It takes real nerves to invest in American automobile stocks these days. The big three American manufacturers have been struggling for many years now and their combined losses run into tens of billions of dollars. Chrysler is busy scaling down its model line-up to stem losses while GM and Ford continue their restructuring. GM lost a whopping $3 billion during the last quarter. The US economic downturn has started affecting even foreign car makers like Toyota and BMW.

But, a 90-year old billionaire seems to think that at least some auto companies are on the right path and can fetch him good returns. Kirk Kerkorian, the billionaire who made his money investing in property and movie studios, first developed a fancy for auto companies a few decades back. He twice tried to acquire Chrysler, but was spurned. Following Chryslers takeover by Daimler, Kerkorian sued the company for misleading investors. He failed again.

Undeterred, he acquired a big stake in GM a couple of years back and tried to force the company into an alliance with Carlos Ghosn’s Renault – Nissan. That also came a cropper and now Kerkorian has turned his eye on Ford. He has acquired close to a 5 per cent stake in Ford and has made a tender offer for another per cent. His optimism may not be misplaced. Ford is shedding divisions at a fast pace to cut costs. After the sale of Jaguar and Land Rover to Tata Motors, Ford is now expected to sell Volvo and Mercury over the next year or so. The company even turned in a profit during the first quarter, even if a modest one. Mr. Kerkorian must have been pleased.

While Kerkorian was building his Ford stake, Warren Buffet was busy bankrolling the $23 billion acquisition of chewing gum maker Wrigley by confectioner Mars. Buffet’s Berkshire Hathaway will pick up a minority stake in Wrigley and extend funding of nearly $4.5 billion to Mars to finance the deal. The Oracle of Omaha is in his late seventies and is showing willingness to do big-ticket deals when other investors are even scared to test the waters.

The senior billionaires seem to have invited themselves to a party. Who cares if the world is in the middle of a full-blown credit crisis!