Whatever you think of his business practices, you’ve got to have some sneaking admiration for Kirk Kerkorian, if only because he refuses to recognize the laws of biology. This man is running around fighting to gain control of General Motors . . . at age 89.
Most people who make it to that age don’t even buy green bananas. If you see him as just a cranky old gadfly, consider this: Long before General Motors head Rick Wagoner was born, Kerkorian was a pretty good amateur boxer.
“Rifle Right Kerkorian” quit because he thought he could do better. He went on to be a pilot for the Royal Air Force during World War II, the same underdog outfit which saved Western Civilization in the Battle of Britain. After that, he made a few billion building hotels and resorts in Las Vegas. He started out, by the way, the son of penniless refugees from the Armenian holocaust. He is not likely to be remembered as an underachiever.
General Motors, on the other hand, is a mess.
The company has been in so much trouble for so long, that we have become almost numb to the terrible shape it is in. There were actually headlines last week that said things like, “Good News; GM only loses $3.2 billion in the second three months of this year.”
Why was that good news? Most of the loss was due to their paying thousands of workers to leave the company.
They also “only” lost $85 million in North America. Yes, they made a little bit on other continents. But lost in the fine print was the fact that GM’s worldwide market share fell by more than one percent in this one quarter alone. Their share of the American car and truck market continues to be in free fall.
Back in the 1960s, more than half of all cars sold in America were General Motors. Today their market share is less than a quarter. And the Chinese haven’t even gotten here yet. Kirk Kerkorian wants, as far as I can tell, to force GM to form an alliance with Nissan and Renault. The traditional automotive press is pooh-poohing this.
They say the present management needs more time. While it might be sort of morbidly interesting to see how long it takes to totally destroy what was once the world’s biggest corporation, I am not sure that would be a good idea.
Frankly, I am not sure that an unemployed Bulgarian collective farm manager could do a worse job than the GM management has done. Fourteen years ago, the last time GM was on the rocks, the frightened board turned to a former toothpaste salesman, Procter & Gamble’s John Smale, to save it.
This time, the biggest stockholder and possible corporate savior is a former daredevil bomber pilot who has a track record of making billions, not losing them. I think GM could do worse.
And they probably will.