Old hands keep a grip on game

Click to follow
THERE was no doubt in the mind of the New York Times on Friday about Lee Iacocca's role in the bid for Chrysler: he needed his head examined for even thinking of getting into bed with a sharpshooter such as Kirk Kerkorian.

What the Times may have overlooked was that Lee and Kirk have been corporate bedfellows for at least two years. That is how long Mr Iacocca has been a director of MGM Grand, Mr Kerkorian's hotel and casino business in Las Vegas.

It may be more than coincidence that within months of Mr Iacocca joining MGM Grand in 1993, Mr Kerkorian made a paper profit of $1.5bn (£950m) by buying into Chrysler.

In May last year, Mr Iacocca spent $4.5m on a stake in Full House Resorts, a casino and hotel complex, and formed a merchant bank specialising in the gambling game.

With their combined age 147, it is amazing that they seem willing to devote so much energy to their business games. After all, they hardly need the money. Mr Kerkorian, 77, whose full first name is Kerkor, was recently - according to Forbes magazine - among the richest men in the US, worth an estimated $3.1bn. Mr Iacocca, 70, is not quite in that league, but his careers at Ford and Chrysler have left him very wealthy.

Mr Kerkorian is an Armenian farmboy with an elementary education who trained US fighter pilots for the Royal Air Force during the Second World War. That took him into the post-war charter airline business, but in 1969 he sold out and began wheeler-dealing in earnest.

Hollywood still bears the scars of his forced buyout of the Metro-Goldwyn- Mayer studio, which he then stripped of priceless films, including Gone With the Wind and The Wizard of Oz.

In 1973, he moved on to Las Vegas to build an MGM Grand hotel, which burnt down seven years later, killing 85 people. He rebuilt the latest version at a cost of $1bn last December. It is the world's biggest hotel, with 5,005 rooms and a casino the size of New York's Yankee Stadium.

Mr Iacocca, who continued to collect $500,000 a year as a consultant to Chrysler after he left in 1992, portrays himself in his best-selling autobiography as the poor son of Italian immigrants who works his way through college and starts working at Ford as a student engineer. He climbs to within a heartbeat of the pinnacle, but at the last Henry Ford II snarls: "I came to the conclusion that Iaccoca could not succeed me."

In 1978, he joined Chrysler, on the day it announced a quarterly loss of $160m. He persuaded Congress to lend Chrysler $1.2bn, a debt the company repaid by 1983. He was riding so high that three years later a group of businessmen begged him to stand as Democratic presidential candidate.

He appeared on television to advertise Chrysler and took the group into aerospace and defence - again putting its survival in jeopardy. The board refused to extend his term of office, and he left with parting remarks indicating that he was a victim of corporate fashion.

By then, he had already returned to his roots. He bought a villa in Tuscany in 1985 and ended up with 5,000 olive trees producing extra-virgin olive oil.