Kirk Kerkorian to up ownership in Ford to 5.6 percent
The auto industry's old friend Kirk Kerkorian is back on the scene, and this time he has his sights set on Ford. In a press release issued today, Kerkorian's company Tracinda Corp. announced that it intends to buy 20 million shares of FoMoCo at $8.50 per share, which is a 13% premium over the $7.50/share at which Ford's stock closed on Friday. This would up Tracinda's ownership of Ford from 100 million shares at 4.7% to 120 million at 5.6%. In its press release, Tracinda expressed confidence in Ford's performance going forward under the leadership of Alan Mulally, and revealed that the investment firm has been watching the automaker since it surprised the industry with its Q4 2007 earnings. Last week's announcement of a better-than-expected Q1 2008 for Ford apparently sealed the deal for Kerkorian. Kerkorian has had a tumultuous past with Ford's crosstown rivals, General Motors and Chrysler. At one time he owned nearly 10% of GM and tried to broker a deal between the world's largest automaker and Nissan-Renault that ultimately fell through, after which Kerkorian sold all of his stock in the General. He also sued DaimlerChrysler for its allegedly deceptive "merger of equals" statement back in 1998, then tried to buy Chrysler from Daimler after it was all over.
Ford has released a statement by Bill Ford, Jr. and Alan Mulally that can be read after the jump, but it basically says that the company's stock is able to be purchased by anyone, even Kirk Kerkorian. As for what the 90-year-old is up to with his bid to buy more Blue Oval stock, time will tell.
[Source: Bloggingstocks, Photo by William Thomas Cain/Getty]
PRESS RELEASE
FORD MOTOR COMPANY STATEMENT ON TRACINDA CORPORATION ANNOUNCEMENT
The following statement is attributable to Ford Executive Chairman Bill Ford and Ford President and CEO Alan Mulally:
Dearborn, Mich., April 28 –"We welcome confidence in Ford and the progress we are making on our transformation plan. Any investor can purchase Ford shares, which are sold on the open market. The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth for all."
Reader Comments (Page 1 of 2)
MrOak 10:51AM (4/28/2008)
Here we go again.
Reply
imoore 10:49AM (4/28/2008)
Kirk Kerorian is a rich, troublemaking pest with nothing better to do with his time and money, just like Carl Ichan. If he just needs to cause trouble, why not bother Toyota, or Honda, or Volkswagen, or even some of the Chinese carmakers not controlled by the Chinese Government?
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Noidor 12:07PM (4/29/2008)
Yes Kerkorian's share in Ford is insignificant - less then 20% ofc/s. So he won't do much for now, but he never buys a ton all atonce. As for Renault Group performance: Renault group: 2007Revenues €40,682 millionNet income - Group share €2,669 millionWorkforce (1) 130,179Number of vehicles sold 2,484,472 Renault group: 2006Revenues(2) €39,969 millionNet income - Group share €2,886 millionWorkforce (1) 128,893Number of vehicles sold 2,433,610 Most recent data from Nissan: Date Feb 01, 2008Venue Nissan Head Quarters, Tokyo Nissan Motor Co., Ltd., announced financial results for the thirdquarter of fiscal year 2007, ending March 31, 2008, as well as forthe first nine months. Net revenue rose 18.2% to 2.7701 trillion yen.Nissan's operating profit totaled 211.9 billion yen, up 15.8%. Theoperating profit margin came to 7.7%. The consolidated net incomeafter tax came to 132.2 billion yen, up 26.6% compared with the sameperiod a year ago. Nissan sold a total of 898,000 vehicles worldwidein the October-to-December 2007 period, up 13.0%. In the April-to-December 2007 period, net revenue rose 13.9% to7.8346 trillion yen. Operating profit totaled 579.1 billion yen, up8.9%. Operating profit margin came to 7.4%. Net income after taxtotaled 344.6 billion yen, down 9.0% compared with the previous year.Globally, Nissan sold a total of 2,714,000 vehicles in the first ninemonths, up 8.4% compared with last year. "Despite the headwinds that affect our industry, Nissan has benefitedfrom the success of the new products launched during the past 12months," said Nissan President and CEO, Carlos Ghosn. "Although themarket outlook remains volatile for the coming months, Nissan isfocused and on track to deliver our full year objectives," continuedGhosn. Nissan's forecast for the full fiscal year is unchanged at anoperating profit of 800 billion yen and net income of 480 billionyen. So Renault-Nissan are weak how exactly? I agree that there is a lot to be done about cutting overhead costs,such as legacy, retirement, pay structure, benefits, costs of plantoperations, dealers, transport of parts, final assembly, etc etc. ButR&N would have made life a lot easier for GM, especially thesedays...it is simply not getting any easier in today's turmoileconomy. Maybe GM is confident in responsibilities given to Opel andHolden in design and development, bringing commonality. Those are theright things to do - however I feel that R&N could have brought moreuseful data to the table. Again I don't have a problem with Kerkorian or rich people in generalwho participate in investing. That's how this country was built -investing in manufacturing and constant development of industries,while at same time maintaining efficiency. And if Kerkorian isspending his own money do you not think he'd attempt to do the rightthing. Back up your claims. Again let me reiterate that I like whatChrysler, Ford and GM are doing, but any additional support shouldalways be looked at with open eyes, and some of you guys are cryingfoul without really getting into details as to why. Well it's all inthe details.
