GM talking to Kirk Kerkorian

[PARAGON]

DETROIT, Dec 7 (Reuters) - General Motors Corp. <GM.N> said on Wednesday it was in discussions with billionaire investor Kirk Kerkorian's Tracinda Corp. for a seat on its board of directors.

GM spokeswoman Toni Simonetti said the company had no further comment.

Analysts have said the likely candidate for a seat on GM's board would be Jerome York, the former chief financial officer at Chrysler Corp., now a unit of DaimlerChrysler AG.

Tracinda has spent $1.7 billion since April to buy 56 million shares of GM stock, about 9.9 percent of the total stock available.

Tracinda declined to comment.

GM's Chief Executive Rick Wagoner has been under mounting pressure as the world's largest automaker grapples with high labor and commodities costs, loss of U.S. market share to foreign rivals and slumping sales of large sport utility vehicles -- its longtime profit generator.

GM has lost nearly $4 billion this year, while its shares have lost more than 45 percent of their value amid wide speculation that Kerkorian would ask for a seat on the automaker's board.

York is a veteran of large-scale turnaround efforts at Chrysler and IBM, where as chief financial officer he led a rigorous cost-cutting effort.

If Kerkorian gets representation, GM will have an extremely vocal shareholder, T. Rowe Price analyst Brian Ropp said.

"Kerkorian will focus on what is best for GM's shareholders, which can conflict with GM bondholders, GMAC bondholders, and the UAW," Ropp said, referring to the United Auto Workers Union.

"It will make things very interesting."