Kirk Kerkorian, Dead At 98, Was A Perpetual Loser In Detroit

Joann Muller Forbes Staff

Billionaire casino and Hollywood investor Kirk Kerkorian, who died Monday at the age of 98, tried many times to strike it rich in the automotive industry, but each time, he walked away disappointed.

In 1995, with help from retired Chrysler chairman and CEO Lee Iacocca, Kerkorian staged a hostile takeover attempt of Chrysler. The effort failed, however, and two years later, Chrysler agreed to be acquired by the German automaker Daimler-Benz, a deal that Kerkorian, the carmaker’s largest shareholder with a 14 percent stake, initially supported. Later, however, Kerkorian said he’d been duped by claims that the deal was a “merger of equals” and he sued DaimlerChrysler in federal court in 2000, seeking more than $1 billion in damages. He lost the case, however, and his appeal of the ruling was unsuccessful.

Kirk Kerkorian dead at the age of 98. (Photo by Alberto E. Rodriguez/Getty Images)

In 2005, Kerkorian renewed his interest in Detroit, amassing a nearly 10 percent stake in General Motors. Through his investment group, Tracinda, he put public pressure on GM’s then-CEO Rick Wagoner to merge with Renault-Nissan, the global alliance headed by CEO Carlos Ghosn. Again, talks failed and by the end of 2006, Kerkorian sold the bulk of his shares. Two years later, GM was collapsing, and in June 2009, the giant automaker filed for bankruptcy.

In April 2007 Kerkorian again made a run at Chrysler, offering $4.58 billion after DaimlerChrysler announced it wanted to sell the struggling U.S. division. His partner this time was Jerry York, the former CFO at Chrysler. Tracinda was outbid, however, and instead, Daimler sold 80% of Chrysler to the investment group Cerberus for $7.4 billion. The investment turned out to be a disaster, and both Daimler and Cerberus lost everything. In 2009, Italy’s Fiat ended up acquiring Chrysler in bankruptcy.

Kerkorian then turned his sights to Ford. In early 2008, he spent about $1 billion to accumulate a 6% stake in the automaker, but six months later, with the auto industry tanking after the Lehman Brothers collapse, it turned out to be a losing investment. He sold his entire stake by the end of the year, swallowing a loss of more than half a billion dollars.