Jerome York dies at 71; financial wizard was credited with turning around Chrysler and IBM
Jerome York, an Apple Inc. board member and a financial wizard credited with turning around Chrysler and IBM, died Thursday of a brain aneurysm. He was 71.
He died at a Pontiac, Mich., hospital where he was taken Tuesday night.
York, who led an investigation of Apple’s stock option practices, was a pillar of financial and business expertise, Apple Inc. Chief Executive Steve Jobs said. Jobs said York joined Apple’s board in 1997 when most people doubted the company’s future. Since then, the company has launched such highly successful products as the iPhone and the iPod.
“It’s been a privilege to know and work with Jerry, and I’m going to miss him a lot,” Jobs said in a statement.
York worked for all three Detroit automakers starting in the 1960s. More recently, he advised investor Kirk Kerkorian in a failed takeover attempt of Chrysler and in efforts to reform General Motors Co. In 2006, three years before GM went into bankruptcy protection, York warned the company that its business model was seriously flawed.
As Chrysler’s chief financial officer from 1990 to 1993, York helped restore the No. 3 automaker to profitability with cost cuts and asset sales and was considered a potential successor to then-Chairman Lee Iacocca.
Despite the cuts, York kept investing in new vehicle development, said Bud Liebler, vice president of marketing and public relations at Chrysler from 1980 to 2001. At one point, York ran the Dodge brand, where he upgraded the engine of the Ram truck to make it more powerful and gave the truck more aggressive looks, a wildly popular move.
In a statement Thursday, Iacocca said York “was an integral part of Chrysler’s success, the very best in finance. I am grateful for all he did and proud to say he was not only on my team but my friend.”
York joined Chrysler in 1979 and left in 1993 to become IBM Corp.'s chief financial officer. For two years, he oversaw IBM’s brutal downsizing and transformation from a hardware company on the brink of collapse to a software and services powerhouse. IBM shed more than 150,000 workers in the 1990s and racked up nearly $16 billion in losses over five years.
Louis Gerstner, retired chief executive of IBM, said York “demanded deep, insightful analysis of business issues before decisions were made.”
York left IBM in 1995 to become vice chairman of Tracinda Corp., Kerkorian’s investment company. The billionaire teamed with Iacocca and made an offer to buy Chrysler that year, but later retreated.
After Kerkorian bought up GM shares in 2006, York was named to that automaker’s board. York supported an alliance with Nissan Motor Co. and Renault SA and wanted to pare down GM’s stable of brands. He resigned shortly after GM ended talks with Renault and Nissan, citing “grave reservations concerning the ability of the company’s current business model to successfully compete” with Asian automakers.
Three years later, GM entered bankruptcy protection and shed four of its eight brands.
Kerkorian called York “a unique individual with boundless courage, charisma and intellect and a deep appreciation of the automotive industry.”
York also served as chairman and chief executive of Micro Warehouse Inc., a computer retailer, for three years. Besides Apple, he was a board member at Tyco International Ltd. and auto supplier Dana Holding Corp.
At Apple, York and fellow board member Al Gore led an investigation in 2006 of the company’s practice of retroactively setting a stock option’s exercise price to a low point to boost profits when the options are cashed in. Apple acknowledged some backdating between 1997 and 2002, and restated several years’ worth of financial statements, which York’s committee said corrected the matter.
The Securities and Exchange Commission and federal prosecutors also launched separate investigations. The SEC’s probe ended with settlements with two high-level executives, and the criminal investigation was closed with no indictments.
But York’s part in the investigation was not without conflict. As a board member, he made decisions about executive compensation, including options grants.
York was born in Memphis in 1938 and graduated from the U.S. Military Academy at West Point. He earned a master’s of science degree from the Massachusetts Institute of Technology and a master’s in business administration from the University of Michigan, where there is an endowed professorship in his name.
York is survived by his wife, Eilene, and four children.
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