The Nerd Shall Inherit
Former Gateway CEO Rick Snyder makes an outside-the-beltway play for governor.
by Susan J. Demas
June 16, 2010
The truth is, Rick Snyder wasn’t really called a nerd in high school.
The man who captured national attention for declaring himself to be “One Tough Nerd” in a gubernatorial ad first airing on Super Bowl Sunday wasn’t a misfit at Lakeview High School (“I didn’t have a pocket protector or anything,” Snyder says, adding that he played sax in the band). His G.P.A. and test scores weren’t sky high, although he can no longer remember what they were.
“I was not the highest high school student,” the silver-haired Battle Creeker admits with a smile. “It was a teenager thing. Basically, I was described as bored and occasionally sarcastic.”
But Snyder was a young man with a plan. When he was 14 he asked his mother about enrolling in an Introduction to Business class at Kellogg Community College. Helen Snyder, who went by “Pody,” told him to hold off because their middle-class family only had one car. So Rick came back when he was getting his driver’s license.
“She just got out the checkbook, wrote me a check and I started taking a college class,” he recalls. “She didn’t bat an eye…because a lot of parents would look at their kid and [say], ‘OK, you’re 16 and you’re going to take a three-hour, 8 a.m. class on Saturday?’”
That probably marked the beginning of his career as a nerd (“When people saw me going to college when I was in high school, yeah, that’s how you get that reputation,” Snyder says). It was also just the first step in the blueprint he designed his junior year for finishing his bachelor’s, M.B.A. and law degree in six years (“I loved to learn and wasn’t going to go to school for nine years,” he recalls).
“That was pretty much me,” the future Gateway CEO adds. “My parents were pretty happy [about my plan]…It was highly unusual.”
Snyder quickly amassed more than 20 credit hours by his senior year and met with the dean of admissions at the University of Michigan. He was admitted on the spot and started classes a semester early in January 1976. Eighteen months later, the 19-year-old had earned his bachelor’s degree in general studies, concentrating on economics and political science. He stayed on at U-M, racking up his M.B.A. in 1979 and J.D. in 1982.
From there, Snyder built an impressive career — and made millions of dollars — as an executive with Coopers & Lybrand, Gateway and Avalon Investments, a venture capital firm he came back to Michigan to get off the ground. He’s currently the CEO of Ardesta, his second investment firm. It was all part of his mantra to “make money, help people, have fun.” (“I’m pretty proud of the track record there,” he laughs.)
After conquering the corporate world, Snyder’s plan was to do something in public service, although he wasn’t sure about running for office. But his foray into politics didn’t surprise the former communications director for Gateway in the least.
“I always knew he had the ambition to do something better, something that was more challenging for him,” says Jim Wharton, now director of development and public policy for Mercy Medical Center in Sioux City, Iowa.
So when Snyder decided last year to run for governor, the methodical magnate naturally had a plan (“I viewed it as a startup,” he says). The 51-year-old had some political experience as the inaugural chair of the Michigan Economic Development Corp. (MEDC) from 1999 to 2001 — and was reportedly a finalist last year to direct the agency — but he had never appeared on a ballot.
He quickly amassed a team of well-known Republican operatives, starting with John Weaver, the architect of John McCain’s maverick 2000 presidential run. Soon Snyder enlisted former Michigan GOP National Committeeman Chuck Yob and his son, John, a conservative duo known for interparty warfare. For good measure, Snyder wooed away moderate California Gov. Arnold Schwarzenegger’s spokesman, Jake Suski. They devised a core message that it’s Rick — the tieless, tireless business guy with his powder-blue sleeves symbolically rolled up — vs. a gaggle of “career politicians.”
“He definitely wants to distinguish himself from the other candidates,” says Brandt Iden, Snyder’s Kalamazoo County chair, who’s seeking a spot on the county board as part of the “Run with Rick” program. “You won’t see him wear a tie or a formal suit. He’s like a lot of business leaders today.”
Not surprisingly, Snyder popped a 10-point plan for the state (what he calls “Michigan 3.0” in true computer-geek fashion) that includes scrapping the Michigan Business Tax and replacing it with a flat 6-percent corporate tax, investing in public transit and increasing arts funding. Those who haven’t waded through the white papers might have heard about it through his ads, which proclaim that the plan is so detailed “it’s likely no politician could even understand it.”
