Former eBay CEO Meg Whitman announced Tuesday that she's seeking the Republican nomination for California's governor to succeed another Republican, Gov. Arnold Schwarzenegger, who can't seek re-election because of the state's term limit law.
Whitman's decision comes as no surprise to a group of 75 who gathered in Pleasanton for a pre-announcement reception for the gubernatorial candidate to hear her views on how she'd manage the state government if elected. The meeting, an invitation-only get-together hosted by Toby Brink, chief executive of the Tri-Valley Business Council, was held in Joe Barone's backyard garden patio next to the restaurant he owns on Saint John Street.
Pleasanton was one of Whitman's final stops before announcing her candidacy at a rally in Fullerton in Southern California. She said her meetings here with civic and city leaders, as well as at the Business Council's forum, was among dozens of such occasions where "I've been going non-stop listening to people, sharing ideas and thinking hard about the problems Californians face," she said.
Whitman, who became a billionaire as the CEO of eBay, is also the only gubernatorial candidate so far who has brought her campaign to Pleasanton. The two other Republican hopefuls in the June 2010 primary race are Tom Campbell and Steve Poizner. State Insurance Commissioner Poizner is a Silicon Valley entrepreneur who became a multimillionaire by putting GPS into cell phones. Campbell was elected five times to the U.S. Congress, representing districts in the Silicon Valley. He also was elected to the State Senate and served as the state's finance director. Unlike his two competitors, Campbell has limited financial resources.
The two leading candidates on the Democratic side are San Francisco Mayor Gavin Newsom and State Attorney General Jerry Brown. Newsom will officially announce his candidacy at a rally Oct. 5 in East Los Angeles where former President Bill Clinton is expected to endorse him. Brown, who served as California's governor from 1975 to 1983, has yet to officially announce that he'll seek the post again, although he is expected to do so.
Whitman talked about her background at the Barone's meeting, saying she attended public schools while growing up on Long Island in New York. Accepted into Princeton University in 1973, she found that she was in only the fourth class where women had been enrolled, with 100 women in a class of 1,200 freshmen. She continued on to Harvard Business School, earning her master's in business administration in 1979. It was there that she met and later married Griff Harsh, a Harvard Medical School student. An aspiring neurosurgeon, the two moved to San Francisco when he accepted his residency work at UC San Francisco. He is now a neurosurgeon at Stanford University and the couple lives in Atherton, where they raised their two sons.
Whitman has spent the past 30 years in business, working for Procter & Gamble, Disney, Hasbro, Stride Rite, and FTD. For the last 10 years, she was president and the chief executive officer of eBay, which was a 30-employee, $4-million company when she took over and now has 15,000 employees with nearly $8 billion in revenues. She resigned March 31 in order to focus on her gubernatorial campaign.
"At eBay, I helped millions of people create small businesses in the marketplace," she told the Pleasanton group. "And, I became intimately familiar with the challenges small businesses face in this country. I came to understand that job creation is dependent on a fragile mix of circumstances, circumstances that are all too often disrupted by the intrusive hand of government."
"Government does not create wealth in this country," she added. "Inspired individuals create wealth. Helping those people succeed on eBay was the privilege of a lifetime."
She admitted that her latest career move may be her biggest gamble yet, but she's convinced that Californians are hungry for change, anxiously awaiting new leadership and that her experience and credentials will appeal to those wanting California to return to its rightful place of politically and fiscally sound leadership.
So about two years ago, Whitman began planning to run for governor. She consulted with her husband Griff and their sons because she knows how rough campaigns and media exposure can be on families as well as the candidate.
"I was concerned that this would not be an uplifting experience for them," Whitman said. "This is a tough business and I think it's very hard to have your wife criticized. It's even harder to have your mom criticized. So I wanted to make sure we were ready to be in this altogether, and we are."
But in the end, Whitman said her decision to move forward was that she refuses to let California fail.
"Make no mistake about it," she said at her Pleasanton gathering. "Our state is in the worst shape I've seen in the last 30 years that I have lived here. We have a 12.2 percent unemployment rate; we are losing jobs, not so much to India and China, but to Colorado, Nevada, Utah, Texas and Arizona. And it's easy to know why. It's easier to do business there, taxes are lower, regulations are more streamlined, those states want businesses to succeed."
