He never ran a car company – though he wanted to – but Kirk Kerkorian had a significant impact on the Detroit auto industry. And not just on one of the domestic Big Three. At various times, the gadfly investor shook things up at each of the Detroit manufacturers.
Kerkorian, who died in Beverly Hills over the weekend at the age of 98, was best known for his investments in the film and gambling industries. But through Tracinda, his private holding company, this one-time amateur boxer made several runs at getting into the automotive industry, as well.
Perhaps his longest-lasting legacy can be seen at Chrysler, where he attempted a hostile takeover that, according to industry observers, eventually led the smallest of the Detroit makers to seek a seemingly friendlier alliance with Germany’s Daimler-Benz.
But Kerkorian also set his sights on General Motors and Ford at different times. And, ironically, he envisioned a consolidation of the industry that many observers now believe is inevitable.
Born on June 6, 1917 to Armenian immigrants in Fresno, California, Kerkorian dropped out of school after the eighth grade, trying his hand – quite literally – as an amateur boxer known as “Rifle Right Kerkorian.”
He won the Pacific amateur welterweight championship, but Kerkorian’s boxing career was cut short by World War II. Rather than getting drafted into the infantry, he learned to fly and landed a job ferrying planes from Canada to Europe for the British Royal Air Force. After the war, he started a charter airline flying gamblers from Los Angeles to the new mecca of Las Vegas – selling Trans International Airlines in 1968 for $104 million.
By then he already owned a chunk of land on the Las Vegas Strip which he sold to Caesar’s Palace. In 1967, Kerkorian built what was then the world’s largest hotel, Sin City’s International, which opened with headliners Elvis Presley and Barbra Streisand. Over the years, Kerkorian took ownership of a variety of Las Vegas properties, including the Flamingo Hotel and the MGM Grand Hotel and Casino. He also purchased the MGM movie studio in 1969.
Through Tracinda, Kerkorian traded properties repeatedly, cannily building a multi-billion-dollar fortune even though he lost out on several big deals.
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His first attempt to become a major player in the auto industry came in 1990, after meeting with then Chairman Lee Iacocca. He invested heavily in the smallest of the U.S. automakers, a move initially seen as a blessing for a company that was struggling for cash to fund an aggressive product development program.
After Iacocca was forced out, Kerkorian made his move with the help of Iacocca’s former financial wizard, the late Jerry York. In 1995, the billionaire announced an unexpected bid to take control of Chrysler, a move that shocked Iacocca’s hand-picked successor, Bob Eaton.
It turned into a long and bitter fight. But while Eaton’s team eventually prevailed, the new chairman was shocked and worried that the carmaker couldn’t survive on its own any longer. According to several close sources, that was a major factor in Eaton’s decision to seek a “merger of equals” with Germany’s Daimler-Benz. The new DaimlerChrysler collapsed after less than a decade, eventually resulting in the U.S. maker’s bankruptcy and a takeover by Italy’s Fiat.
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Kerkorian wasn’t done with Detroit. In 2005, he began buying up General Motors shares. As with Chrysler, the investor’s money was initially welcomed, but in 2006 he made a run at the increasingly fragile automaker. Among other things, Kerkorian called for GM to partner up with the Euro-Asian Renault-Nissan Alliance. But GM rebuffed his offer and Kerkorian eventually sold off his shares and moved on.
This time, to Ford Motor Co., where Tracinda built up a 6.5% stake by 2008. But Kerkorian unexpectedly pulled out of the automaker just as new CEO Alan Mulally desperately began to reshape the company in a bid to survive the coming recession.
“In light of current economic and market conditions,” Tracinda said at the time, “it sees unique value in the gaming and hospitality and oil and gas industries and has, therefore, decided to reallocate its resources and to focus on those industries.”
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Kerkorian remained active, both at a personal and professional level until the final years of his life. He was an active tennis player into his 90s. While he often appeared in tournaments he was intensely private about his personal life, with little word of his declining health going public until his death was announced earlier this week. He passed away on June 15.
I doubt many will miss Kerkorian. I can’t think of anything good that he did for society.
Kirkorian was a great man and he wasn’t a pussy.
Yeah, right. That’s a good joke/sarcasm.