Candidates are typically advised to stay true to themselves, so it seemed only natural to brand Snyder as a nerd in the race. But no politician wants to seem like a wimp, hence the “tough” part. Snyder says he hopes the label is seen in a “self-deprecating way, in a constructive way.” The ads appear to have worked, as he’s shot up from single digits to first and second finishes in recent polls (“I was in the margin of error. I only had one way to go,” he jokes).
“I have a fairly unique educational background, but I don’t want to come across as just an intellectual or someone that…in a negative connotation,” Snyder adds in his slightly rambling way. “… If you look at where we’re at, I think that describes what we need — thoughtful, hardworking problem-solving.”
For many insiders — who interestingly refuse to go on record lest they offend a potential GOP nominee — Snyder presents a blend of arrogance and awkwardness in politics, down to his nasal pitch, clammy hands and PowerPoint presentations.
“It’s just his demeanor, how he is,” says GOP former House Speaker Rick Johnson. “If you get to know Rick, you know that arrogance isn’t it at all. He’s very down-to-earth and, one-on-one, he’s very personable.”
Middle class to mogul
So how did Rick Snyder go from living in a modest 900-square-foot home on Cereal City’s south side to running a computer giant generating $6 billion a year?
Snyder was a “late arrival” on August 19, 1958, born 20 years after his sister, Sharon, now retired and living in Gun Lake. Their father, Dale, owned a window cleaning business and served as a Battle Creek Township trustee during its merger with the city in 1983.
“My dad would rather have the security of working for a business than have the stress or the issues of owning something,” Snyder notes. “So it’s interesting. I think I was the reaction in a different way.”
The Snyders did teach their youngest a valuable lesson: how to make a decision (“Many parents don’t…And they loved me even when I messed up,” he grins sheepishly). That decisiveness has served him well, from his grand plan for college to countless calls he’s made in the business world.
Always industrious, Snyder started reading Fortune and Business Week starting at age 8, as he’s proclaimed in his first TV spot. And he landed his first job at 14 “doing whatever needed to be done” 40-plus hours a week at Gun Lake Northside Grocery near his family’s summer home. To pay for college and grad school, he worked as a research assistant, teaching assistant and resident adviser.
After finishing his law degree in 1982 — the peak of the last deep recession in Michigan — Snyder joined Coopers as a tax accountant in Detroit, choosing it over a job with “one of largest, most exciting companies in the world” in Houston — although he won’t reveal which one. He says the choice to stay in his home state was an easy one, especially since several executives offered to mentor him. One of them was Bob Anthony, who worked with him on a Ford Motor Co. audit and has since retired as senior partner with PricewaterhouseCoopers.
“He was exceptional,” Anthony recalls. “Very few measured up to him intellectually and judgment-wise…He was a very quick study. He could come to grips not just with taxes but with accounting.”
Coopers was an auspicious choice for another reason. It was there that Snyder met his future wife, Sue Kerr, a Dearborn native working as an executive assistant. The couple married in 1987 and has three children. Kelsey, their youngest at 13, has starred in one of Snyder’s campaign commercials and blogs on his website. Melissa, 18, just graduated from Greenhills High School in Ann Arbor at the same time that Jeff, 21, received his bachelor’s in psychology from Albion College.
“I always like to joke, ‘He’s got plenty of work to do in the family, at least for a little while,’” says Snyder, revealing his sometimes quirky sense of humor.
During his time at Coopers, Snyder also served as an adjunct professor in tax and accounting at U-M and taught for the volunteer income tax assistance (VITA) program (“So when I make these comments about our tax system, believe me, I know it pretty well,” he chuckles).
In 1989 he was promoted to head the mergers and acquisitions department in Coopers’ Chicago office. During that time he reviewed upward of 40 businesses a year, including a notebook company that a fledgling computer startup was exploring purchasing. Snyder told the young CEO, Ted Waite, to take a pass. The Gateway founder, in turn, liked his style and asked him to become his 763rd employee as executive vice president in North Sioux City, South Dakota (“He asked me to move out on the prairie…literally,” jokes Snyder in a well-honed line).
