to General Motors. "My greatest mistake was believing that GM would honor their written contract," he said.

According to Fortune, Perot and GM have offered conflicting versions of the reasons for their disagreement. Perot claimed that he threatened to complain publicly if GM executives gave themselves bonuses in a year of poor earnings, while GM sources said Perot refused to allow a GM audit of EDS and bristled at GM's failure to sign fixed-price contracts with its subsidiary. The dispute came to a head two years after the sale of EDS, when Perot resigned from GM's board of directors, leaving with $750 million for his GM stock.

The lecture ended on a combative note when student activist Daniel J. Glenn G accused Perot of involvement in a number of covert activities such as funding the Nicaraguan contras and recommending the 1984 mining of Managua harbor. After hearing Glenn out, Perot calmly rebutted his charges, denying several of them and qualifying others.

Perot defended his readiness to help ransom a CIA chief held hostage in Beirut, saying "it's just a matter of doing what's right." When Glenn pressed him about his efforts to rescue prisoners of war in Laos and Cambodia, Perot replied, "If I were over there, I certainly hope someone would come to get me out."