Governor Snyder, 'one tough nerd,' faces Michigan's woes

DETROIT Tue May 8, 2012 4:59pm IST

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DETROIT (Reuters) - Rick Snyder is no stranger to being kicked around.

"I was bullied because I was a nerd," Michigan's Republican governor recently told reporters. "I got pushed around, shoved around in high school and actually in college."

The computer executive-turned-politician famously dubbed himself "one tough nerd" as he campaigned in 2010 for governor, his first public office. Snyder will need plenty of toughness now as he faces the Midwestern state's difficult problems, including reviving its recession-hit economy and cleaning up a financial mess in Detroit.

Snyder, 53, is something of a rising star in the U.S. Republican Party. He's even been mentioned in media speculation about possible running mates for presumptive Republican presidential nominee Mitt Romney.

But he is a moderate in a staunchly conservative party, and has shunned the kind of fights with organized labor launched by some fellow Midwestern Republican governors.

The native of Battle Creek, Michigan spent most of his life in the private sector, running the Gateway computer hardware company and as a venture capitalist, before entering politics.

"I'm an accountant," he said at a town hall-style meeting in Detroit. "I'm not the most exciting guy."

One of his toughest challenges is fixing the finances of Detroit, the state's biggest city and a place some Americans view as synonymous with urban decay. Many previous efforts to resolve Detroit's problems have failed.

The issue pulls the governor, who is white, into racial politics. About 85 percent of Detroit's population is black.

During a heated public meeting in March, a black community activist, Malik Shabazz, called the state's plans for Detroit "white supremacy" and vowed, "Before we let you take over our city, we will burn it down first."

Detroit's unemployment and school dropout rates are among America's worst. Its population fell 25 percent between 2000 and 2010. The mayor says basic services such as lighting and buses are alarmingly inadequate. The city has posted deficits seven straight years.

The city even began closing police stations at night to save money even as Detroit's murder rate remained among the nation's highest.

Snyder got deeply involved in the Detroit situation in December when it became clear the city was only a few months from running out of cash. In April, he instituted a state-mandated financial restructuring agreement.

"We don't need more plans," Snyder has said. "We've had plans for 40 or 50 years in Detroit. We need to get things done."

Success in Detroit means ending budget deficits, attracting business investment and stemming population decline, Snyder said in an interview. "I don't dwell on my legacy," he added. "This is about whether I do what I said I was going to do."

Opponents say Snyder's takeovers of troubled Michigan municipalities and school districts and appointments of emergency managers have been aimed primarily at places with large black populations.

His critics also say steps taken by Snyder are anti-union because emergency managers and state-mandated restructuring plans typically involve cutting labor costs and curtailing workers' bargaining rights.

Not since Mayor Coleman Young, who was a black Democrat, and Governor William Milliken, a white Republican, collaborated in the 1970s and 1980s has there been a general agreement that Detroit and the state capital Lansing could work together.

Key city leaders have embraced Snyder's attempt at a new era of collaboration - including an initially reluctant Detroit Mayor Dave Bing, a former star player for the Detroit Pistons of the National Basketball Association.

The previous mayor Kwame Kilpatrick, who was ousted and imprisoned in a sex scandal, and former Michigan Governor Jennifer Granholm, both Democrats, had failed to get the job done.

"Our backs are against the wall," said Gary Brown, a former cop who serves on Detroit's nine-member, all-black city council. "Now we've got someone with a hammer in the state as a partner that will force us to stop spending more than we bring in."

"If he pulls this off, he'll probably be viewed by Detroiters as was Governor Milliken - favorably," Brown said.

RUNNING WITH ROMNEY?

Snyder's name has surfaced in talk about possible vice presidential choices for Romney, who aims to beat President Barack Obama, a Democrat, in the November 6 election. Snyder has said he is happy with his current job and "focused on Michigan."

Like Snyder, Romney has a background in business and is a former venture capitalist. Snyder backed Romney ahead of the pivotal Michigan Republican presidential primary in February that Romney won in a close battle with rival Rick Santorum.

Winning Michigan would offer quite a boost for Romney against Obama, who won the state in 2008. No Republican presidential candidate has carried the state since 1988.

Michigan long has been the heart of the American auto industry. Romney, whose father was a governor of Michigan, opposed Obama's 2009 bailout of General Motors (GM.N) and Chrysler (FIA.MI).

"The fact that the auto industry is turning around and the economy is much better (in Michigan) favors Obama, and that is the message that is penetrating right now," said Bill Ballenger, a former Republican Michigan state legislator and veteran political observer.

Snyder last year signed a measure replacing the state's business tax with a 6 percent corporate income tax levied only on companies that typically issue stock. The change is designed to reduce business taxes by more than $1.5 billion a year.

For Snyder, picking a fight to create controversy is not on the agenda. He has not plunged into the "right-to-work" battles embraced by other Republican governors including Wisconsin's Scott Walker and Indiana's Mitch Daniels.

The right-to-work issue centers on whether certain workers should be compelled to join a union and pay dues. In Republican-run states, some leaders have worked to eliminate this requirement. Unions typically support Democrats.

"He said, 'I'm not interested in that,'" Michael Bishop, a former Republican state legislator who was Michigan's Senate majority leader at the time of the 2010 gubernatorial election, said of Snyder's response to the right-to-work debate.

"That angered the Tea Party but placated people who traditionally would be opponents," added Bishop, referring to the Tea Party conservative U.S. political movement. Bishop said Snyder's strategy is simple: "defuse, defuse, defuse."

Snyder's approach has sometimes frustrated even close allies like Michigan House of Representatives Speaker Jase Bolger. "It was frustrating that he didn't fight back," Bolger said of Snyder's unwillingness to take on critics who say state Republicans are unfairly taking over Detroit. "I thought our positions needed to be defended. But he didn't engage in that."

FOLLOWING THE PLAYBOOK

Most of Snyder's life has gone according to a playbook he composed decades ago, including having a law degree and MBA by age 23 and by 37 becoming president of Gateway, which was later acquired by Taiwan-based Acer Inc (2353.TW).

He developed a reputation in business as a builder, not a turnaround artist or corporate hatchet man.

He was instrumental in expanding Gateway from a 1,000-person firm co-founded by billionaire Ted Waitt and headquartered in South Dakota to a 10,000-employee computer giant housed in California. He resigned as president in 1997 to found a venture capital firm, but returned in 2005 to serve as chairman as the company was losing market share, closing stores and retreating from international markets.

"This is a guy who got along with the board, who got along with employees and who got along with Ted Waitt as the stock went from $80 to a buck," said Scott Galloway, a well-known activist investor and marketing professor at New York University who was on Gateway's board at the time. "Typically, no one gets along when that is taking place."

Galloway described Snyder as "Donald Trump in reverse" due to Snyder's ability to wring results through consensus building and to avoid the spotlight.

(Editing by Will Dunham)

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