The Unheard Story Of Apple's Former CEO Who Saved The iPhone Maker From Crisis

In its 47-year-long history, tech giant Apple has seen seven people head the company as its CEO across the decades. Michael Scott (1977–1981), Mike Markkula (1981–1983), John Sculley (1983–1993), Michael Spindler (1993–1996),?Gil Amelio (1996–1997),?Steve Jobs (1997-2011) and?Tim Cook (2011-Present).

While Tim Cook and Steve Jobs are among the most popular names in Apple's history, the story of the tech giant's shortest-tenured CEO who saved the company from a crisis, is an unheard one.

Who Is Gil Amelio?

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Gilbert Amelio served as Apple's fifth CEO for just about a year (from 1996-1997), making him the shortest-tenured CEO of the world's first $3 trillion market cap company.?

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When Crisis-Hit Apple Was Close To Being Sold

The board meeting at which Amelio was named CEO, January 31, 1996, was actually called not to hire a new CEO but to sell the company. At that time, it seemed Apple’s only chance to survive in any form.

Indeed, Apple's then-CEO Michael Spindler had told his board almost a year earlier that a sale was Apple’s only hope to survive. He had spent the year since seeking someone, anyone, who would pay more than a fire sale price, all the while digging Apple’s hole deeper by the day.? He came to this New York meeting pleading for a sale “on any terms Sun offered.”? The terms were not good, as per Forbes.

But why?? It's the years of mismanagement. At that time, Apple the technology pioneer had given way to Apple the channel-stuffer:? inflating sales figures by forcing far more products – increasingly low-margin, low-quality products – through the distribution channel than could possibly be purchased by the public.? Massive returns had become the norm, forecasting had completely broken down, no new operating system had been released in years, and top executives had ceased to understand their own product line or marketplace.

These chickens came home to roost. By October 1995, with losses mounting, the then CEO Spindler shocked the board, informing them that of $6 billion in products already “sold,” Apple would have to write off $1 billion worth, returned and basically worthless. And by January 1996, Apple was not just haemorrhaging money:? it had less than three month’s cash in the bank.

The ship was going down. Then came Gilbert Amelio.

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How Apple's Shortest-Tenured CEO Saved It

Despite all this, the board rejected Spindler’s call to pull the plug on one of history’s greatest companies and decided to give things one last try.?It replaced Spindler with Gil Amelio, assigning him a task perhaps appropriate for John McClane or Ethan Hunt.? Or possibly the defenders of the Alamo.

He was the logical choice. A longtime Apple fan and recent board member, Amelio was a turnaround legend, having saved a key division at Rockwell and then brought National Semiconductor back to life.? What he lacked in dazzling stage presence he more than made up for in the experience and discipline Apple desperately needed.

Solving the cash crisis came first. Almost immediately, he succeeded where Spindler had failed in convincing a consortium of Japanese banks to extend Apple’s loans by six months:? breathing room, as per the report.

Two months later, with Goldman Sachs, he pulled off a first-of-its-kind financing deal that put $661 million in Apple’s coffers. Jobs himself later told Amelio: “I certainly couldn’t have done that and I don’t know of anyone else who could have, other than you. It was one of the more brilliant business maneuvers I’ve ever seen.”

What Hard Decisions Amelio Had To Take?

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Apple was thus saved, at least for the time being.? But serious changes were needed, fast. And the then CEO Amelio provided them.? Painfully, he cut $250 million in expenses per quarter and 3,000 workers, reorganizing the dysfunctional company into fighting form.? He eliminated Apple’s countless fiefdoms, reasserted the CEO’s role in product development, streamlined an incomprehensible product line, and crucially, reestablished proper quality assurance.

But he also began laying the foundation for the future.? First, he laid out a five-year development plan, which included the iMac and which Jobs would later follow in almost flawless detail.? He killed Copland, Apple’s in-house effort to create a modern OS, long since stymied. Then he bought NeXTstep, the advanced operating system which became the basis of OS X.

With it, he brought Steve Jobs back to Apple, a gutsy, dangerous call that ended in a boardroom coup, as per the report.

Much of this detail was lost in the ensuing media frenzy.? But the facts remain.? As one senior Apple veteran put it, “Steve was the reconstructive surgeon…who made the patient healthy and pretty again, but Amelio was the guy in the MASH tent near enemy lines who kept them alive long enough to get there.”

So Gil Amelio saved Apple. And saying so takes nothing from the greatness of Steve Jobs. Both played their respective key roles in making Apple what it is today.

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