“It was a metal building with a parking lot and an alfalfa field around it…A lot of people thought I was crazy, because I was on a great career path at Coopers. I show up and say, ‘I’m going to leave this career, go move to this young company run by a guy in his twenties that ships computers in cow boxes out on the prairie.’”
Wharton recalls that Snyder was far from being a stuffed shirt (“There weren’t a lot of rules,” he says), although in typical accountant fashion, his boss wasn’t exactly garrulous.
“He’s one of those geeks you love,” Gateway’s former communications director laughs. “He knew exactly what needed to be done.” Wharton, on the other hand, was known as the office clown, holding court in his office as he’d prank-call random employees (“It was pre-‘Jerky Boys’ stuff, but it wasn’t obscene,” he smiles). One day Snyder walked in mid-call and the room cleared out.
“I thought, ‘Oh, God, this is the end of the line for Jimbo here,’” Wharton recalls. “But Rick just said, ‘I know the employees love it, but it’s probably not a good thing to do. You should probably make that your last show.’”
In 1993 Snyder helped Gateway go public and he was eventually promoted to president. When he left in 1997 as the company was moving its headquarters to California, there were more than 10,000 employees in the United States and another 3,000 worldwide.
Afterward, he continued to serve on the board of directors and was sued in 2000 along with two other Gateway executives. The issue was that Snyder cashed in on 355,000 stock options worth $23.7 million at a time that executives admitted they misrepresented the company’s financial outlook. The case, Scheinhartz v. Waitt, was consolidated into a class action suit for alleged financial misreporting and Snyder was not named in that lawsuit. The case was settled without any admission of wrongdoing.
“I got a fraction of ownership in a company,” Snyder said at the gubernatorial debate at the Mackinac Policy Conference earlier this month. “It was successful, and I sold it off to take care of my family. What did I do? I started two venture capital companies in Michigan.”
That hasn’t stopped Democrats like Mainstreet Strategies partner Joe DiSano, who has since informally advised Lansing Mayor Virg Bernero, from passing out fliers raising it as an issue. Democrats and Attorney General Mike Cox, a Republican candidate for governor, also have accused Snyder of doing some Dick DeVos-style outsourcing at Gateway, citing a 2004 Securities and Exchange Commission filing.
Snyder dismisses this as “unfounded allegations,” stressing that when he was running the company’s day-to-day operations, he did not ship any jobs to China. Gateway did expand internationally in 1997 with sales, service or production facilities in Europe, Asia and North America, something in which Snyder says he was “disappointed.” He also plays up the fact that when he came back as Gateway’s interim CEO in 2006 after a tumultuous period, he brought back 130 technical support jobs to North America.
DiSano notes Snyder was on the board and there’s no record that he did anything to stop outsourcing. “He got caught in a lie,” the consultant says. “He could have just said, ‘This is what was right for Gateway, and as governor I’ll do what’s right for Michigan.’”
Snyder complains this line of attack is just more of the same from his frequent target, career politicians. “I hope people see through it. The more relevant matter is that we’ve lost a million jobs in Michigan. That’s what really counts.”
Trouble at Gateway had nothing to do with his departure, he said. The Snyders had become a little homesick and wanted to raise their three kids in Michigan. And Rick was also restless (“It was becoming a big company,” he says. “I like growing things.”).
So the family settled in Superior Township, a hillier suburb of Ann Arbor, where Snyder began raising $100 million for Avalon, the largest venture capital fund in Michigan history. In 2000 he founded Ardesta (“to ignite” in Latin). Snyder has relished investing in several Michigan companies and starting up others like Health Media, now part of Johnson & Johnson.
Although he won’t say how many hours a week he works, he acknowledges that it’s “fair to say I’m in the workaholic category.” But he credits Sue and the kids for giving his life balance (“I don’t golf because I’m terrible at it and I can’t justify being apart from my family,” he grins). His hobby of choice is actually water skiing, a skill perfected on the Snyders’ sojourns to Gun Lake, his favorite place since childhood.
Run, Rick, run
Over dinner one night, Sue told her husband those famous four words: We need to talk (“That causes your ears to perk up,” Snyder recalls). The couple was enjoying date night in January 2009 at the West End Grill in Ann Arbor, her favorite spot, when Sue urged him to run for governor.
