General Motors Corp. said Wednesday it is in talks with billionaire investor Kirk Kerkorian about giving his company representation on GM’s board of directors.
GM said it had no further comment. Kerkorian’s private equity company, Tracinda Corp., also had no comment, spokeswoman Carrie Bloom said.
Tracinda owns nearly 10 percent of GM and had previously said it might approach the automaker about getting a seat on the board. Jerome York, a Kerkorian aide and a former Chrysler Corp. chief financial officer, could be Kerkorian’s choice for a board seat. Kerkorian and York worked closely together on a failed takeover bid of Chrysler in 1995.
Tracinda is based in Beverly Hills, Calif., and is the majority owner of casino and hotel operator MGM Mirage Inc.
Kerkorian, 88, the former owner of the MGM movie studio, has a history of wrestling with automakers. He sued DaimlerChrysler AG after the merger of Chrysler Corp. and Daimler-Benz AG, saying the deal cost him millions because it wasn’t a true merger of equals.
In June, Kerkorian nearly doubled his stake in GM to 7.2 percent. He continued amassing more shares in subsequent months and in October boosted his ownership to 9.9 percent.
Analysts have said Kerkorian’s presence on the board could lead to drastic restructuring measures such as plant closings and job cuts, in part because his shares have lost so much value. When Kerkorian acquired 18.9 million shares in June, he paid $31 apiece. On Tuesday, GM shares were up 65 cents to close at $23.04 on the New York Stock Exchange. They have traded in a 52-week range of $20.60 to $40.82.
GM lost more than $3 billion in the first nine months of this year and has been losing U.S. market share to foreign competitors at the same time its health care and labor costs have been rising.
The Detroit-based automaker recently announced a plan to cut 30,000 jobs and shutter 12 facilities by 2008. It also has announced a deal with the United Auto Workers that makes active and retired workers contribute more for their own health care. GM says that measure will save it $3 billion annually before taxes.