"LET THERE BE SUNSHINE"

Donald Trump did speak about Kirk Kerkorian. He referred to the 650 billionaires on the entire globe, out of the 6 billion inhabitants. He talked about himself, but including Kerkorian.

How does one become a billionaire? And more importantly, how does one prove he is a billionaire? Kirk Kerkorian, the son of Armenian immigrants to the United States, has probably remained in the limelight for the last forty years for buying and selling MGM, United Artists, and various Las Vegas hotel properties. He is a true billionaire.

He is a man, however, who is unique among all the billionaires in the world. He is 89 years old and he is not about to retire. But that we will talk about later. Mr. Kerkorian, at the age of 89, decided to face up to the biggest challenge of his life. He probably wants to be the biggest factor in the current most damaged industry in the world, the automobile industry. He bought 9.9% of General Motors after the world's largest automobile company lost $10.5 billion in the year 2005, and various entitlement programs, pension commitments, and was delegated the company to junk bond status.

I never had the opportunity to interview Mr. Kerkorian, although I will pick up the challenge and write to him. Writing to big-time politicians or wealthy people, approaching them for an interview or meeting has played credit to my system. I met Bunker Hunt, the late John B. Connolly in 1979, and former President Richard Nixon in 1981. I would like to meet Mr. Kerkorian. After all, we are both immigrants.

Mr. Kerkorian, if I have to make a guess, foresees the opportunity in the international automobile industry at a time when every newspaper man and securities analyst talks about nothing but the demise of General Motors. With his knowledge of corporate history, he sees General Motors as an opportunity. The company has a market capitalization of $18 billion, which is a negligible factor of Bill Gates' Microsoft, $280 billion. Come to think of it, the personal savings of Warren Buffet and Bill Gates are altogether $60 billion, twice the market value of General Motors.

I think he first saw the tremendous franchise value and national interest in General Motors. I would say in the past, but certainly in Mr. Kerkorian's lifetime, there was a statement: "What's good for General Motors is good for the country." In his lifetime, President Eisenhower appointed Chairman Wilson of General Motors the Secretary of Defense. In his confirmation hearing, the future Defense Secretary refused to sell his General Motors shares.

After the Second World War, General Motors represented America's pride. General Motors cars were running in the newly built highways and they represented what was the best in America when everybody went to see "The Man in the Gray Flannel Suit."

Does Mr. Kerkorian see some upside in General Motors again? As a trained stock market player, he probably says, "How low can $18 billion drop"?

There are now changes, voluntary and involuntary, in union contracts. There are plausible plans to offer for workers to retire and collect everything in a lump sum. There are, with the cooperation of the government, with the cooperation of the oil companies, a whole series of programs -- ethanol, methanol, corn syrups, bio oil, bio diesel -- all replacing ten, twenty percent of the oil use for automobiles. There are, particularly in the long term, steps to change the size and structure of the automobile business. There are the three billion capitalist workers in the Far East providing the eventual work horse for America's industrial program. Well, it is a potential market. India is one billion, China 1.3 billion, and North America is 315 million.

Not to forget, there are the growing international markets. The Chinese will build 100 million new cars as opposed to the 10 million they have today, according to the Chinese prime minister's speech in the U.S. only two months ago. These are, disregarding the short-term problems, an ideal marketing opportunity.

If there is a will, there is a way. For Mr. Kerkorian, the current 9% of General Motors represents a few billion dollars and represents a manageable portion of his life savings. The financier, always calculated in macro economic multi-hundred-million-dollar terms, brings in Nissan and Renault from Japan and France, each 10% owner of General Motors. When this transaction is signed and delivered, the world will discover that the 89-year-old Kerkorian who has exhibited nothing but brilliant financial acumen in his previous transactions, has pulled off another great deal.

Together, General Motors, Renault and Nissan represent 21.9% of the world's automobile production. Toyota follows with 12.3%, Ford with 9.4%, Volkswagen 7.9%, Daimler-Chrysler 7.3%, and Honda 5.6%.

When these transactions are culminated, the 30% represents 14.3 million cars in 2005, one-third of the world's automobile production, at a time when in ten years because of the Far East, this number could actually double. We can then talk about the 25 million or 20 million yearly automobile production. Twenty million is probably too low, but let's use it. Giants like GM, Renault and Nissan always, particularly if they are profitable, always can save money, particularly if they eventually dominate 25% of the world's automobile production.

The market is not only growing, the actual composition of the industry is changing, and the changes are manageable. This is what this 89-year-old financier has foreseen. He actually wants to have control of 30% of the world's automobile production, and he foresees that in five years the industry will move from its dismal state into the era of opportunities, the era of positive changes, and it will move into a much bigger market than mankind has seen in the past fifty years.

To Kerkorian the current problems are the neglectful behavior of a 50-year-old boom starting with August, 1945. After 30% of GM is acquired, he sees the automobile production of new measures, new incentives, new tools, into a much bigger market than it is today.

So let's add up the numbers. The world will produce 80 million cars, 20 million by the triumvirate. Let's assume that like in France, over 200 years ago, the first consul of the triumvirate will be Kirk Kerkorian. Delivering 20 million cars a year at a low average price of $30,000 by 2005, we are talking about a $600 billion business. That $600 billion business will be profitable and will be at the end of the first decade of the 21st century.

After acquiring 30% of General Motors, my assumption is that Mr. Kerkorian will go for another 5%. By the year 2010, Kerkorian will be 95 years old. He would then control a $600 billion staggering business with 20 million cars, with expansion opportunities in many countries, and the new world may very well, five years later, ten years from now, accommodate his share of the automobile market, not with 20 but may 25 or 30 million cars. So the empire will reach one trillion dollars per annum. Mr. Kerkorian would be 100 years old.

The world according to the son of an Armenian immigrant, is as full of sunshine as Las Vegas ten months of the year. The greatest beneficiary will be the American government. The President will ask Mr. Kerkorian to make a statement in the Joint Session of Congress. Let's face it, Kerkorian may state that as far as Social Security is concerned, the average age could be moved up to 100.

(Article 32 - posted July 12, 2006)

e-mail: mlikar@aol.com

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