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The Nation | COLUMN ONE

A Born Gambler Rolls the Dice at 88

Billionaire Kirk Kerkorian has bought and sold airlines, movie studios and Las Vegas casinos. Now he's placing a bet on GM.

June 09, 2005|David Streitfeld | Times Staff Writer

Ever since Kirk Kerkorian revealed last month that he was buying a major stake in General Motors Corp., people have been speculating about his motives.

Here's one safe bet: The wealthiest man in Los Angeles is not acquiring shares in the biggest and sickest automaker out of any special affection for cars.

Unlike many wealthy folk, Kerkorian does not fill his garages with lovingly shined roadsters. In a city where you are what you drive, he drives a Jeep Grand Cherokee. Before that, he drove a Taurus.

Long ago, he cared. When Kerkorian first became rich, he bought a lavish Cadillac and outfitted it with spiffy wire wheels. Then he got bored and got rid of the car.

For Kerkorian, this is a familiar pattern.

"I used to have beautiful watches," he says, extending his right wrist beyond the cuff of a crisp white shirt. It's bare. "I've done those things," he adds, dismissing all sorts of luxury goods and high-profile events. The man who owned the legendary Hollywood studio MGM watches the Oscars on TV.

There's only one thing whose appeal has remained constant: doing deals. For 60 years, Kerkorian has been buying and selling airplanes, airlines, movie studios and Las Vegas casinos and hotels, trading his way to what Forbes magazine estimates is a $9-billion fortune.

This week has been a big one, even for him. On Monday, Kerkorian turned 88, an age at which most moguls would be taking it real slow. Tuesday, he was the ghost in the room as unhappy GM shareholders assembled in Wilmington, Del., for their annual meeting. Wednesday, Kerkorian disclosed that he had acquired an additional 19 million GM shares in a tender offer, boosting his stake to 7%.

In Detroit, the reaction to Kerkorian has been half hope, half dread and complete surprise. Even his onetime partner, former Chrysler Chairman Lee Iacocca, says he was "stunned" that Kerkorian "had taken such a position in a difficult time."

Maybe, the optimists think, Kerkorian can spark management into saving GM, somehow pumping up its sales while slashing its healthcare costs. Or perhaps, the pessimists counter, he'll push for a breakup, splitting the cash-rich financing arm from the ailing car-making part. That might be the end of GM as we know it.

Kerkorian denies any plans to exert an influence. "I'm a very passive investor," he says.

Many remember his 1990 passive investment in Chrysler. It turned into a hostile but unsuccessful takeover attempt in 1995. Yet it's possible that he has no master plan for GM, and simply believes it's a good buy.

"He's a born gambler with a sixth sense for sniffing out value," says Iacocca, who joined in the ill-fated Chrysler bid. "Doing deals is what keeps him alive."

Doing them simply is what keeps him rich. "You get a checklist," Kerkorian says, "and then you just sort of ride herd on it." It's always just a few items on a single sheet of paper.

His lawyer, Terry Christensen, has watched him invest for 35 years. One of Kerkorian's strengths is his ability to screen out the extraneous.

"He likes something on a clear table, where he can see what it is," Christensen says.

At the moment, Kerkorian's desk is actually quite cluttered, but he says this is atypical. He's been away at the Cannes Film Festival, which he enjoyed from the deck of his 192-foot yacht, the October Rose.

This office, on a quiet Beverly Hills street, makes an unlikely command post. It's discreet to the point of invisibility. The suite isn't listed in the building directory and the nameplate on the locked door is blank.

Inside, there's nothing to impress a visitor. Kerkorian's office has a big desk, a small table and a couch. There are models of his Boeing 737 and, more incongruously, a sailing ship -- a gift, he says, like many things in this room. There are few personal touches beyond the photos of Tracy and Linda, the children from his long-dissolved marriage to former Las Vegas dancer Jean Hardy.

His daughters, born in 1959 and '65, provided the name for Kerkorian's holding company, Tracinda, and his foundation, Lincy, but have no direct involvement with his business.

Also on the shelves are a smattering of books. Several are about Armenia, the former Soviet republic that is Kerkorian's ancestral land.

Exactly a century ago, his father left Armenia for the San Joaquin Valley. Kirk, born in Fresno, initially spoke Armenian. Although he quickly learned English, the country has always exerted a strong pull. Many of his closest friends and colleagues have been of Armenian descent. Since the country declared its independence in 1991, he has been its benefactor to the tune of hundreds of millions of dollars.

The Armenians have tried to express their gratitude. "Everyone wanted to name something for him. An avenue, a plaza, a city -- you name it, why not?" says Haik Gugarats, assistant to the Armenian ambassador to the United States. "But it was his wish that we don't."

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