Snyder: We need tangible, real results

This is one of a series of Detroit News interviews with candidates for governor. The following are edited excerpts from an interview with Republican Rick Snyder, former president of Gateway, a computer firm, and co-founder and CEO of Ardesta, an investment company.

Q . You're coming out of business and you're pitching that as an advantage. Your opponents say you don't have the political skills to navigate what promises to be a pretty difficult environment in Lansing. How do you respond?

A . I think it would be a different scenario if I believed the political system was working well. I believe it's a broken culture, and I don't believe they are accomplishing what people deserve out of government. So, if you take that as a starting point, that's where I'd argue some of the experiences they have are not necessarily constructive.

I'm the person with experience as a chief executive, knowing how to manage a large organization and in many respects, those other individuals lack that experience. The bigger issue is on the legislative side, that's where people talk about not having experience. But I think I have great experiences. Quite often people will say, "You're a CEO type; you're used to telling people what to do; you don't get it." In my view, that's actually a very ignorant position to take. Do you know any business where you tell your customers what to do? So, you have to learn to build relationships. At Gateway, I was responsible for essentially running the whole operation, and one of the things I was responsible for was doing intellectual property agreements, patent agreements, and those were fundamental to keep us in business. And who did we have to negotiate those agreements with? Those agreements were with companies like IBM, Compac, Dell -- companies that just wanted to see us put out of business. So we had to learn how to negotiate successful commercial agreements with companies that fundamentally wanted to destroy us.

Q . Was the company stronger when you left than when you came?

A . Absolutely.

Q . You're accused of slashing the work force; shipping jobs overseas; doing this, that and the other thing. What is your record?

A . When I joined Gateway as an employee, there were 763 people. When I left it had over 10,000 employees. It had gone from $626 million annual revenue the year I started to over $6 billion when I left.

Q . The Business Leaders for Michigan has a very specific plan to return Michigan to competitiveness. Do you support that plan in its entirety or are there elements of it you don't like and elements you do like?

A . Most of it's a well-done plan. There are a few differences. They talk about reducing the Michigan Business Tax. My view is it simply needs to be eliminated. I proposed an alternative for replacing it with a corporate income tax of 6 percent. Very simple. (With) the Michigan Business Tax, you may have a situation where you make no money and you can have a significant tax liability. Second, you have two different companies and two different industries that make the same amount of money. One of those companies could pay as much as four or five times in tax liability as the other company. It's like a blinking red light -- job killer, stay away.

Q . If you were still running a major high-tech company looking to locate a new facility, would you choose Michigan? Why or why not?

A . Michigan does have some fundamental things going for it that I think are great, and that's largely our talent. The work ethic; the quality of people that are available here. The quality of life that's possible in this state. But one of the major problems is our government is an impediment. We need to get our government out of the way. There's too much regulation, but an even bigger problem is how regulation is being applied. They're going beyond what the written regulations are and they're slowing people down and they're delaying projects when people are complying, and that's just wrong. The other piece is our economic development policies. We've lost our course there. We're not doing economic development the right way. I hear stories all the time about how there are cases of Michigan people growing their business that the Michigan Economic Development Corp. or the governor hasn't paid any attention to and that are being courted by the governor of Tennessee.

Q . Where do you stand on tax breaks, film credits, etc?

A . They've become like popcorn and candy, and it's not an appropriate use of incentives. It's gotten way out of control. They're trying to buy people into coming to Michigan because we have an abusive tax system.

Q . Would the 6 percent replacement corporate income tax make Michigan competitive with states like Indiana, Tennessee and others?

A . It would make us very competitive.

Q . Would it result in overall tax decrease for business?

A . A fully phased elimination would be a significant tax reduction of about a billion and a half dollars. It would take place in some rational fashion given budget concerns.

Q . So, you've taken a billion and a half out of the revenue stream for the state, which has already gone down from $10 billion to $7 billion (in the general fund budget). That would take it down to $5.5 billion. Can you run a state like this on $5.5 billion?

A . You just don't do that piece alone. One of the other things that we really need to work is the expense side. My proposal talks about value for money budgeting. We really need to show measurable, tangible, real results that impact people's lives in a positive way. We need to get the outcomes and real measurable results, and the most obvious to me is education. What's the point of our education system? The relevant point of spending all that money, which is now about a billion dollars a grade, is shouldn't we be focused on what we need to do to get each child in our schools a good year's education each and every year?

Q . One of the ideas on the table is taking the sales tax and stretching it out over certain services. Do you favor that idea?

A . I don't think it's appropriate at this time. I think over the longer term we should look at overall tax reform.

Q . Are there things we're doing as a state government that we ought not be doing? Are there things we could perhaps farm out to the private sector or just stop doing altogether?

A . I don't believe in just privatizing things. The key issue is competition. I would create situations where the public sector has to compete. The people in that division or department need to put together a proposal to say why they should earn this work and essentially treat them like a supplier in delivering great results. One of the huge issues, though, is public employee compensation. Is (the pay) financially affordable and is it competitive with the private side? And I don't believe you can check either one of those boxes today. We have to recognize these are people and they have families. So, it's not out of malice or anything else, it's how do we do this in a constructive fashion?

Q . How do you work through union contracts and through officials at the local level that you don't necessarily control?

A . You just don't pick a fight without explaining what your issues are. One of the first things I want to do is call for a real balance sheet in this state. Let's do a real balance sheet in English that the average person can understand that shows our assets and liabilities (and) put it out to every person. You'll see we significantly have spent beyond our means. We can't afford it. I would ask the same thing of every jurisdiction in the state. It's a really ugly picture. People can get through this and survive. The auto industry is a pretty good model to show that. You can look at people and say, would you rather be a Ford or a General Motors in this process?