By William C. Rempel
The rags-to-riches story of Kirk Kerkorian, the billionaire son of illiterate immigrants from Armenia, reads like a fairytale that opens dark and foreboding.
He was a child of five when his family lost the farm to foreclosure. As a transplanted city boy he sold newspapers for pennies, worked odd jobs to support his struggling parents and dropped out of school after eighth grade. As a skinny teenager with a powerful right hook he tried amateur boxing and hoped to go pro, confident he could help the family with winnings from his fights. An older brother had already suffered brain damage in the ring. As a young man he dreamed of flying but had neither money nor a high school diploma needed for flight training. So, he offered to do farm chores— shoveling manure and milking cows— in trade for tuition and an admission waiver to an air academy.
It turned out to be a timely and brilliant bit of deal making. After a few months in class and in the air, Kerkorian earned his wings and a pilot instructor’ s license, effectively launching a long and eventually lucrative career in aviation. It not only saved him from physical punishment common in the fight profession, but it also set him on course for the highest ranks of the super rich.
The happier ending didn’ t come easily or overnight. First, World War II intervened. Kerkorian served as a contract pilot for the Royal Air Force Ferry Command out of Montreal. He flew a wide range of factoryfresh bombers from Canada to Britain for about $ 1,000 per dangerous crossing. More than 500 fellow crewmen perished, many of them following— as did Kerkorian— a treacherous polar route with only the stars as navigational aids. The daring young aviator completed more than 30 transits, some more harrowing than others, and some to destinations as far away as India.
The savings he accumulated by war’ s end helped finance a one-plane air charter service back home in Southern California. He nursed and grew it through rollercoaster business cycles for the next two decades, serving on some trips as the ticket agent, cleanup crew, flight mechanic, gas pump operator and pilot.
During particularly difficult economic times, Kerkorian would sometimes shut down operations completely, keeping the company alive and bread on the family
table by wheeling and dealing in used planes. One notable junk plane deal turned two wrecks into one of his most profitable aviation trades.
In the early 1950s, Kerkorian acquired the damaged remains of two Lockheed Constellation aircraft— one from Air France and the other from British Overseas Airway. Both had been crippled by hard landings with no passengers aboard. Both had been declared total losses by insurance adjusters. One had a mangled left wing and the other a crumpled right wing. Kerkorian bought them both, shipped them to Bayonne, New Jersey, and with the help of Lockheed technicians used the good parts of each to reassemble a single airworthy replacement.
The master dealmaker went on to lease and eventually sell and re-sell the cannibalized“ Connie” multiple times— including to El Al Israeli Airlines— earning Kerkorian five times his investment.
One key to Kerkorian’ s life-long business success was adaptability. He always advocated having a Plan B … or“ keeping a back door open.” It was a tactic and a trait he developed growing up on the fringes of poverty when serial evictions, frequent moves and being the new kid in school
“ Rifle Right” Kerkorian at age 18 or 19.
were familiar parts of his everyday life.
During Kerkorian’ s long run as an air charter operator, his love of gambling also flourished. Much of his early business was flying gamblers over the mountains between Los Angeles and Las Vegas. He became a regular at many of the casinos— and a skilled craps player as well. He became widely known about town and on the Strip for two highly-respected traits: First, he always paid his markers( gambling debts); second, he never showed his emotions. It was impossible to know from watching him whether Kerkorian was winning or losing. Other gamblers compared him to a cool crooner of the day, calling him“ the Perry Como of the craps tables.”
Growing up poor and without possessions gave him a certain comfort with risk. He subscribed to the philosophy of his professional gambling friend Nick“ the Greek” Dandolos, who said the greatest thrill in life was winning a big bet. The second greatest thrill … was losing a big bet. Outwardly, Kerkorian seemed indifferent to losing. He had survived poverty. He wasn’ t afraid of it. So, his cool-on-theoutside gambler persona had its roots, too, in those humble beginnings.
Courtesy of Ron Falahi
22 FINANCIAL HISTORY | Summer 2018 | www. MoAF. org