More than 2.2 million Californians are out of work," she said. "Think about what that means. Think about the number of heartbreaking conversations that have taken place: Employers telling long-time employees they must go, husbands telling wives that they can't afford their homes and parents telling children their college dreams are over."
Adding to these concerns, Whitman said the state's infrastructure hasn't kept pace with population growth, with rapid transit, highway and water delivery systems lagging behind.
"We also have a kindergarten through 12th grade education system that we must once and for all turn around," she added. "What is tragic about this, and you probably know this, is that back in 1956 we had the No. 1 public school system in America. People moved to California to put their children in this public school system. But last year we were rated 48th out of 50 states.
"So over the last 50 years we have effectively lost one rating point every single year," she noted. "We have to turn this around. It is not acceptable to deny the vast majority of our children an opportunity at the California dream and ultimately the American dream."
Whitman continued: "We also have a state that is effectively bankrupt with revenues right now running about $1 billion a month below forecasts. So we have to fundamentally change the financing architecture that runs the state. So that is why I decided to run and here is what I want to do."
As governor, Whitman said she would focus on job creation, cutting state spending and fixing the state's "broken" education system.
First and foremost among Whitman's priorities are jobs, which will require fixing the fundamental economic engine that drives California businesses and keeps them in the state. Thirty years ago, companies wanted to do business in California. That's changed, Whitman pointed out, citing a recent Forbes magazine article rating California 50th out of 50 states as the best places to do business.
"In the last 30 years, Arizona, Nevada, Colorado and Utah have stepped up and they are competing for our jobs," she said. "I know. When I was CEO of eBay, I frequently got calls from governors around the country trying to get me to move business to their states.
"If I'm elected, you can bet I'll be burning up the phone lines to businesses in Nevada, Utah, Colorado, Texas, and beyond," she added. "As my husband would say, it's not brain surgery; it's economics."
Whitman's second priority would be to balance the budget and cut state spending. She said the state doesn't have a revenue problem, it has a spending problem "of epic proportion."
"Two facts you should know," she said, "for the last 10 years California state spending has increased by 80 percent. Has state aid gotten better? Have the school become 80 percent better? Do we have 80 percent more people? There's a tremendous opportunity to run this state much more efficiently."
She said that while others seeking the governor's post say there are only two ways out of the budget deficit mess, she suggests a third.
"It's called getting the government under control," she explained. "There are 357,000 people who work for the state, up from 313,000 just five years ago, although revenues in the state are about where they were five years ago. I will work to get the number of people who work for this state back down to that same level."
Whitman said her third priority as governor will be to change "the trajectory of our schools."
"While we have some very fine public schools here in Pleasanton and in other parts of the state, the vast majority of schools are not doing the job. Otherwise we would not be rated 48th out of 50 states," she said.
"When I started on this journey, a number of people came to me and said that California is too big, too diverse, with too many languages spoken to excel in education," she continued. "But other big and diverse states have met that challenge and are doing a better job."
She said Jeb Bush, when he was governor of Florida, changed that state's formula 11 years ago to start grading every single public school, and then state educators made those grades public. He also increased the number of charter schools dramatically. These are regular public schools but they operate with a lot more autonomy with teachers and principals better able to deal independently on academic and student issues affecting their schools.
"He (Jeb Bush) created a system to pay teachers more for performance," Whitman said. "The results have been dramatic. Florida has moved up in the ratings scheme in last 10 years about 10 points where California has gone from 38th to 48th. So this is not demography or destiny, it is a different approach."
Interrupted by applause numerous times, Whitman was praised by those attending the Pleasanton meeting.
"I believe that Meg Whitman has a clear vision of how to create jobs in California and a real understanding of how California can regain its competitive advantage as a market leader," said Judy Lloyd, president of Altamont Strategies.
"I can't imagine an individual more suited to take on the challenging public policy and budget issues before our state," Lloyd added. "She has an advantage over her competitors -- Democrats and Republicans -- because she understands business and has spent the majority of her career outside of Sacramento. Businesses will thrive with Meg Whitman as our governor."