“She could see I was going crazy,” he chuckles, “… over how messed up our state was.”
Snyder was reticent. Years ago, they struck a “family agreement” that he wouldn’t leave the private sector until Kelsey was out of high school. But Sue persuaded him to hold a series of family meetings because she was convinced that “I was the best person to turn the state around.” After the kids were on board, Snyder built his team and declared his candidacy in July 2009.
His personal wealth meant that he couldn’t be ignored, even as he languished in early polls. Though Snyder plunked down $2.6 million of his own cash last year, he’s the first to admit he doesn’t “have Dick DeVos money” and will limit his own spending. True to fashion, he has a “Plan A, Plan B, Plan C” in place for various contingencies.
Snyder promises to sweep into Lansing and shake it to its core, as only an outsider can. While current leaders may be smart, he complains they lack decisiveness critical in the business world.
“There’s lots of talk, but in terms of results, that’s missing,” he says. “And part of that is a lack of vision and a plan. But the other thing is, also, the decision-making style. Our political system is, I think, broken. People like to…take their positions and argue with one another. And to put it in perspective, I think there’s too much influence by special interests.”
Johnson says concerns about Snyder’s lack of experience are overblown, arguing that the Ardesta founder will have a top-notch cabinet.
“Nobody has a resume that fits ’em to be governor,” he says. “Anyone running doesn’t have the experience to be governor. You have to be prepared to be a leader; it will be a learning experience for any of them. Rick will be the best person at that time — he’ll change the way things are being done.”
Snyder has been highly critical of lawmakers for spending too much money, failing to get budgets done on time and creating an incomprehensible tax code. But the captain of industry has vowed to work with them once he’s in charge.
“My style is to go to someone and say, ‘These are the facts that I have. Now tell me where my facts may be off,’” Snyder says. “Again, you want to be thoughtful about this. So you lay out the facts, have a discussion and once you have an agreement on the facts, usually there’s a pretty clear set of common-sense things that need to be done.”
Of course, residing outside the Lansing bubble has a downside. Appearing in February on WKAR’s Off the Record, Snyder was asked the name of the Supreme Court chief justice. He replied that he couldn’t “pronounce her name right.” His spokesman called up host Tim Skubick 10 minutes after the show to let him know that his boss had just remembered that it was Marilyn Kelly.
Describing himself as being “politically focused” since high school, Snyder did Battle Creek phone banks for Gov. William Milliken in 1974 and attended the 1976 Republican National Convention in Kansas City as part of President Gerald Ford’s national youth group. Interestingly, that was known for being a clash between Ford’s moderate wing of the GOP and the emerging conservative power bloc led by Ronald Reagan. That fight continues today, although centrists have largely left or been forced from the party.
Snyder, who has garnered a reputation as a moderate with the left and right and generally fares better in polls’ general-election matchups than his GOP rivals, downplays the internecine tension. As for political heroes, the maverick businessman plays it safe, citing GOP former governors Milliken, George Romney and John Engler, who was “really good at getting stuff done.”
The former precinct delegate says he’s always been a loyal Republican, fostered by his Depression-era parents, although he’s squeamish about revealing his voting history, insisting he “respects the secret ballot.” When pressed, Snyder says he’s never voted in a Democratic primary, but won’t say whether he ever cast a ballot for Gov. Jennifer Granholm. (His staff answers that by playing up his campaign donations to DeVos, former Lt. Gov. Dick Posthumus and former President George W. Bush).
Johnson, the former speaker turned lobbyist with Fraser Consulting, attests that he is a “very conservative person.” Although Snyder stresses his right-wing bona fides in the primary, doubts with the base remain (“Yeah, I’m not sure where they get that from,” he shrugs).
“I don’t know where he stands,” says Wendy Day, head of the tea party group Common Sense in Government. “That’s my concern. There’s mixed information and a lack of information about him.”
For his part, Snyder says he’s anti-abortion, but he was a financial backer of Proposal 2 of 2008 lifting the ban on embryonic stem cell research — a big no-no with Right to Life. He’s against gay marriage, but supports civil unions, although he says it’s a non-issue thanks to a state constitutional amendment passed in 2004. And he’s a founding champion of the bipartisan Center for Michigan founded by fellow Ann Arborite Phil Power.
