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KERKORIAN'S NOSE FOR DEAL KNOWS ONE MOTIVE: PROFIT: AIDE YORK LIKELY TURNED HIM ON TO DETROIT CARMAKERS
by John Gallagher
Detroit Free Press (Michigan)
April 29, 2008 Tuesday
Apr. 29--For Kirk Kerkorian, the deal always comes first.
As the reclusive Las Vegas billionaire makes yet another run at a
Detroit automaker, his biography and his record suggest he plunges
in wherever he spots a potential score, as he apparently sees at Ford
Motor Co.
"Kirk drives into weakness," says Gerald Meyers, former chairman
of American Motors and a business professor at University of
Michigan. "When he sees weakness, he sees dollar signs."
David Cole, chairman of the Center for Automotive Research in Ann
Arbor, agreed. Ford's low stock price and its promise of a recovery
have enticed Kerkorian into one more dance with Detroit metal.
"I think what he senses is this is an inexpensive asset that's on
the verge of a turnaround and there's going to be a lot more value
at Ford not too far down the road," Cole said.
But few if any observers think Kerkorian is interested in cars and
trucks beyond what they mean for Ford's stock price.
"Kerkorian's a money man," Meyers said. "He can't stand standing on
the sidelines when there's a possibility of making a killing."
He has made scores aplenty over the past half-century. Forbes magazine
estimates Kerkorian's fortune at $18 billion, ranking him seventh on
Forbes' list of richest Americans.
Perhaps one reason for Kerkorian's continuing interest in Detroit can
be summed up in two words: Jerry York, Kerkorian's longtime aide and
expert on the automotive industry. He's a man who can spot value in
an undervalued automaker and bring it to his boss' attention.
"I don't think he'd be at all involved in Detroit if he didn't have
York," Meyers said.
Certainly Kerkorian's latest bid for a hefty stake in an American
automaker has some people asking why the 90-year-old Las Vegas
dealmaker cares so much about the domestic auto industry. Kerkorian,
after all, already invested heavily in Chrysler and General Motors.
Because the reclusive billionaire rarely does interviews, his past
will have to provide any clues.
That personal history shows strong evidence that once he's intrigued
by an idea, Kerkorian pursues it relentlessly.
The son of Armenian immigrants who ran a produce business in Fresno,
Calif., Kerkorian quit school as a teenager to go to work. He spent
a year in the Depression-era Civilian Conservation Corps, served
as a military pilot during World War II and after the war ran a
small air-charter service to ferry gamblers between Los Angeles and
Las Vegas.
Kerkorian paid $60,000 for the charter service in 1947, when he was
30. In 1968, he sold it to Trans-america Corp. for a little more
than $100 million. It was his first fortune, and banker friend Walter
Sharp said the windfall transformed Kerkorian.
"Kirk realized then that everything was in the timing," Sharp said
in 1995. "He became fascinated with the idea of making deals."
For a man so intensely private, he showed a remarkable taste for
splashy investments, mostly in Las Vegas. With the proceeds of his
airline sale, he acquired the Flamingo Hotel there in 1967. It was
the first of several casino-hotels Kerkorian would buy, sell or build
in the decades that followed.
Movies held a lure, too. Kerkorian bought the MGM film studio three
times between 1970 and 1996, once selling it to mogul Ted Turner and
buying it back in a matter of months.
It was a chance encounter with Lee Iacocca that sparked Kerkorian's
interest in Detroit. Meeting the then-automotive executive at a
Florida racetrack, Kerkorian agreed in 1990 to invest in Chrysler,
whose finances were shaky again because of slumping sales.
What followed was a tumultuous relationship with Chrysler than ended
in a nasty lawsuit. More recently, Kerkorian tried to engineer a
joint tie between General Motors and the Nissan-Renault venture.
If Kerkorian's motives are a subject of debate, so is his legacy. Many
longtime Detroit hands think Kerkorian has offered little more than
distraction through all his automotive adventures.
"I can't think of a thing that's he's done that's been constructive,"
Meyers said. "He likes to buy obviously very low and he hopes to hang
on until it's very high. Sometimes he wins and sometimes he doesn't."
For all that, whatever happens in Kerkorian's latest overture with
Ford, even his critics anticipate lively days.
