Kirk Kerkorian left imprint on Detroit
DETROIT – In April 1995, my job as Business Editor at WDIV-TV News in Detroit wasn't even a gleam!
Working as an anchor in Saginaw, my only automotive experience was coverage of General Motors. So, when Las Vegas billionaire Kirk Kerkorian made his infamous $20 billion move with former Chrysler CEO Lee Iacocca to conduct a hostile takeover of Chrysler, it didn't register in my head outside of the national headline it was at the time. Little did I know then I would end up getting a very solid, decade-long dose of Kerkorian's activist shareholder overtures in my next job -- and a very good education.
From the minute I arrived in Detroit in October 1995 until just before the auto bankruptcies, Kerkorian became like a bad penny. He would turn up at the strangest times and send me scrambling to the telephone trying to sort out what brand of mayhem he had planned for the next carmaker and rush to the airwaves to explain it. Just as soon as it looked like he'd backed off, he would reemerge with a move on the next carmaker.
He failed in his attempt to get control of Chrysler the first time, looped back around and tried again later only to lose out again. Billions of dollars exchanged hands in the process. He sued what became Daimler-Chrysler for calling their "merger of equals" a merger at all. He said then-CEO Jurgen Schrempp orchestrated a fraudulent takeover. Kerkorian lost his case in federal court, but not before his attorneys grilled Schrempp on the stand, taking a pound of flesh on general principle alone.
It was always noted Kerkorian was a street fighter, having had a rough upbringing. He dropped out of high school at age 16 and became a small-time boxer. He never seemed to lose that taste for the fight, especially as his taste for "doing the big business deal" grew with his prodigious piggy bank. He would buy billions of dollars worth of stock in the Big Three as if filling a grocery order. At one time he gained a seat on GM's board of directors. Later he also ended up owning 14 percent of Ford. He memorably grilled legendary turnaround artist Alan Mulally along with Bill Ford Jr. in 2008 looking to make money on Ford's recovery.
Kerkorian rarely came to Detroit. He was nearly as reclusive as Howard Hughes. His media relations people made the auto industry PR people seem downright talkative --they usually are not!
It was difficult work but interesting nonetheless because in the early years, when I was uncertain of how business truly worked, Kerkorian would lob another lesson over the bow. Over time I learned to greatly respect Kerkorian on a number of fronts.
First off, he was doing these deals in his 80s. That alone seemed preposterous. Few among us would have the same drive at that age, but he was tireless.
Next up is his biography. He flew for the British in World War II. He used that understanding of flight to form an airline out of war surplus aircraft and started flying tourists from Los Angeles to Las Vegas. Before long he sold the airline for $100 million in the 1960s. He used that fortune to buy Vegas real estate and before long he became the owner of the majority of the hotel rooms there. He was so successful he bought MGM movie studios and sold them three different times. He also owned the MGM casino.
Kerkorian was a dynamo who saw that Detroit's automakers were not living up to their potential. He took the knowledge Iacocca gave him and pressed the Big Three to wake up and do a much better job.
"He was a wheeler dealer and he wanted to shake things up," is how Forbes Magazine's JoAnn Muller remembers him. "He really pushed hard. He saw the potential and woke them up because for a long time they didn't think they had to live by the rules the others did."
Neither he nor we knew at the time it was entirely too late. The Chrysler and GM bankruptcies ended his foray into Detroit and, sadly, today few remember the activist shareholder who could see what the car companies could become if they just would do what needed to be done.
I said on the air tonight I would see Kirk Kerkorian in my sleep in those days because he came and went so often and did it so audaciously it would take your breath away. He may have been a corporate raider but he knew what needed to be done. His rags to riches story is a lesson in tenacity and the realities of big business. You may not have liked him and you may not have thought that he added any value. But a shot across the bow from Kirk Kerkorian certainly made all of us in Detroit stand up and take notice at a time when someone needed to.
For the hundreds of stories I did with his name in them, Kirk Kerkorian certainly taught a young business reporter the lessons of high finance. Lessons none of us should forget.
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