Kerkorian, GM Still in Talks on Board Seat

General Motors Corp. and investor Kirk Kerkorian said Friday that they had failed to reach an agreement to seat a top Kerkorian aide on the automaker’s board of directors.

Discussions will continue, however, GM and Kerkorian’s private investment firm, Tracinda Corp., said in a joint statement.

Kerkorian, who owns a 9.9% stake in GM, has asked that longtime associate Jerome York be given a seat on GM’s board to help guide the automaker through its continuing restructuring.

GM has lost almost $4 billion this year and is preparing to close a dozen factories and other facilities and trim 30,000 jobs from its North American payroll as its U.S. market share slumps and its healthcare costs soar.

Kerkorian, whose Beverly Hills-based Tracinda is majority owner of MGM Mirage Inc., has lost about $350 million on his GM shares since he started amassing them early this year.

He and York, a former financial executive at Chrysler Corp. and IBM Corp., have worked together since Kerkorian’s unsuccessful 1995 bid to take over Chrysler.

The delay in seating York on GM’s board “is of no real consequence,” said David Cole, director of the Center for Automotive Research in Ann Arbor, Mich.

York and the GM board “have a very positive working relationship,” he said, noting that the board appointment “could still happen.”

Selecting and seating a new board member is often a lengthy process, said Maryann Keller, an independent auto industry analyst.

Whether York gets a board seat isn’t troublesome, she said.

“What I question is why [Kerkorian] wants someone on the board,” Keller said. It would hamper his ability to trade his GM shares because of limitations on insider information, she said, “and is one seat on the board going to give him that much influence?”

GM said that York, if appointed, would increase the board’s size to 13 members.

Shares of GM rose 92 cents on Friday to $22.92.