As a CEO, he’s on steadier ground with economic issues, but he dismisses the no-tax pledge as “kind of a gimmick.” He’s thumbed his nose at filling out questionnaires for special interests, even GOP kingmakers like the Michigan Chamber of Commerce.
While his Republican opponents have fallen over themselves to curry favor with tea party activists, Snyder has kept his distance. The ever-smiling businessman doesn’t exactly come off as an angry guy, although he insists he’s “mad” about what’s going on in Lansing. “It’s one of the things that drove me to run for office…It’s about how to channel that in a positive fashion,” he says.
At the same time, Snyder fashions himself as a consensus builder in community organizations he’s been active in, including the U-M College of Engineering Advisory Board and the Nature Conservancy board. He’s also co-chaired the Washtenaw County capital campaign and helped found the economic development group Ann Arbor SPARK, noting that being a Republican in Ann Arbor isn’t exactly a popular thing.
“This is part of the attitude I want to bring to Lansing…simply just don’t tell people, ‘I don’t want to talk to you because you might have a different view,’” he says. “I think it’s important to listen to people. And when I listen to people, I quite often make it clear, I’m going to listen to people with the other view.”
Of course, Snyder hasn’t endeared himself to all liberals. DiSano, who’s led the China charge against him, dismisses the business leader as “Dick DeVos without the charm.” The campaign clearly isn’t a fan of DiSano’s either, with staffers circulating to the press opposition research books on both he and his “Two Joes” podcast co-host, GOP consultant Joe Munem.
“It absolutely indicates that he’s not ready for prime time,” DiSano declares. “He’s used to the boardroom, not used to the thrust and parry of daily politics. He’s undeniably arrogant and his campaign pretends he’s somehow above this.”
Snyder dismisses the feud, shrugging, “If he stood in front of me, I don’t know that I’d recognize him.”
Mixing it up
Snyder and Cox have been fanning the flames as the gubernatorial primary race heats up in the final stretch.
At the Mackinac Conference debate, Cox jabbed the former Gateway CEO on outsourcing and insider trading. That prompted Snyder to retort that the AG was deflecting from his own scandals, presumably referencing Cox’s admitted extramarital affair and his investigation into an alleged Manoogian Mansion party by former Detroit Mayor and current inmate Kwame Kilpatrick.
“I’m not going to stand here and be lectured by you about ethics, morality and family values,” Snyder declared.
Cox responded in kind, and the vitriolic exchange — highly unusual for that venue — clashed with Snyder’s above-the-fray message, leaving the door open for Cox to snicker, “And that’s what you get from the non-career politician, folks.” But Snyder doesn’t regret the spat, insisting that he was being attacked (“I didn’t accuse anyone of anything,” he says. “I was saying I wasn’t going to take it.”).
Weeks before Mackinac, Snyder announced he was done with candidate debates. He’s instead focusing on town halls across the state, having done more than 20 so far. And, of course, there are his ubiquitous TV commercials (five and counting). But Snyder denies to a reporter that this is in keeping with his business background and an attempt to control the message.
“In some ways, the way you asked that sounds like a stereotype kind of someone who’s in control all the time,” he says with a scowl. “That’s not who I am. People misunderstand that. The funny one [that] I got early on is, ‘You’re a CEO-type, so you don’t get Lansing.’… As a practical matter, I used to be more pleasant about it, but I would point out that that’s a fairly ignorant statement and that I understand the real world.”
Snyder says he’s in the midst of a 10-year plan between the campaign and two terms as governor, although he laughs, “It might be two or less, depending on the elections.” He insists that with all the obstacles Michigan is facing, he won’t feel the tug to move on to other challenges before then, as he’s been known to do in his corporate career.
But he seems conscious of the toll public service might take. True to form, the man who had his life mapped out at the tender age of 16 has a plan for the next phase in his life.
Smiles Snyder, “Teaching again might look pretty good after this.”
Susan J. Demas, a regular columnist and contributor to Dome, is 2006 Knight Foundation Fellow in nonprofits journalism and a political analyst for Michigan Information & Research Service.