Transcript of John Gaines Speech to the Farm Managers
Updated: Thursday, January 4, 2001 2:24 PM
Posted: Thursday, January 4, 2001 2:06 PM
Thoroughbred breeder John Gaines spoke to the Kentucky Thoroughbred Farm Managers Club on Jan. 2. This is part I of the transcript of that speech.
Many thanks, (Farm Managers Club) President (Steve) Johnson, for your extremely kind and generous remarks. As my old friend, the renowned impresario, David A. "Sonny" Werblin, used to say whenever he was recognized, "I don't deserve the accolades, but I'll take them anyway."
I can only assume you invited me to speak to you today because of the recent comments that I made concerning the state of the industry on receiving the Clay Puett Award at the Annual Racing Symposium at the University of Arizona where I urged Frank Stronach to join the Board of directors of the National Thoroughbred Racing Association as being in the best interest of Mr. Stronach, in the best interest of the NTRA, and in the best interest of the industry.
Let me be crystal clear about one thing, the NTRA, Frank Stronach's Magna Entertainment, TVG, and the defection of race tracks are not the fundamental issues, and adding democracy and entrepreneurship to the mix only masks dealing with the real problem: how does Thoroughbred breeding and racing best survive, much less prosper, in the explosive, competitive, and unforgiving environment of modern life in the modern world?
As I see it, the world according to Frank Stronach is essentially the world according to Ross Perot. The similarities between the two men in thought, word, and deed are striking.
* Stronach was born and raised in a small Austrian village.
* Perot was born and raised in Texarkana, Texas, in a small town near the Arkansas border
* While Stronach was washing dishes in a hospital at less than subsistent wages and working as a machinist, Perot was breaking horses, roofing barns, stringing barbwire, and selling garden seeds.
* After being discharged from the military, Perot became a star salesman for IBM.
* At the same time, Stronach opened his own tool and die business and acquired his first auto parts contract – 300,000 sun visor brackets from General Motors.
* After fulfilling his IBM sales quota for the whole year in the first 19 days of January, Perot went to his supervisors and presented them with an innovative program for the computer systems that was summarily rejected by the company.
So, Perot, disgusted with this rejection, left IBM, borrowed $10,000 from his wife's savings, and founded the Electronic Data Systems Corporation (EDS) in Dallas, and 20 years later, sold EDS to General Motors for $2.4 billion.
* At the same time, Stronach was developing Magna International into a company with $5.7 billion in revenues building parts for other manufacturers' cars. In 1990, Magna's sales were$1.3 billion; and in 2002, sales are projected to exceed $7.2 billion.
* Two years after Perot sold EDS to General Motors, he launched a new company, Perot Systems.
* Stronach similarly launched a new company; Magna Entertainment, that currently owns 7 race tracks, 600 thoroughbred horses, 3 farms, a training center, 4 off-track betting facilities, and an interest in the Racing Network, an account wagering operation. A conservative estimate of his investment in Thoroughbred Breeding and Racing would exceed $500 million.
However, both Perot and Stronach have experienced significant failures.
* Unable to accommodate himself to working with the New York stock exchange, Perot's investment in the brokerage firm of Dupont, Glone, Forgun, filed for Chapter 11 Bankruptcy,losing over $200 million of his investment.
* I understand that Stronach's $500 million hotel, track, and theme park in rural Austria, south of Vienna, have been abandoned, and his investment in Vista
, a magazine devoted to luxury living and travel, together with his up-scale restaurant named after his daughter, Belinda, also failed.
* Perot, as everyone knows, was a third-party candidate for president and failed to carry a single state.
* Stronach also entered the political arena and ran for Premier of Ontario, Canada, with similar disastrous results.Continued. . . .
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