Image: Schwarzenegger
Actor Arnold Schwarzenegger was greeted by fans following the taping of "The Tonight Show" Wednesday after he said he would run for governor of California in the recall election scheduled for Oct. 7.
By
CNBC
updated 8/7/2003 11:20:39 AM ET 2003-08-07T15:20:39

Arnold Schwarzenegger has made it official — he’s running for governor of California. The governor’s job is much like a CEO’s — with voters as the shareholders. So what sort of business experience does Schwarzenegger have?

PERHAPS SCHWARZENEGGER’S best business experience has been running the “business of Arnold.”

You don’t come to this country with a thick accent and dubious acting skills, and turn yourself into a multi-millionaire without some sort of financial acumen. But does he have what it takes to be CEO of the world’s fifth-largest economy suffering from a $38 billion deficit?

Arnold Schwarzenegger was born in Austria but came to the U.S. in 1968, with only a few bucks in his pocket but plenty of muscle on his frame. He was a bodybuilder who put himself through business school, developing a fitness business after repeatedly winning top competitions. He began investing successfully in real estate, and was a millionaire long before he became a movie star.

Since going Hollywood, Schwarzenegger has kept his hand in real estate — with seemingly a sixth sense to developing and turning undervalued properties. His holdings stretch from chunks of Santa Monica, Calif. to a Denver entertainment center to a shopping mall in Columbus, Ohio. He owns a 747 which he leases to an airline. And he’s gotten into the restaurant business, opening Schatzi on Main Street in Santa Monica in the early 90s. His investment in Planet Hollywood did not go so well, and he pulled out in the late 1990s when the chain went into bankruptcy.

That experience may prove useful in dealing with California’s record $38 billion budget deficit. The government’s financial collapse is just the latest force to bedevil Californians, who in recent years have endured an energy crisis, the collapse of the dot-com economy and a federally mandated cutback in one of the state’s main water supplies. Residents now face the prospect of higher car taxes and college fees to close the state’s budget gap.

Incumbent Democratic Gov. Gray Davis is the first California governor to face a recall and would be only the second governor nationwide to be removed from office if the effort succeeds.

Those who have worked with The Terminator say he can be tough, especially if he doesn’t get his way. That may work in Hollywood, but Sacramento is not like walking the red carpet. Political reporters won’t fawn over you like paparazzi. And if he wins, the Democratic majority in the legislature will never forget he’s the Republican who terminated Gray Davis.

And this election will be like no other in memory. Hundreds of candidates have filed for a slot on the October ballot. Democratic Sen. Dianne Feinstein ruled out a run Wednesday, labeling the election “more and more like a carnival every day.” Political commentator Arianna Huffington declared she would run as an independent.

The ballot also is likely to include several conservative Republicans. U.S. Rep. Darrell Issa, who funded the recall, was a declared candidate until he dropped out on Wednesday, and state Sen. Tom McClintock filed papers Tuesday. Businessman Bill Simon, who lost to Davis in November, also is expected to run.

Schwarzenegger, 56 years old, announced his decision during a taping of “The Tonight Show with Jay Leno,” calling it the toughest he’s made since deciding to get a bikini wax in 1978.

“The politicians are fiddling, fumbling and failing,” he said. “The man that is failing the people more than anyone is Gray Davis. He is failing them terribly, and this is why he needs to be recalled and this is why I am going to run for governor.”

Schwarzenegger’s name recognition gives him and obvious edge. But his qualification may not be as obvious to California voters.

“This is someone who does not know too much about how state government operates,” said Howard Fine, a reporter at the Los Angeles Business Journal. “And if he were to be elected he would have to learn very, very quickly — within a matter of weeks.”

Make no mistake: Schwarzenegger is a star. And that means something, even in politics, though another star-turned-governor learned it doesn’t buy you much of a honeymoon.

“If I’m on a honeymoon, I’m sleeping alone,” former Gov. Ronald Reagan quipped early in his first term.

But Schwarzenegger does have some political experience, standing behind former Los Angeles mayor Richard Riordan during his gubernatorial campaign last year and successfully convincing Californians to pass a proposition to fund after-school activities.

He is also married to a member of the Kennedy clan, Maria Shriver. But he lacks the business and government experience that some past entertainers had. Before he was governor, Reagan ran the Screen Actors Guild and testified before Congress. And TV wrestler Jesse Ventura started out as a mayor in Minnesota before jumping to governor. (Arnold was at Ventura’s inauguration.)

But in a state tired of politicians, Schwarzenegger’s lack of executive experience could turn out to be one of his greatest assets. And jumping into a short race — one that spares him a brutal primary process — may be his shrewdest move ever.

The Associated Press contributed to this report.

© 2012 CNBC, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.95%
$30K home equity loan FICO 5.19%
$75K home equity loan FICO 4.58%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.40%
13.40%
Cash Back Cards 17.92%
17.91%
Rewards Cards 17.12%
17.11%
Source: Bankrate.com