GM Votes to Step Up Talks on Hughes Deal

Eager to unload its Hughes Electronics subsidiary, General Motors Corp.’s board of directors voted Tuesday to authorize stepped-up talks with Rupert Murdoch’s News Corp.

The No. 1 auto maker has been looking to shed the electronics company as it focuses on its primary business--vehicles, said GM spokeswoman Toni Simonetti.

News Corp. wants Hughes’ DirecTV satellite business because it would fill a major gap in the coverage area of Murdoch’s global satellite TV network.

Through BSkyB and various other subsidiaries, Murdoch’s satellites already reach much of Asia, Europe and Latin America.

Hughes, based in El Segundo, is the largest satellite TV operator in the United States. DirecTV has nearly 10 million subscribers.

News Corp. spokesman Mickey Weinstock said the company had no official reaction to the move by GM’s board, but said a News Corp. acquisition of Hughes would solve “the American piece of the puzzle.”

The companies have had on and off discussions since last year, but a logjam was apparently broken last week when Murdoch made a personal sales pitch to GM executives.

But a source close to the talks who spoke on condition of anonymity said there was an “expectation” a deal would be struck between the two companies.

While focusing on talks with Murdoch’s company, GM has unspecified “alternatives” if the deal falls through, Simonetti said.

Simonetti said GM wants the deal arranged in a way that will allow the company to avoid large tax penalties or harm to its credit rating.

Shares of GM closed up 31 cents to $55.12 at the close of trading on the New York Stock Exchange, but in after-hours trading, shares fell 12 cents to $55.