It seems that Ford Motors' recent travails cannot shake the faith billionaire investor Kerkor "Kirk" Kerkorian recently espoused in the new management led by CEO Alan Mulally.

For, in spite of an escape clause that would have allowed him to renege on his earlier offer of buying 20 million Ford shares at $8.50, quite a premium to its current value of $6.71, he has decided to go ahead with the tender offer he made on 28 April. The offer is slated to expire on 9 June. (See: Billionaire Kerkorian to increase stake in Ford; offers premium for 20 million shares)

When Kirkorian's investment vehicle Tracinda made the offer, one condition was that the share price shouldn't fall 10 per cent or more from their 8 May closing price of $8.20. At the time of the offer, the share price was hovering around $7.50, and was on an upswing after better-than-expected first quarter results. (See: Ford confounds analysts, posts $100 million profit in first quarter)

However, since then, the news has been anything but good. A steep downturn in sales of trucks and SUVs amid high fuel prices in recent weeks has soured Ford's outlook, prompting new production cuts, abandoning its profitability goal next year and the possibility of layoffs for 2,000 managers. (See: Ford extends cost cutting measures, may prune 12 per cent of salaried workforce)

In a major show of confidence in the current Ford management, Tracinda had then said that the automaker under chief executive officer Alan Mulally is ''starting to achieve highly meaningful traction in its turnaround efforts.'' It also applauded the company's recent results where it posted a $100 million first-quarter profit last week ''despite the difficult US economic environment.''

In Friday's statement, Tracinda reiterated it believes in Ford's management and turnaround strategy. But earlier this month, Tracinda acknowledged it would monitor Ford's situation and might from time to time propose certain business strategies. Tracinda bought its 100 million Ford shares at an average price of $6.91. The additional 20 million shares would increase its stake to 5.5 per cent.

Ford Motors is a closely held company, where Henry Ford's descendants hold 40 per cent voting power through its 71 million Class B shares. The family has two members on the automaker's board of directors, Bill Ford and his cousin, Edsel Ford II, both great-grandsons of founder Henry Ford. Bill Ford was chief executive officer from 2001 until September 2006, when he recruited Mulally from Boeing Co. to succeed him.

Since then, Mulally has tried to turn things around by pruning costs and concentrating more on the core American market, even selling off many of the company's prized, but loss-making assets. This has reflected in the balance sheet and the company expects to return to the black next year. (Also see: Ford awards CEO Alan Mulally $21.7 million for cutting losses by $10 billion)

Kerkorian is known as one of the important figures in shaping the city of Las Vegas. His Lincy Foundation, also named after his daughters Tracy and Linda, like Tracinda, has donated millions to charitable causes. As of 2008, he is estimated to be worth $16 billion, making him the 41st richest man in the world.