Amelio, Gil

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Amelio, Gil

(1943-)

Overview

Gil Amelio took over a struggling Apple Computer Corporation in 1996 as president and CEO, and helmed the sinking ship for 17 months before being unceremoniously fired. Amelio, an expert in semiconductor technology and a respected Silicon Valley executive, later wrote a book about his experience at the computer industry's most legendarily rebellious innovator.

Personal Life

Amelio was born in New York City in 1943. He attended the Georgia Institute of Technology throughout the 1960s, earning a Bachelor of Science degree in 1965, a Master of Science two years later, and a Ph.D. in solid-state physics in 1968. A Republican and a Roman Catholic, he is married to Glenda Amelio, with whom he has two children, Anthony and Tracy; he is also parent to two stepchildren. Though Amelio does indulge in a love of aviation—he enjoys flying his own Piper Cheyenne—he is described as being far from the classic charismatic, media-savvy computer industry executive.

Career Details

In 1962, when he was still in college at Georgia Tech, Amelio cofounded an Atlanta software company, Information Sciences. After earning his advanced degrees, he was hired in 1968 by Bell Telephone Laboratories in New Jersey in its Device Development division. He remained there for three years before heading west to Mountain View, California, to work for Fairchild Camera and Instrument. Fairchild was the first microchip producer in Silicon Valley, and Amelio became general manager of its microprocessor division. He stayed there until 1983, when he was wooed by Rockwell International to be president of its semiconductor division. When Rockwell merged that division with its communications sector in 1988, he was made president of the new group.

Amelio joined National Semiconductor Corp., located in the heart of Silicon Valley in Santa Clara, California, as its president and CEO in 1991. The company was in perilous health, and Amelio was taking over from the retiring company founder. National Semiconductor had performed poorly in recent years, suffering huge financial losses as a result of increased competition in the semiconductor field from Japan. Amelio's strategy was to refocus on improving analog chips for specific industries, and to increase market share. He was also credited with injecting the ailing company with a much needed morale boost. By 1993 the company was profitable again, and he was elevated to the position of chair of its board of directors in 1995. A book published that same year, Profit from Experience, chronicled his experiences there.

Amelio had also sat on the board of Apple Computer since 1994. The company, developer of the revered Macintosh personal computer, had begun to flounder in recent years after a string of notable flops, heavy competition from Microsoft and its Windows operating system, and a corporate culture that was legendary for its nonconformity. Amelio was tapped early in 1996 to take over the reins of Apple, which was rumored to possibly even be on the auction block.

Apple had witnessed phenomenal growth in the 1970s and '80s with its innovative products and enjoyed a cult of dedicated, near-fanatical devotees as its user base. When Amelio entered the executive offices of the Cupertino, California company, however, its staff was demoralized, it was bleeding money every quarter, sales were dismal, and its stock performance was very poor. Its first-quarter losses for 1996 were $740 million. Just a few months after Amelio came on board, Apple shares descended to a ten-year low. Furthermore, Apple had only enough cash on hand to see it through two months, which is usually a predictor of certain financial doom for a company.

Amelio was hailed as Apple's savior, partly based on his record in turning around National Semiconductor. He was given a five-year contract that paid almost $1 million annually, plus stock options and bonus stock if Apple's performance improved. He reorganized the company twice, and laid off 2,800 employees in an effort to stop the bleeding. But Apple's share in the personal computer market continued to slip, and hovered below five percent (Microsoft and Windows enjoyed the rest of that market). He engineered a comeback of sorts for fired Apple founder Steve Jobs, who had gone on to launch a new Silicon Valley company, NeXT Software.

Amelio was fired from Apple in early July of 1997, after just seventeen months on the job. The stock had just sunk to an eleven-year low, and the board was dissatisfied. Ellen Hancock, whom he had brought on board to become Apple's director of advanced technology, departed with him. Jobs then became CEO. Ironically, it seemed to cost Apple more to get rid of Amelio than to keep him: his severance package was estimated at about $7.5 million in both salary (the remaining years on his contract) plus stock. He went on to become a partner at the Parkside Group, LLC, a San Francisco investment firm, and coauthored a book on his experiences at Apple entitled, On the Firing Line: My 500 Days at Apple, with William L. Simon.

Social and Economic Impact

Though Amelio is known as a savvy corporate leader for his business sense, his scientific background is also noteworthy. His name is on sixteen patents, and he is the coinventor of the first charge-coupled image sensor, which greatly aided the development of the consumer camcorder.

Chronology: Gil Amelio

1943: Born.

1962: Cofounds Atlanta software company.

1969: Earned a Ph.D. in physics.

1971: Began working in the semiconductor industry.

1983: Became president of Rockwell International.

1991: Named CEO of National Semiconductor Corp.

1995: Elected chair of National Semiconductor Corp.

1996: Named CEO of Apple Computer.

1997: Fired from Apple.

1998: Co-authored On the Firing Line: My 500 Days at Apple.

Some industry watchers theorize that Amelio was fighting a losing battle in attempting to rescue Apple, given its nonconformist corporate culture that viewed authority and standard business practices with a healthy dose of skepticism. Amelio seconded this idea in a speech before the Commonwealth Club in San Francisco. "Around Apple they still believe that no one ever got a really great idea while wearing a suit and tie," he joked a few months after his departure. The company then seemed in even more dire straits than before: after he was fired, Apple nixed launch plans for Rhapsody, a new operating system, after the company had spent over $400 million to buy it from Jobs and NeXT. Others believe that Apple would have been sold, possibly to Sun Microsystems, had Amelio not stepped in and exerted some control over the balance sheet when he did.

Amelio has called Apple "a contrary organization," and later likened his tenure there to overseeing a group of teenagers who would willfully disobey. But he also said that accepting the much publicized salary offer in the first place, which the Apple board of directors had sweetened to lure him from National Semiconductor, was a decided mistake, simply because of the hostile press it brought; many wondered why Apple was paying a hefty six-digit figure when the company was suffering such losses. There was resentment from inside the company, among stockholders, and in the press. "You don't expect your religious leaders to be making big bucks, and I was leading a religion," Amelio later told ComputerWorld's Joseph E. Maglitta.

Amelio did, however, set Apple on the right track, primarily by lowering its "break-even point," or point at which a company stops losing money and begins to operate at a profit. He is also credited with improving the quality of Apple products, a factor that helped win back some loyalists. In retrospect, Amelio saw his tenure as a positive one overall and—as a Macintosh devotee and Apple shareholder himself—was happy that the company did not end on the auction block. Under his leadership, Apple introduced several new products, especially in the first part of 1997, and Amelio notes that unlike other Apple launches, all were released on time.

The appearance of Steve Jobs back at Apple headquarters was also a significant event. Jobs is a legendary figure in Silicon Valley, and his return in December of 1996 gave the devoted Apple base of users, employees, and stockholders great hope for the company's viability. With Jobs, Amelio devised a blueprint for Apple's future, a plan that is still in place.