BluePariah 11:10AM (4/28/2008)
This guys is actually a zombie, methinks...
Reply
cowbell 11:33AM (4/28/2008)
He can buy as much stock as he wants, but with Ford's special family stock, he won't have much weight to throw around.
This is probably just a normal investment for Magneto.
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oby 11:46AM (4/28/2008)
Wise up you guys. Cap'n Kirk sees an opportunity to make money. Ford is the only one of the D3 doing the right things to survive and thrive. Kerkorian sees that Mulally is slowly but surely turning Ford around. Unlike that other crowd of insufferable, arrogant bozos over at RenCen. Look at it this way, he's moving into Ford so that when Clueless Motors goes down providing Ford with the opportunity to take up the slack, he will be raking in the dough. Smart man!
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Dude 12:55PM (4/28/2008)
Ford has a plan to survive and thrive?
Maybe their Euro and Aussie divisions do, but not in NA.
Tagg 1:56PM (4/28/2008)
Fords NA market share has been holding pretty steady over the past couple quarters. So they have stopped the plummeting of their market share, they are restructuring to meet decrease in demand and are launching a steady stream of new vehicles over the next few years. They also have a new line of engines that can offer great power and better fuel economy that will appear shortly.
That sounds like a good, long term strategy to me.
dawookie 1:38PM (4/28/2008)
Magneto anyone?
Reply
Rboyett 12:02PM (4/28/2008)
I actually love the fact that Kerkorian has done this.
It may be the swift kick in the ass that the Ford Family needs...
Reply
Noidor 12:26PM (4/28/2008)
I really don't see the logic behind the argument that Kerkorian is up-to-no-good again. Look at his track record, he isn't exactly known for destroying companies. Look at what he has kept in his portfolio and what he has sold after re-organization. I bet half you didn't bother to research it. Goofballs.
GM-Renault-Nissan partnership would have been great because GM won't ever need that capacity. Reminds me of the Iraq war (go at it alone approach), especially as the country is diving deeper into a recession. Reminds me of what LaGuardia said once, "why is it that every time you want to do something good, the nice people come in and ruin it all."
So props to Kerkorian, provided if he gets enough push to get rid of the status-quo within Ford, then future in NA should be bright. Outside of US (which is becoming increasingly less important of the market by the day) Ford has proven to be efficient, profitable and a producer of desireable vehicles.
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Doug 1:01PM (4/28/2008)
"GM-Renault-Nissan partnership would have been great"
Wrong! Nissan and Renault are both losing money. Adding one poorly operating business to another does not make both money-makers.
This isn't just an issue of "that capacity". this is an issue of over head from thousands of retired employees and thousands more ready to retire, along with current labor costs begin driven up by the union for the past 3 decades. It is also an issue of the big 3 overproducing for the last 2 to 3 decades to prevent idling workers, which costs them the same as it would to have them working. Ford is recovering by cutting production back to be level with demand, cutting wages back to fair values and cutting overhead from pensions and health care for retired employees so that they can compete with the foreign auto makers.
Kerkorian is just another investor with dollar signs in his eyes. He has no concept of what the real problems are with the big 3 and therefore, his solutions are dead ends.
imoore 3:25PM (4/28/2008)
Reanult and Nissan are both weak companies. If GM had hooked up with them both, then all three companies wuld have tanked. And if the Ford family and its top executives think that Kerkorian is good for the company, then wait until he sics his #1 flunky, Jerry York on them.
Tool 12:29PM (4/28/2008)
Jesus, will this guy never quit?
