It may have been just a fraction of the original $2.4 billion price tag for the purchase of Electronic Data Systems, but General Motors' $700 million buyout of EDS's founder - and GM's largest shareholder - H.Ross Perot, is still a staggering sum of money. When you add in the money paid to three other EDS officials, the total cost of the buyout is about $750 million. As Mr. Perot himself pointed out, that money ``would buy a new world-class auto plant and provide thousands of jobs to go with it.''
In fact, the buyout is costing General Motors about 50 percent more than the automaker announced last month that it expects to save by closing down nine assembly lines and partially closing two more - a move that will result in the layoff of as many as 29,000 employees.
There are other ways to measure and compare the cost of the Perot deal:
It works out to $163 for every one of the 4.6 million automobiles GM sold in the United States last year (including captive imports).
Put another way, it equals the average 1985 sales price - $11,860 - of 63,200 General Motors automobiles.
It comes to about 19 percent of GM's $4 billion profit last year.
It would pay for 19,480 GM workers based on an average yearly cost of $38,500 for wages and benefits. And for Perot alone, it is a 70,000,000 - yes, a 70 million - percent return on the $1,000 Perot originally invested to create EDS after he left his job at IBM 24 years ago.
But according to auto analyst Maryann Keller, all those numbers may not really tell the full story.
``The real [measure] is what EDS is worth with its top management gone,'' she says. ``That is going to be of paramount importance to a holder of GM Class E stock. Now, with people running EDS who are approved by the GM board, you have to wonder how people will feel about the stock.''
As part of its original purchase of EDS, General Motors issued ``contingencies'' guaranteeing Perot and other stockholders that their shares would be worth $62.50 each if held until 1991.
Nearly half the buyout costs covered the contingencies held by Perot and three other retiring EDS executives. It did not, however, cover the guarantees given other Class E shareholders, a GM spokesman notes.
So if the ouster of Perot harms EDS's performance on the market - as many analysts believe it will - part of the cost of the shake-up at EDS has yet to be paid.
On Friday, GM Class E stock closed at $29.12 a share. If the stock were to hold at that price - which it likely will not - the outstanding contingencies would set General Motors back as much as another $450 million.