LAWSUIT MAY TURN VILLAIN INTO HERO

IN PROFESSIONAL WRESTLING, HEROES BECOME villains in a flash. Usually the transformation comes as a result of a surprise and generally traitorous blow to the head with a folding chair. In the auto industry, the evolution of a villain or hero is a much slower process.

Take the case of billionaire Kirk Kerkorian, DaimlerChrysler's third-largest stockholder. He has filed suit against DC, which if successful could make Chrysler an independent company once again and make Mr. Kerkorian not only an auto industry hero, but an American folk hero of Paul Bunyan proportions.

Mr. Kerkorian became a villain in Detroit circles in 1995 when he - as Chrysler Corp.'s largest investor - and former Chrysler Chairman Lee A. Iacocca attempted a hostile takeover of the company. Mr. Kerkorian's dramatic facial features were easy fodder for newspaper cartoonist caricatures at the time.

That the takeover attempt failed miserably. It made Mr. Kerkorian a Detroit bad guy and convinced Chrysler not to name its new headquarters building after the legendary Mr. Iacocca. A few years previous, Mr. Iacocca was something of a national hero for rescuing Chrysler from the brink of bankruptcy. He even contemplated running for president.

Then-Chrysler Chairman Bob Eaton emerged as a bit of a folk hero himself after fending off Mr. Kerkorian's advances.

Although the takeover attempt failed, it did expose Chrysler's vulnerabilities and may have led Mr. Eaton to make the overture to "merge" with DaimlerBenz.

When the deal was announced, it was called a "merger of equals," with Chrysler giving DaimlerBenz a place in the lower end of the global automotive market and DaimlerBenz giving Chrysler its share of the luxury market.

Despite the happy rhetoric, the deal smelled fishy from the beginning. Soon key Chrysler executives started to abandon ship, slowly at first, then in droves. First to leave was Dennis Pawley, vice president of manufacturing.

Mr. Eaton retired, seemingly trading in his hero label for that of the guy who sold Chrysler out to the Germans.

Tom Stallkamp, the procurement guru who had risen to president of DaimlerChrysler, left. Following Mr. Stallkamp was Tom Gale, whose vehicle designs helped bring Chrysler back from the ashes. Next to go was Jim Holden, who had replaced Mr. Stallkamp. More Chrysler loyalists have since been axed.

Mr. Kerkorian's case rests on the assertion that DaimlerChrysler Chairman Juergen Schrempp "blatantly lied" to stockholders at the time of the merger. Mr. Schrempp said in an October 2000 interview with the Financial Times of London that he never intended the deal to be a merger of equals, but secretly planned to make Chrysler a division of his Stuttgart, Germany-based company.

"If I had gone and said Chrysler would be a division, everybody on their side would have said: `There is no way we'll do a deal,'" said Mr. Schrempp in the article.

So just imagine how big of a hero Mr. Kerkorian would be if he could wrestle control of Chrysler back from the Germans and make it an American company again. A New York ticker-tape parade might be in order.

But make no mistake about Mr. Kerkorian's intentions. They are greed-based. He attempted to take over Chrysler in 1995 because the company's stocks weren't paying very high dividends and the company had vast amounts of cash in reserve.

His court case is similarly inspired. He sees DC stock performance waning and key executives bailing. He wants to prevent further damage to his investment.

Mr. Kerkorian's case could take a long time to resolve and has odds longer than any of the games in his Las Vegas casinos. And at age 83, he might never even see the conclusion of this legal case.

But if the case beats the odds and indeed succeeds, Chrysler could be set free of its German captors. The American employees remaining will be liberated and there will be great rejoicing. They might have a new name for their headquarters building after all.