KERKORIAN DRIVES BIG DEALS THAT DRAW BIG CRITICISM
By John Gallagher
Detroit Free Press, MI
July 1 2006
Some say his only vision is of more profits for himself
Is he a visionary or a villain?
Kirk Kerkorian’s latest bold move, his attempt to arrange a shotgun
wedding between the Renault-Nissan alliance and General Motors,
has all the earmarks of his controversial career.
Like Captain Kirk of the Starship Enterprise, Kerkorian boldly
goes where no one has gone before. But he also goes where no one
particularly wants him to go.
Peter Morici, a professor of business at the University of Maryland,
says Kerkorian’s unorthodox moves are a distraction that takes
management away from the problems at hand.
"He’s not a Warren Buffett," Morici said Friday, referring to the
so-called Oracle of Omaha who built a legendary career on patiently
searching for and nurturing good companies. "He’s not a problem
solver. He sees opportunities for value, but he doesn’t leave the
companies better off for his adventures."
It may be that, unlike Buffett, Kerkorian lacks the patience for
anything but the quick score. If so, he developed the taste for it
early in his career.
The son of Armenian immigrants who ran a produce business in Fresno,
Calif., Kerkorian quit school as a teenager 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.
"Kirk realized then that everything was in the timing," a banker
friend, Walter Sharp, said in 1995. "He became fascinated with the
idea of making deals."
And deals there were. 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 in 1969, the first of several casino-hotels he would buy,
sell or build in the decades since.
Although nowhere near as reclusive as Howard Hughes, Kerkorian runs
a low-key operation. Angered by a reporter’s questions years ago,
Kerkorian very rarely gives interviews. Shy and unpretentious, he has
been known to stand in line even for movies his own studio produced.
His Las Vegas-based company, Tracinda Corp., is named for two
daughters, Tracy and Linda. His personal life has had a tabloid
flavor: Kerkorian has been married at least three times, including
a 1999 union with tennis pro Lisa Bonder that lasted one month.
It was a meeting with former Chrysler boss Lee Iacocca that sparked
Kerkorian’s interest in Detroit. Meeting the automotive executive at
a Florida racetrack, Kerkorian agreed in 1990 to invest in Chrysler.
Five years later, he mounted a takeover bid when the company didn’t
perform as he’d hoped. That bid ended when Kerkorian couldn’t stitch
together a workable deal.
Later, he supported the deal that saw Daimler-Benz AG merge with
Chrysler in 1998. But pleasure turned to anger when Kerkorian came to
believe the merger was really an ill-disguised takeover that devalued
his shares.
He sued DaimlerChrysler in a bitter and protracted battle that
ultimately he lost.