Kirk Kerkorian, the billionaire casino mogul who twice attempted takeovers of Chrysler and in 2006 tried to fashion a global alliance between General Motors and Nissan-Renault, died Monday in Los Angeles, according to a statement from his investment company, Tracinda Corp.
Kerkorian, an eighth-grade dropout who helped shape the development of Las Vegas, died nine days after his 98th birthday. He was the world’s 393rd richest person in 2015, according to Forbes, yet shunned luxury cars for more modest offerings from Detroit: a Pontiac Firebird, a Jeep Grand Cherokee and a Ford Taurus.
His last known investment in the auto industry was in 2008, when he spent more than $1 billion buying a 6.5 percent stake in Ford Motor Co., becoming its largest outside shareholder. He sold the shares at a $600 million loss later the same year, expressing a lack of confidence in the automaker’s turnaround prospects.
In 2007, Kerkorian made a $4.6 billion bid for Chrysler, which was then part of DaimlerChrysler. He ultimately lost out to Cerberus Capital Management.
It was Kerkorian’s external analysis of Chrysler that had helped lead to the company’s tie-up with Daimler-Benz a decade earlier. Kerkorian had enlisted former Chrysler Chairman Lee Iacocca to help make a $22.8 billion hostile offer for Chrysler in 1995, when he already owned a 10 percent stake.
Chrysler Corp. Chairman Bob Eaton managed to fend off Kerkorian’s overtures, but the bitter, 10-month battle pressured Eaton to find another partner. Though Kerkorian had failed, he made $2.7 billion on his investment.
“He's a born gambler with a sixth sense for sniffing out value," Iacocca said of Kerkorian in an interview with the Los Angeles Times in 2005. "Doing deals is what keeps him alive."
Kerkorian unsuccessfully sued DaimlerChrysler in 2000, claiming that he was duped into supporting the 2008 tie-up by executives that had billed it as “a merger of equals.”
The suit was prompted by a 2000 interview in The Financial Times of London, in which DaimlerChrysler Chairman Juergen Schrempp said he had intended all along to relegate Chrysler to a division of the parent company and had used the term ''merger of equals'' only for ''psychological'' reasons.
In court testimony, Kerkorian, who sought more than $1 billion in lost acquisition fees, said Eaton had told him Chrysler’s board would only agree to the merger with the approval of Tracinda, which owned 89 million shares at the time.
During the trial, Kerkorian testified that he was ''very surprised, very upset'' by the Schrempp interview with the Financial Times and the fact that a few weeks after it appeared, Chrysler chief executive James Holden was dismissed and replaced by Dieter Zetsche, a former Mercedes executive from Germany.
''It was like there was deception,'' Kerkorian said in testimony. ''And I guess I got more upset when Holden was fired shortly after. It was all in two weeks' time. Then there were two people who came out from Stuttgart and just took over Chrysler. So everything fell in place.''
Taking on GM
In 2005, Kerkorian resurfaced in Detroit when he bought nearly 10 percent of GM shares. He urged then-CEO Rick Wagoner to pursue a partnership with Renault-Nissan.
Wagoner reluctantly engaged in talks with Renault-Nissan CEO Carlos Ghosn for several months before they fell apart amid a demand that GM be given a multibillion-dollar payment to participate in an alliance. Kerkorian sold all of his GM shares by late 2006, and his adviser, Jerry York, quit a seat on GM’s board of directors he had held for eight months.
York, a former Chrysler finance chief who aided Kerkorian in his automotive ambitions, died in 2010.
Kerkorian rarely visited Detroit or publicly shared his visions, instead having York speak and act on his behalf. In a 2006 speech, York said GM needed to restructure itself more urgently and questioned the benefit of its Hummer and Saab brands. He said GM had only enough cash and assets to keep going for about three more years.
GM ended up selling Saab and closing Hummer after filing for bankruptcy protection in 2009.
"Kirk was always inspiring to be around because his eye was always cast on the future," Iacocca said in a statement Tuesday. "His low-key, almost shy demeanor belied a warm and caring individual whose basic decency often was overshadowed by images of the mega deal-maker."
Kerkorian, the largest shareholder in MGM Resorts International, had a net worth of $16 billion in 2008, ranking 41st on that year’s Forbes list of the world’s richest people. His fortune had diminished to about $4 billion at the time of his death.
Kerkorian was “a great man, a great business leader, a great community leader, an innovator, and one of our country's greatest generation,” MGM CEO Jim Murren said in a statement. Murren said Kerkorian “combined brilliant business insight with steadfast integrity to become one of the most reputable and influential financiers of our time."
Additional coverage from Bloomberg.
Additional coverage from Reuters.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.