"I'm kind of glad he's back," Meyers said. "He makes things
interesting."
From: Baghdasarian
by John Gallagher
Detroit Free Press (Michigan)
April 29, 2008 Tuesday
Apr. 29--For Kirk Kerkorian, the deal always comes first.
As the reclusive Las Vegas billionaire makes yet another run at a
Detroit automaker, his biography and his record suggest he plunges
in wherever he spots a potential score, as he apparently sees at Ford
Motor Co.
"Kirk drives into weakness," says Gerald Meyers, former chairman
of American Motors and a business professor at University of
Michigan. "When he sees weakness, he sees dollar signs."
David Cole, chairman of the Center for Automotive Research in Ann
Arbor, agreed. Ford's low stock price and its promise of a recovery
have enticed Kerkorian into one more dance with Detroit metal.
"I think what he senses is this is an inexpensive asset that's on
the verge of a turnaround and there's going to be a lot more value
at Ford not too far down the road," Cole said.
But few if any observers think Kerkorian is interested in cars and
trucks beyond what they mean for Ford's stock price.
"Kerkorian's a money man," Meyers said. "He can't stand standing on
the sidelines when there's a possibility of making a killing."
He has made scores aplenty over the past half-century. Forbes magazine
estimates Kerkorian's fortune at $18 billion, ranking him seventh on
Forbes' list of richest Americans.
Perhaps one reason for Kerkorian's continuing interest in Detroit can
be summed up in two words: Jerry York, Kerkorian's longtime aide and
expert on the automotive industry. He's a man who can spot value in
an undervalued automaker and bring it to his boss' attention.
"I don't think he'd be at all involved in Detroit if he didn't have
York," Meyers said.
Certainly Kerkorian's latest bid for a hefty stake in an American
automaker has some people asking why the 90-year-old Las Vegas
dealmaker cares so much about the domestic auto industry. Kerkorian,
after all, already invested heavily in Chrysler and General Motors.
Because the reclusive billionaire rarely does interviews, his past
will have to provide any clues.
That personal history shows strong evidence that once he's intrigued
by an idea, Kerkorian pursues it relentlessly.
The son of Armenian immigrants who ran a produce business in Fresno,
Calif., Kerkorian quit school as a teenager to go to work. He spent
a year in the Depression-era Civilian Conservation Corps, served
as a military pilot during World War II and after the war ran a
small air-charter service to ferry gamblers between Los Angeles and
Las Vegas.
Kerkorian paid $60,000 for the charter service in 1947, when he was
30. In 1968, he sold it to Trans-america Corp. for a little more
than $100 million. It was his first fortune, and banker friend Walter
Sharp said the windfall transformed Kerkorian.
"Kirk realized then that everything was in the timing," Sharp said
in 1995. "He became fascinated with the idea of making deals."
For a man so intensely private, he showed a remarkable taste for
splashy investments, mostly in Las Vegas. With the proceeds of his
airline sale, he acquired the Flamingo Hotel there in 1967. It was
the first of several casino-hotels Kerkorian would buy, sell or build
in the decades that followed.
Movies held a lure, too. Kerkorian bought the MGM film studio three
times between 1970 and 1996, once selling it to mogul Ted Turner and
buying it back in a matter of months.
It was a chance encounter with Lee Iacocca that sparked Kerkorian's
interest in Detroit. Meeting the then-automotive executive at a
Florida racetrack, Kerkorian agreed in 1990 to invest in Chrysler,
whose finances were shaky again because of slumping sales.
What followed was a tumultuous relationship with Chrysler than ended
in a nasty lawsuit. More recently, Kerkorian tried to engineer a
joint tie between General Motors and the Nissan-Renault venture.
If Kerkorian's motives are a subject of debate, so is his legacy. Many
longtime Detroit hands think Kerkorian has offered little more than
distraction through all his automotive adventures.
"I can't think of a thing that's he's done that's been constructive,"
Meyers said. "He likes to buy obviously very low and he hopes to hang
on until it's very high. Sometimes he wins and sometimes he doesn't."
For all that, whatever happens in Kerkorian's latest overture with
Ford, even his critics anticipate lively days.
"I'm kind of glad he's back," Meyers said. "He makes things
interesting."
From: Baghdasarian