By Kevin Krolicki
DETROIT (Reuters) - Jerry York, a former General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) board member and adviser to billionaire investor Kirk Kerkorian, said on Sunday GM had made substantial progress in its turnaround, while a merger with a foreign automaker was likely down the road for Chrysler LLC.
York, who resigned from GM's board of directors just over a year ago, said the No. 1 U.S. automaker had made deep cost cuts but needed to do more to slow and reverse a loss of market share in recent years.
"I think GM has made a lot of progress. They're well on their way to taking $9 billion out of their structural costs," York told the Reuters Auto Summit. "They have this new labor contract that will save them several-billion dollars each year, but again the 64-dollar question, if you will, is attenuating market share loss."
York, a former Chrysler chief financial officer who also advised Kerkorian's Tracinda Corp in a failed bid for the No. 3 U.S. automaker earlier this year, said Chrysler would likely be spun off after its own turnaround shows results.
The carmaker is now majority owned by Cerberus Capital Management CBS.UL, and York speculated on the private equity firm's strategy for his former employer.
"My best guess would be that it is to fix up the company, get it back to profitability and then merge it with a foreign automaker," York said.
York said Cerberus would need four years to turn around the company's financial performance to ready it for a merger. "They have got a four-year fixer-up job to do," he said.
York, who had served as Kerkorian's representative on GM's board, had lobbied the automaker to sell its Saab and Hummer brands and resigned after GM decided to end talks with Renault-Nissan over a proposed alliance. Continued...
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