Pan Am Unions Ask Kerkorian to Invest in Ailing Airline

Millionaire investor Kirk Kerkorian has been approached by Pan American World Airways’ unions to see whether he might be willing to invest in the struggling carrier, The Times has learned.

Whether Kerkorian is interested in such an investment and whether he has met with representatives of either the unions or the airline could not be learned Thursday.

Terry Christensen, newly appointed president of Tracinda Corp., Kerkorian’s Los Angeles-based holding company, declined to comment on the reports.

Pamela Hanlon, a spokeswoman for Pan Am, said there had been “rumors and speculation about many” possible investors and “we are just not commenting on any of them.”

It is known that the unions representing most of the airline’s employees met last week with Anglo-French financier Sir James Goldsmith to discuss a restructuring of money-losing Pan Am, the only major U.S. airline that has not merged with another since the industry was deregulated almost a decade ago.

When it disclosed the discussions with Goldsmith last week, the coalition of labor unions at Pan Am said it was also talking with other unidentified parties about investing in Pan Am.

On Thursday, Tom Lambert, president of the Pan Am chapter of the Flight Engineers International Assn., said the coalition had been told by its investment bankers, Drexel Burnham Lambert, that others had been approached.

“They allowed us to go public with Goldsmith but they did not allow us to publicize the others,” he said.

Kerkorian has a long history of involvement with the airline industry and is about to inaugurate service on a new carrier called MGM Grand Air. It will fly between Newark, N.J., and Los Angeles starting next month and will offer only first-class service.

Kerkorian began his air carrier career right after World War II, flying gamblers to Las Vegas in a surplus B-26 bomber. In 1948, he founded Transamerica Corp. and from 1969 to 1976 he was a director of Western Airlines and its major shareholder. At one point, he tried to merge Western with American Airlines but the deal fell through.

Over the years, he has had extensive holdings in casinos, hotels and movie companies. His wealth was recently estimated at $600 million, placing him among the top 75 on Forbes magazine’s list of the 400 richest Americans.

The Pan Am Joint Labor Coalition’s discussions with Goldsmith reportedly involved proposals for a restructuring of Pan Am and an investment by Goldsmith of at least $100 million.

Earlier this week, Goldsmith sent some associates to the airline’s New York headquarters to study its financial situation and help him decide whether to make a major investment in an effort to turn the ailing company around. Pan Am is reportedly cooperating with Goldsmith’s people.

The financier met last week with C. Edward Acker, chairman of Pan American Corp., the airline’s parent; Acker, in an interview, would not disclose the substance of the talks.

Goldsmith would be limited to an investment of less than 25% in Pan Am because U.S. law prohibits any larger investment in U.S. airlines by foreigners.

The Pan Am unions, representing pilots, flight engineers, flight attendants and Teamsters, have been at odds with management for some time. They have been shopping for an outside investor who would come in to restructure the company and oust current management.

Earlier this year, Pan Am rejected a proposal by the union coalition for a financial restructuring of the company that, the unions said, would save $600 million a year while giving the unions a one-third equity in the airline.