James Kerr; Returned Ailing Avco Corp. to Prosperity

James R. Kerr, who rescued an ailing Avco Corp. from a faddist diet of life insurance, land development, videocassettes, credit cards and even movie-making--all outside its area of expertise--has died.

A spokesman for the Ludwig Institute for Cancer Research in New York, where Kerr had been board chairman since retiring from Avco in 1981, said the veteran executive was 77 and died of heart failure Feb. 8 at his La Jolla home. He had lived in that city since 1963.

Avco, which began as the Aviation Corp. of America in 1929, had fallen victim to changing demands in the late 1960s, and by 1974 was being criticized by such prestigious sources as Forbes magazine for catering to corporate fads rather than to its stockholders.

The firm had tried to branch out into videocassettes years before they became popular, had failed badly with its Carte Blanche line of credit cards and found its insurance portfolios showing horrendous declines in earnings after the crashes of 1970 and 1974.

By the mid-1970s, Avco stock had sunk from $49 to $2.

Kerr stepped in and by 1978 had Avco solidly in the black and posting rapidly rising earnings. He had divested fringe areas of its business and changed target areas of investment. Avco retreated from the area of equity issues to solid stocks and put most of its funds in A-rated bonds, commercial mortgages and government obligations.

Investment value grew to more than $1 billion while investment income tripled to $75 million.

But he paid a price, Kerr told an interviewer in 1979, two years before retiring. “I’m 61 years old, going on 90,” he said.

Kerr joined Avco in 1954 as a director of its West Coast division, was made a corporate vice president in 1959 and a director the next year. In 1961 he was elected corporation president and in 1969 became chief executive officer. He began a major restructuring of the avionics company, turning its fortunes around within a few years.

After retiring he joined Ludwig, an institute dedicated to the eradication of cancer and endowed by Daniel K. Ludwig, the shipping and container giant who was considered one of the world’s richest men when he died in 1992.

A native of Las Vegas, Kerr had helped found Sacred Heart University in Bridgeport, Conn., and was national chairman of United Community Campaigns of America, a director of the National Multiple Sclerosis Society and past chairman of the United Way board of governors.

His formal education involved only a year or two at Pasadena City College before he joined the Air Corps in World War II and was discharged as a colonel.

Survivors include his wife, Colleen, two daughters, two sons, six grandchildren and three great-grandchildren.

The family asks that any contributions be made to Catholic Charities.