Toyota could offer help to struggling GM

EMBATTLED General Motors, where veteran billionaire Kirk Kerkorian yesterday lifted his stake in the firm, may get help from a more unlikely source, with reports suggesting Toyota will offer the struggling US car firm assistance.

According to Japanese reports today, Toyota's president Fujio Cho will meet GM chairman Rick Wagoner in Japan on 14 May. Officially the two are due to discuss safety and environmental technology. However, the talks will be followed up in Detroit on 24 May with a visit by Toyota's honorary chairman, Shoichiro Toyoda.

American carmakers are struggling to maintain market share in the face of a relentless advance of their Japanese rivals, led by Toyota. GM's research and development chief, Larry Burns, is likely to accompany Wagoner on his trip to Tokyo.

GM posted a $1.1bn (£580m) quarterly loss last month, its worst result since it nearly went bankrupt in 1992. Earlier this week, it announced that US sales fell 7.7% in April and are off nearly 5% for the year so far, as customers shun petrol-hungry sports utility vehicles due to high oil prices.

Toyota has been monitoring the situation in the US closely and last month the company's chairman Hiroshi Okuda said voluntary price rises could ease the industry's difficulties, although a spokesman for the firm later backed away from the comments.

Despite its success in taking customers away from Detroit's Big Three, Toyota is cautious about the future in North America. It said its 14% increase in vehicle sales so far this year was unlikely to be sustained for the full year.

GM's shares which had been languishing at decade lows, soared on the news Kerkorian was doubling his stake in the company to 8.8%.

However, the carmaker responded coolly, and in a statement said it 'typically does not express a view on specific investor activity', but added: 'GM's board and management are committed to enhancing shareholder value for all of our investors.'

The company is facing a difficult battle on several fronts and if ratings agencies downgrade GM's debt to junk status, significantly higher borrowing costs would be added to that list of problems.

Kerkorian, 87, denied he has any other intention for GM than enlarging his stake for 'investment purposes', but investors piled-in after his Tracinda firm revealed it had almost £500m available to buy 28m shares.

Kerkorian was Chrysler's biggest shareholder when Chrysler's former boss, the legendary Lee Iaccoca, tried to take over that firm in 1996.