DETROIT, Dec. 7 - General Motors said Wednesday that it was holding discussions with the investment firm run by its biggest shareholder, Kirk Kerkorian, about board representation for his company.þþIt is not clear how many seats Mr. Kerkorian's company, the Tracinda Corporation, is seeking. But one most likely would go to Jerome B. York, 67, a longtime adviser to Mr. Kerkorian and a former chief financial officer of the Chrysler Corporation.þþThe negotiations, which are not yet complete, were confirmed by G.M., which declined to make further comment. A spokeswoman for Tracinda also declined to comment.þþTracinda, which owns 9.5 percent of G.M.'s stock, indicated in a September regulatory filing that it might seek board representation. þþBut before G.M. will go along, the company is insisting that Mr. Kerkorian agree that he will not increase his stake, a person who was briefed on the discussions said Wednesday.þþG.M. also wants Tracinda to sign a confidentiality agreement that would restrict its use of information gleaned about the company, this person added. G.M. would not comment.þþThere was no indication when the talks would conclude. But Michael Useem, a professor at the Wharton School of the University of Pennsylvania, said it appeared inevitable that Mr. Kerkorian would succeed.þþÿThe big investors leave companies alone if they are not in trouble,ÿ Professor Useem said. ÿBut if there is a significant fall from grace, it brings out the spirits.ÿ þþHe went on, ÿIf it weren't Kerkorian, it could be somebody else these days, given G.M.'s condition.ÿþþG.M., which has lost more than $4 billion this year on its North American operations, is under pressure to reverse its losses. Two weeks ago, G.M. said it would cut another 5,000 jobs, on top of 25,000 jobs it previously said it would eliminate. It plans to close all or part of 12 plants during the next three years.þþOn Tuesday, G.M. said Frederick A. Henderson, a veteran G.M. executive, would succeed its chief financial officer, John M. Devine, a former Ford executive.þþG.M. shares rose 65 cents yesterday, to $23.04, but fell in after-hours trading. Mr. Kerkorian, a billionaire investor, is a long way from making money on his investment. His company bought about 22 million shares at prices of $25 to $27; nearly 19 million shares at $31; 8 million shares at $35; and a little over 5 million shares at $35.71.þþThe push by Mr. Kerkorian to land representation on the G.M. board brings to mind his successful effort a decade ago to win a board seat at Chrysler, where he was the biggest shareholder before the company's 1998 merger with Daimler-Benz. þþMr. Kerkorian had started a takeover bid for Chrysler, assisted by its former chief executive, Lee A. Iacocca, that eventually failed. Although Mr. York advised Mr. Kerkorian, he did not represent him on the Chrysler board.þþIf Tracinda gets only one board seat, Mr. York may not have much influence by himself, Professor Useem said. Thus far, the G.M. board has solidly supported Rick Wagoner, the chairman and chief executive. ÿTo be the sole critic can be really difficult,ÿ Professor Useem said. þþAlong with the discussions on representation for Tracinda, G.M. is holding talks with its former parts unit, Delphi, on an assistance package for Delphi. þþDelphi, the country's biggest auto parts maker, filed for Chapter 11 bankruptcy protection in October after it failed to agree with G.M. on a bailout deal said to be worth $6 billion. About 4,000 Delphi workers would have the right to return to G.M., which spun off Delphi in 1999, if jobs were available. þþThose talks recently accelerated and may conclude soon, people who were briefed on the discussions said Wednesday. Delphi has delayed seeking permission from a bankruptcy court judge to set aside its labor contracts and impose sharply lower rates on 24,000 workers in the United States. þþOn Wednesday, a United Automobile Workers vice president, Richard Shoemaker, told union leaders that a strike appeared ÿmore likely than not,ÿ according to Paul Krell, a U.A.W. spokesman, who attended the meeting. But Mr. Krell added, ÿThat can change, and we hope it does,ÿ according to The Associated Press.þþ
Source: NY Times
