MGM Mirage majority owner Kirk Kerkorian is looking for a bigger stake in the company, reports MarketWatch. His investment vehicle, Tracinda Corp., has offered to buy 15 million shares at $55 each.

The news has sent the stock higher, pushing towards the target price. The offer will cost Kerkorian $825 million to take his stake in MGM Mirage from 56 percent to 61 percent. The early word from analysts is that Kerkorian sees the company as undervalued, especially in light of its dominant position in the luxury Strip property market. Recent results were up strongly on that sector.

The news has created a lot of nervousness in Detroit. If Kerkorian is moving into MGM, could he be moving out of GM? A few of the automaker’s shareholders think so and started unloading what was already a sliding stock. The main threat, however, is the United Autoworkers’ early intransigence about next year’s contract negotiations, the wire service reports.

Late breaking update: Tracinda has filed to sell 14 million GM shares, which will push the price even further down, reports MarketWatch.

Managers often complain about the pressure of quarterly results with all the analysts breathing down their necks but it gets a whole lot worse when your predecessors have saddled you with a union and an old-fashioned labor contract. The UAW constituency has no reason to care about the survival of the company. The union’s members are mostly interested in milking what they can out of it now. The old automakers are stuck where they are because of those contracts. It might be better for the union think of a strategy that would maximize the long-term prospects for the company before it ends up, like United and Delta, in bankruptcy where GM will be able to jettison the old dead parts of the company and preserve and remake the profitable parts.