GM Discusses Board Seat
With Kerkorian's Tracinda
dg >> I wonder how Americans would react if Toyota wanted to buy an American car maker or buy a bunch of their auto plants?
By JOSEPH B. WHITE
Staff Reporter of THE WALL STREET JOURNAL
December 7, 2005 5:59 p.m.
General Motors Corp. confirmed it is in discussions with Tracinda Corp., the investment company controlled by Las Vegas billionaire Kirk Kerkorian, about giving Tracinda a seat on GM's board of directors, a GM spokeswoman said.
Tracinda, which controls a 9.9% stake in GM's common shares, indicated earlier this year it might seek a board seat. The likely nominee would be Jerome York, the former Chrysler Corp. and IBM Corp. finance executive.
GM had no comment on whether it had formally offered Tracinda a board seat. Representatives for Tracinda couldn't be reached for comment.
Tracinda acquired a large chunk of its shares in a $31 a share tender offer. GM shares have traded well below that level in recent weeks, as concerns have mounted about the pace of the company's efforts to reverse losses in its North American auto operations. GM shares rose in late trading after Automotive News reported on its Web site that GM had offered Mr. York a board seat.
Shares of GM rose 65 cents, or 2.9%, $23.04 in 4 p.m. composite trading on the New York Stock Exchange.
It's not clear whether GM has proposed that Tracinda accept conditions, such as an agreement not to acquire more shares, in return for a board seat.
During the mid-1990s, Mr. York, then Tracinda's vice chairman, led a campaign to put pressure on Chrysler's management to take steps to boost the share price and return a larger chunk of its cash hoard to shareholders.
Mr. York is also a veteran of large-scale turnaround efforts at Chrysler and IBM, where as chief financial officer he led a rigorous cost cutting effort under IBM's then chief executive Louis V. Gerstner.
The news comes on the heels of the board's decision to name Fritz Henderson, currently head of GM's European operations, as a replacement for John Devine as chief financial officer starting in January. Henderson takes the new role as GM struggles to remake its North American operations |
