89-year-old Billionaire Bids for Chrysler

Apparently it takes an 89-year-old to figure out what's really needed to fix the ailing U.S. auto industry — a long-term plan that goes straight to the root of Detroit's persistent challenges.

At least that's what billionaire Kirk Kerkorian proposed, when his Tracinda Corp. made a surprise $4.5 billion cash bid for Chrysler on Thursday. In outlining his plans for the automaker, Kerkorian offered no quick fixes for the company, and instead served up a seven-year plan aimed at turning Chrysler around by the time he turns 96.

Having been spurned by General Motors, Kerkorian is looking again to Chrysler to fulfill his decades-long quest to become an auto industry titan. And this time, he might actually have a shot.

Not only does the Kerkorian bid come packaged with an employee ownership plan that would draw out billions in labor and retirement concessions, it also comes with the promise of quality improvements, faster product development and the production of more green vehicles. In other words: Real goals that Tracinda readily admits will take many years to achieve.

The bid also contrasts sharply with the structure and intentions of Chrysler's other likely suitors — the leveraged buyout firms of the Blackstone Group, Canterbridge Partners and Cerberus Capital Management, who are said to be in the running for the automaker. Not long ago, no so-called private equity firm would ever dream of leveraging such an economically-sensitive company with a focus on fast results.

Cheap and abundant credit in recent years has changed that equation, but it now looks like the days of easy money are coming to a close. If so, a private equity buyout could lead to the end of Chrysler as we know it.

Indeed the news this week only underscored the need for a long-term, Japanese-style approach to Detroit's woes. Not only did America's big three each report single-digit sale declines for the month of March, but Toyota once again left its competitors in the dust, posting an 11 percent sales increase on record sales of its hybrid vehicles. Adding to the angst in Motor City was the surprise ruling by the Supreme Court, that could dramatically speed up demand for environmentally-friendly vehicles.

Perhaps that's why Wall Street vigorously applauded Kerkorian's audacious move on Chrysler late Thursday. As news of the deal spread, Daimler Chrysler stock rallied 5 percent on the day, closing at the highest level since July 1999.

No doubt, old Kirk has plenty of tricks up his sleeve and a fair amount of financial engineering in his offer, but his decades-long interest in Detroit and his willingness to stay in for the duration has a nice appeal to it — even if he is turning 90-years-old on June 6.

Terry Keenan is anchor of Cashin’ In and is a FOX News Channel business correspondent. Tune in to Cashin' In on Saturdays at 11:30am and find out what you need to know to make your money grow and keep what you already have!