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Kerkorian Chases Chrysler with Low Bid

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Kerkorian Chases Chrysler with Low Bid

Economy

Kerkorian Chases Chrysler with Low Bid

Kerkorian Chases Chrysler with Low Bid

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Billionaire Kirk Kerkorian got rich in the casino and airline businesses, but he's always had a hankering to own a major auto company. Now 89, he is making another bid to acquire Chrysler from Daimler-Benz. It's not clear he can succeed — he is bidding less than $5 billion.

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris. Daimler confirmed this month that it wants to sell off its U.S. subsidiary, Chrysler, and one of the first bidders was the Tracinda Corporation, owned by Kirk Kerkorian, the 89-year-old California billionaire. Kerkorian may not be well-known to the public, but he's one of the most successful investors in the world. As NPR's Jim Zarroli reports, he's been trying to win control of an auto company for at least a decade.

JIM ZARROLI: Kirk Kerkorian announced he was bidding for Chrysler right before Easter. Pete DeLorenzo, who publishes the Web site autoextremist.com, says Kerkorian has a habit of making big announcements on the eve of major holidays.

Mr. PETE DELORENZO (autoextremist.com): He does that for two reasons: one, so he can dominate the business coverage in the media for several days; and two, he can make a holiday weekend miserable for his intended prey.

ZARROLI: That may or may not be true. Kerkorian almost never speaks publicly, so it's hard to really know why he does anything. What's clear is that Kerkorian is a skilled deal-maker with an almost unerring instinct for buying and selling at the right time. David Strayfelt(ph) of the Los Angeles Times, who is one of the few journalists to have interviewed him, notes for instance that Kerkorian was involved with MGM Studios for nearly 30 years.

Mr. DAVID STRAYFELT (Journalist, Los Angeles Times): He owned it, he sold it, he bought it back, he sold it, he bought it back, he sold it. All three times he sold it, he made money.

ZARROLI: Today, Kerkorian is number 26 on Forbes Magazine's list of the wealthiest Americans with a net worth of $9 billion. Kerkorian was born in modest circumstances in Fresno, California. He was a boxer and pilot who made money in aviation and then got even richer in the casino business.

Kerkorian is often seen as a kind of saner version of Howard Hughes. Historian David Schwartz teaches at the University of Nevada at Las Vegas.

Mr. DAVID SCHWARTZ (Historian, University of Nevada at Las Vegas): The both had this involvement in the movie industry and in the airlines, but Kerkorian with MGM Mirage has really made lasting changes to the state of Nevada and the gaming industry here, whereas Hughes, in the end, didn't.

ZARROLI: In the late 1960s, Kerkorian opened The International, at the time the world's biggest hotel. He followed it up with the MGM Grand, which was bigger still. That burned down.

(Soundbite of music)

ZARROLI: In 1993, Kerkorian opened the new, even bigger MGM Grand with commercials that made it seem like one of the seven wonders of the world.

(Soundbite of advertisement)

Unidentified Man: Introducing the MGM Grand Hotel Casino and Theme Park, the lion of Las Vegas.

ZARROLI: Today he's the majority shareholder in MGM Mirage, which owns many of the biggest casinos on the Strip. In his public life, Kerkorian is the anti-Trump, someone who completely shuns the limelight, but in business Kerkorian is a man not afraid to take a high profile. These days he's going after the auto industry. Reporter David Strayfelt says for what it's worth, he doesn't think the billionaire has much interest in cars.

Mr. STRAYFELT: He drives very basic cars, middle-class cars, Pontiac Firebird once, a Jeep Grand Cherokee, and he drives them himself. In Los Angeles, if you have money, you just don't do that.

ZARROLI: But Kerkorian sees the industry right now as a place to make money. He became a major shareholder in General Motors, where he made a failed attempt to get the company to join forces with Nissan and Renault. Now he's making his second attempt to buy Chrysler. Pete DeLorenzo of autoextremist.com says Kerkorian is not popular among auto executives or unions.

Mr. DELORENZO: I think the net of what Detroit thinks of Kerkorian is that he's basically a meddler and that he doesn't really have good intentions for the long-term health of the business.

ZARROLI: Kerkorian has bid just $4 billion for Chrysler, a shockingly low amount, but that's widely seen as an opening gambit, and whether the deal succeeds will depend on whether Kerkorian can win over Daimler Chrysler's board and the unions, and they've been cool so far. If he can't do that, Kerkorian has shown he's not afraid to walk away from the table, at least for a while. Jim Zarroli, NPR News, New York.

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