Jerome “Jerry” York, a pioneering and prophetic finance chief who served as CFO of IBM and Chrysler, died on Thursday after being hospitalized in Pontiac, Michigan, with a cerebral hemorrhage. He was 71.
York was one of a handful of CFOs “who first put the title on the map,” says Julia Homer, vice president and chief content officer of CFO and founder of the magazine. “When he first spoke at a CFO conference years ago, attendees asked him for his autograph.”
Trained as an engineer, York said he didn’t know he wanted to be in finance until 1980, after he had moved from Ford Motor to Chrysler. He went on to become CFO of the automaker from 1990 to 1993. York then served as IBM’s finance chief from 1993 to 1995. Summing up his feelings about his chosen profession, he said during an interview at the 2008 CFO Rising conference: “I like finance very much. After all, what is a budget? It is simply a dollarized model of what’s going on in the business. Every CFO should be striving to make that model better.”
York was most recently a key adviser to billionaire investor Kirk Kerkorian and chief executive officer of Harwinton Capital, a private-equity company he founded in 2000. He was proven of late to be remarkably prescient about the economy. In March 2008, nearly six months before the fall of Lehman Brothers, he told CFO: “It’s going to be a very bad recession, perhaps the worst I’ve seen in the 46 years I’ve been working.”
York observed that a “perfect storm” of economic calamity was looming, including rising energy and commodity prices, credit losses in which “no one knows where the bottom is,” and a housing-market crisis. “We have too many sectors going south all at once,” he said. What’s more, York couldn’t find a silver lining: “I frankly don’t see many positive signs right now; we are looking at a really nasty economic situation.”
Anticipating the current uproar about exorbitant executive pay, York said then that he had concerns about the gap between bonuses and share-price performance, “particularly share prices in the context of the peer group. I think this will be an area to delve into.”
In the context of what he saw as an approaching recession, York predicted that corporate boards would increasingly rely on CFOs to help their companies get through the crisis. “Stay on top of cash and plan for debt maturities,” he counseled finance chiefs, noting what he thought should be their biggest concern over the next year: “It’s just cash, cash, cash.”
When it came to economic crises, York knew whereof he spoke, having worked under Chrysler CEO Lee Iacocca during the automaker’s solvency crisis in the early 1980s. Similarly, York joined CEO Louis Gerstner at IBM during hard times at the computer giant. “When I joined IBM, I was not at all sure I was making a great move,” recalled York. But the experience gave him the chance to work with Gerstner, who, along with Jack Welch of General Electric, was among the business leaders he admired most.
York, a forthright critic of practices he saw damaging to finance, quoted Gerstner in explaining the approach he thought best in managing people: “I want teamwork, but I don’t want teamwork for the sake of teamwork; I want teamwork for the sake of results. Some companies that move to less autocratic approaches can get tripped up on that.”
York was born in Memphis, Tennessee, in 1938. He graduated from the U.S. Military Academy and received an MS from the Massachusetts Institute of Technology and an MBA from the University of Michigan.