GM Board to Discuss Alliance Talks

With investors clamoring over talk about a potential alliance between General Motors (GM Quote) and two foreign-based competitors, the automaker's board plans to discuss the matter over a teleconference later this week.

While a Friday meeting was scheduled before the uproar, a GM spokeswoman said talk of the potential for a deal with Nissan and Renault will be on the front burner.

"I do believe that this recent development -- the proposal to at least think about a potential Renault-Nissan partnership -- would be among the significant issues facing the company today," said GM spokeswoman Toni Simonetti.

Talk of the partnership recently received public support from GM's foremost activist shareholder, Vegas mogul Kirk Kerkorian. His firm, Tracinda Corp., is represented on the company's board by Jerome York, whose outspoken critiques of GM's business strategies have been a catalyst for change at the automaker.

On Monday, the boards of Nissan and Renault voted to allow their chief executive, Carlos Ghosn, to explore a three-way alliance with GM. It remains unclear whether a deal with the embattled U.S. automaker would make sense for those companies. Also, GM's chairman and chief executive, Richard Wagoner, has given no indication whether he would support a partnership.

While GM has made progress in addressing its cost issues and staving off a labor strike at its bankrupt parts supplier and former subsidiary, Delphi, the company is still bleeding market share to its rivals. It suffered a 26% drop in U.S. sales in June, while Toyota (TM Quote) recorded a 14% increase, including a 22% jump in passenger-car sales.

Shares of GM were recently trading up 2 cents, or 0.1%, to $29.43.