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Kirk Kerkorian Shook Up the Auto Industry Time and Again

Billionaire investor influenced each of Detroit’s Big Three.

by on Jun.18, 2015

Kirk Kerkorian, who made an impact on each of the Detroit Three, died at 98 years of age.

He never ran a car company – though he wanted to – but Kirk Kerkorian had a significant impact on the Detroit auto industry. And not just on one of the domestic Big Three. At various times, the gadfly investor shook things up at each of the Detroit manufacturers.

Kerkorian, who died in Beverly Hills over the weekend at the age of 98, was best known for his investments in the film and gambling industries. But through Tracinda, his private holding company, this one-time amateur boxer made several runs at getting into the automotive industry, as well.

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Perhaps his longest-lasting legacy can be seen at Chrysler, where he attempted a hostile takeover that, according to industry observers, eventually led the smallest of the Detroit makers to seek a seemingly friendlier alliance with Germany’s Daimler-Benz. (more…)

Jerry York, Once Key Figure at General Motors, Ford and Chrysler, Dead at 71

Helped stage failed bids to control Chrysler, GM.

by on Mar.18, 2010

In his long career, Jerry York worked for all three Detroit makers and eventually challenged management at each of them.

Ask those who know Jerry York what they thought of him and you’d heard a mix of descriptions: brilliant strategist, gadfly, great ally, dangerous enemy, and a voice for change in a long-stagnant auto industry.

The truth about Jerome B. York, who died Thursday at 71, is likely a bit of all the above.

At the time of his death, from a brain aneurysm, York was serving as CEO of Harwinton Capital, an investment firm, and, since 1997, as a director for Apple Inc., the successful producer of iPods, iPhones and Mac computers.  But it was in the auto industry that York was best known, and where his legacy will likely be most debated.

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Born in Memphis, the bookish-looking York maintained a soft and subtle twang to his speech long after he moved to Michigan.  He was trained as an engineer, receiving degrees from the U.S. Military Academy at West Point, MIT, and the University of Michigan.  But in an industry long divided between “car guys” and “bean counters,” it was on the finance side that he earned his notoriety.

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Former Chrysler Chief Financial Officer Blasts Daimler, Says Chrysler Will Survive

Jerry York predicts a Chrysler recovery.

by on Jun.11, 2009

Jerome B. York

"Daimler did a god awful job."

Despite all the doubts about it long-term viability, Chrysler can survive but they’re going to have to recover from mismanagement at the hands of former partners at Daimler AG according to Chrysler’s former Chief Financial  Officer.

“I think they” can survive,” Jerome York said, after an appearance at Oakland University in Rochester Hills, Michigan. “If you believe some of the things they’ve said about breaking even at a relatively low level of sales, and if you believe at some point we’re going to have an (economic) recovery,” then York thinks Chrysler Group will make it.

The U.S. Supreme Court cleared the way for Chrysler’s emergence from bankruptcy this week by declining to hear an appeal by disgruntled creditors, dealers and contingency fee product liability lawyers.

York also said the Italian carmaker Fiat would do a better job of managing Chrysler than Daimler. “I sure hope so because Daimler did a god awful job,” he said. “Daimler should be shot, figuratively speaking of course, for what it did. They left this company in a mess.”

York also called the styling “deplorably bad with a few exceptions; The Jeep brand has only two real Jeeps, the Grand Cherokee and Wrangler and the rest are badge engineered Dodges.” He said, “You can’t treat a brand like that and not do some fatal damage to it.”  (more…)

Kerkorian’s Own Problems Led to Ford Pullback

Investor could find it tough to return to the auto industry.

by on Mar.06, 2009

Will Kirk Kerkorian's own empire fall?

Will Kirk Kerkorian's own empire fall?

Last fall, the reclusive billionaire Kirk Kerkorian’s decision to sell his stake in the Ford Motor Co. was widely viewed as just another symptom of Detroit’s long decline. However, it turns out that Kerkorian was giving up on Ford because his own economic empire was under siege.

Kerkorian isn’t going to have to apply for the expanded unemployment benefits being offered by the Obama administration but the core of holdings, MGM Mirage is now under siege.  The company’s shares have lost 50% of their value in a matter of days, MGM’s credit rating has been slashed, major lenders have halted the supply of money for big projects and rumors are circulating the MGM is now on a glide path into bankruptcy court.

“The downgrade reflects MGM’s draw in the context of the company’s strained liquidity position and the continued expected deterioration of Las Vegas operating trends.” Fitch rating service noted after MGM announced that it borrowed the remaining $842 million left from a $4.5 billion senior revolving portion of its $7 billion credit facility.   “Fitch previously noted that it believes that MGM is unlikely to remain in  compliance with its 7.5 times (x) leverage covenant this year, so fully drawing on the revolver increases the likelihood of a near-term covenant breach,” the report noted.

A breached covenant means lenders can call MGM’s outstanding notes and loans, forcing the company into bankruptcy.

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