Kirk Kerkorian has made billions on brazen investments in Las Vegas and Hollywood. But for years, Detroit seemed to be where his heart was. Mr. Kerkorian tried twice to buy Chrysler; made a large investment in General Motors and tried to use that stake as a lever to change the giant company's direction; and on April 28, 2008, he announced he was seeking a major share of Ford, through purchases made by the Tracinda Corporation, his investment arm.
Six months later, however, that ardor seemed to be cooling, as the difficulties facing automakers mounted. On Oct. 21, Tracinda announced that it had sold 7.3 million shares of Ford at a huge loss and intended to further reduce its remaining 6.09 percent stake.
Since Mr. Kerkorian began buying Ford stock in April, he had spent about $1 billion to accumulate a initial 6.49 percent stake in the automaker. With his remaining 133.5 million shares valued at $311 million, Mr. Kerkorian has lost two-thirds of his investment.
His investment had been seen as a vote of confidence in the automaker, but the sale underscored the weakening state of Ford and its two Detroit rivals, General Motors and Chrysler, which are in merger talks. The industry has been struggling amid high gasoline prices, a sharp drop in consumer spending and a credit market that has made getting a car loan more difficult.
Mr. Kerkorian's biggest coups in Detroit took place in very different economic times. In 1995, he teamed with the former Chrysler chairman Lee Iacocca to start a hostile, $23-billion takeover of the smallest of Detroit’s Big Three automakers. While the effort failed, it ultimately triggered merger talks between Chrysler’s management and the German auto company Daimler-Benz that led to the creation of DaimlerChrysler. Mr. Kerkorian took another shot at buying Chrysler last year when DaimlerChrysler put the American operation up for sale. However, his bid was never seriously considered and Chrysler was sold to the private equity firm Cerberus Capital Management.
In 2005, Mr. Kerkorian acquired nearly a 10 percent stake in General Motors and was able to get one of his top advisers, Jerome York, named to the G.M. board. Then, in June 2006, Mr. Kerkorian and Mr. York began courting Carlos Ghosn, the chief executive of Renault of France, and Nissan Motors of Japan, to form a global alliance with G.M. When G.M. management rejected the idea, Mr. Kerkorian sold his stock and Mr. York quit the board.
Mr. Kerkorian began buying Ford stock in April 2008, and had spent about $1 billion to accumulate a initial 6.49 percent stake in the automaker. With his remaining 133.5 million shares valued at $311 million, Mr. Kerkorian has lost two-thirds of his investment.
The Tracinda Corporation, Mr. Kerkorian’s investment company, said that it sold 7.3 million shares of Ford on Oct. 20, 2008 at a huge loss and intended to further reduce its remaining 6.09 percent stake. -- Oct. 21, 2008
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