Back in April, Kirk Kerkorian claimed he wanted to buy an extra 20 million shares of Ford Motor Co. That would have given him a total of 120 million shares and 5.6% of the Dearborn-based automaker. We learn today that Kerkorian took advantage of the demand for his offer of $8.50 per share and bought more than twice the amount of shares he originally intended. Tracinda Corp., Kerkorian's investment company, now owns 140.8 million shares of FoMoCo and a 6.49% stake in the automaker. He also now has a full $1 billion invested in the Dearborn automaker and has made it known that he is behind Ford's turnaround effort. This increased investment is surely putting your money where your mouth is.
The filing with the Securities and Exchange Commission hints that Kerkorian might sink more funds into Ford in order to save its money-losing U.S. operations. Kerkorian will also likely be in a position where he feels comfortable suggesting business strategies to get Ford back in the black. That could make him what they call an activist investor, a title Kerkorian's held at Chrysler and GM in the past. So much for those theories that he might remain hands-off.
Ford CEO Alan Mulally, Executive Chairman Bill Ford and Kerkorian just met a couple of days ago to talk about Ford's turnaround plan. Now that Kerkorian owns more of FoMoCo than the Ford family itself who owns just 3%, some might be scared by the quick move Tracinda has made. Never fear for the Ford family, however, as their minor stake is comprised of a special class of stock that gives them 40 percent of the voting power.
[Source: Automotive News, sub req, Photo by KAREN BLEIER/AFP/Getty]
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Reader Comments (Page 1 of 1)
4agze @ Jun 19th 2008 2:49PM
America for sale 25% off
Matt @ Jun 19th 2008 3:19PM
Wow...that guy is a complete fool...
Reader @ Jun 19th 2008 3:41PM
I would agree, except he managed to become a billionaire from nothing, so he must know what he's doing.
Sam @ Jun 19th 2008 3:29PM
Go Kirk...it's ya birthday...go Kirk...it's ya birthday
LDMAN @ Jun 19th 2008 4:46PM
He might know something we don't or it is simply that a lot of European OR Asian companies might want to buy one of the down on their luck 2.8 to (re)-enter America with small, fuel efficient car. Look at the ones that are absent. PSA (Peugeot and Renault), Fiat, etc...
Jobu37 @ Jun 19th 2008 7:07PM
There has been alot of rhetoric regarding Kerkorian's intentions regarding his position in Ford. Most of it negative. However, what exactly could he suggest that Ford do to turnaround their operations that has not already been done? He doesn't have the power to force a merger unless the family gives up control and there are already members of the family willing to buyout any of their kin wanting out so that is a dead issue. Besides his favorite merger company is Nissan/Renault and they are already moving towards a merger with Chrysler. This could and most likely is a pure speculation play that is based on comparative analysis of the auto industry and it is his determination that it is Ford that has the most upside potential. The only thing holding Ford back is their inventories of Trucks and SUVs. The Fusion/Milan/MKZ sales are going to outstrip demand when they hit the market in December. The Focus will sale however many they can build at this point. The Fiesta a year and a half down the road is going to be the hottest car to hit the U.S. market since the Taurus back in '86. They have strategy in full size pickups that appears to trump anything that their counterparts are trying. They are the domestic quality leader and look like they are a year away from dethroning Toyota as the overall champ. Porsche and Lexus don't count since they are not mainstream vehicles. The MKS will provide volume at Lincoln that has not existed for years. For Lincoln it is a whitespace product that appears to be well accepted by the buying public since they already have 10K preorders at the retail level. The only wildcard short-term is the Flex. Anything below 60k in the first 12 months will be considered a failure and the current market does not bode well for such a pricey vehicle. And internationally they are launching two very highly anticipated vehicles in Europe in the Fiesta and Kuga a couple of months down the road. They are one of the fastest growing companies in China. Their South American plants are running at full out capacity. Anykind of stabilization of the U.S. market at all will lead to Ford's shares appreciating in value. If they need a cash infusion in the short term Captain Kerk has offered to give one. None of this even takes into account their quick and decisive move to start building European models in the U.S. with the next year. They have made the right moves and they and Kerkorian will benefit eventually.