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Moosetang 12:51PM (4/28/2008)
Not much he CAN do, Ford common stock stock doesn't have much influence over the company. They have a two-tier system and only the upper-tier stock owned by the Ford Family members can actually influence the course of the company.
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Matt 1:41PM (4/28/2008)
"Dude:
Ford has a plan to survive and thrive?
Maybe their Euro and Aussie divisions do, but not in NA."
Exactly! Couldn't have said it better myself.
Leaf 1:52PM (4/28/2008)
He always has the same awkward expression on his face...
Reply
imoore 3:27PM (4/28/2008)
I hope that plan to survive includes unloading Troller in Brazil and actually building a replacement for the Ranger. And saving Mercury, if they care.
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Noidor 5:31PM (4/28/2008)
Yes Kerkorian's share in Ford is insignificant - less then 20% of c/s. So he won't do much for now, but he never buys a ton all at once.
As for Renault Group performance:
Renault group: 2007
Revenues €40,682 million
Net income - Group share €2,669 million
Workforce (1) 130,179
Number of vehicles sold 2,484,472
Renault group: 2006
Revenues(2) €39,969 million
Net income - Group share €2,886 million
Workforce (1) 128,893
Number of vehicles sold 2,433,610
Most recent data from Nissan:
Date
Feb 01, 2008
Venue
Nissan Head Quarters, Tokyo
Nissan Motor Co., Ltd., announced financial results for the third quarter of fiscal year 2007, ending March 31, 2008, as well as for the first nine months. Net revenue rose 18.2% to 2.7701 trillion yen. Nissan's operating profit totaled 211.9 billion yen, up 15.8%. The operating profit margin came to 7.7%. The consolidated net income after tax came to 132.2 billion yen, up 26.6% compared with the same period a year ago. Nissan sold a total of 898,000 vehicles worldwide in the October-to-December 2007 period, up 13.0%.
In the April-to-December 2007 period, net revenue rose 13.9% to 7.8346 trillion yen. Operating profit totaled 579.1 billion yen, up 8.9%. Operating profit margin came to 7.4%. Net income after tax totaled 344.6 billion yen, down 9.0% compared with the previous year. Globally, Nissan sold a total of 2,714,000 vehicles in the first nine months, up 8.4% compared with last year.
"Despite the headwinds that affect our industry, Nissan has benefited from the success of the new products launched during the past 12 months," said Nissan President and CEO, Carlos Ghosn. "Although the market outlook remains volatile for the coming months, Nissan is focused and on track to deliver our full year objectives," continued Ghosn.
Nissan's forecast for the full fiscal year is unchanged at an operating profit of 800 billion yen and net income of 480 billion yen.
So Renault-Nissan are weak how exactly?
I agree that there is a lot to be done about cutting overhead costs, such as legacy, retirement, pay structure, benefits, costs of plant operations, dealers, transport of parts, final assembly, etc etc. But R&N would have made life a lot easier for GM, especially these days...it is simply not getting any easier in today's turmoil economy. Maybe GM is confident in responsibilities given to Opel and Holden in design and development, bringing commonality. Those are the right things to do - however I feel that R&N could have brought more useful data to the table.
Again I don't have a problem with Kerkorian or rich people in general who participate in investing. That's how this country was built - investing in manufacturing and constant development of industries, while at same time maintaining efficiency. And if Kerkorian is spending his own money do you not think he'd attempt to do the right thing.
Back up your claims. Again let me reiterate that I like what Chrysler, Ford and GM are doing, but any additional support should always be looked at with open eyes, and some of you guys are crying foul without really getting into details as to why. Well it's all in the details.
Reply
The Talking Hamburger 6:21PM (4/28/2008)
Until you posted the above, I was about to respond to prior posts with "Nissan & Renault may be weak companies, but at least they've got healthy sales of superior products." The companies could have complemented each other if GM would've found a merciful way to whittle down its brands and share resources.
I know I'm oversimplifying the possibilities, but imagine Titans & Armadas built alongside Tahoes and Silverados. The Cobalt sold alongside a Chevy-branded Nissan Versa instead of the lowly Aveo. The next Chevy Equinox, based off of the Nissan Rogue. And Pontiac getting a de-contented Z car to stand out from not having a Camaro sibling. And you couldn't tell me that the Chevy Volt wouldn't benefit from some Japanese and European engineering.
I think EGOS got in the way more than anything with that deal.