GM in talks with other automakers on Onstar

DETROIT (Reuters) - General Motors Corp(GM.N), just weeks from a deadline to restructure its operations, is in talks with other automakers to provide its OnStar telematics services to rivals, the division's president said on Wednesday.

GM began reaching out to rivals late last year about the profitable OnStar service and talks with other automakers center on partnering mainly in the United States, OnStar President Chet Huber told Reuters in an interview.

"We made a few phone calls," Huber told Reuters said. "We did some outreach."

OnStar is wholly owned by GM, which is surviving on U.S. government loans. It faces a June 1 restructuring deadline set by the Obama administration for it to reach agreements with all of its key stakeholders, including bondholders who have criticized GM's plans for a debt exchange.

Should the restructuring fail, GM would join U.S. rival Chrysler in bankruptcy.

GM first offered OnStar to drivers in 1997 and in 2005 announced that the service would be a standard feature for all of its retail customers in the United States and Canada.

OnStar, which is capable of alerting emergency services when air bags deploy, assisting authorities in locating stolen vehicles and remotely unlocking doors when keys are left inside, was seen as a way for GM vehicles to differentiate themselves in the crowded U.S. market.

But with No.1 U.S-based automaker GM reviewing all of its options, executives have said that everything is on the table.

GM already has at least three major assets up for sale, including the Hummer, Saab and Saturn brands. The automaker has not publicly announced any plans regarding its OnStar division.

"GM, I am sure, has considered and will continue to consider a range of options for what it considers to be assets," Huber said. "We are planning our business as though we have continued operations throughout."

Huber expects OnStar to double its subscriber base in the next four years from the 5.5 million it had in the United States and Canada last year, excluding any volume gain from partnerships with other automakers.

OnStar "today is highly profitable for General Motors," he said.

GM does not break out its revenue or profits from OnStar, but had said the division had turned profitable in 2003 and has been steadily and more profitable since. The division receives part of its revenues from consumer subscription fees.

Industry tracking service iSuppli estimates that OnStar generates $1 billion in revenue per year. The automaker's 2008 total revenues were $149 billion.

OnStar also plans to expand its presence internationally and is getting ready to launch in China later this year through a joint venture with Shanghai Automotive Industry Corp.

OnStar is facing growing competition from Ford Motor Co's (F.N) Sync program and other automakers that are moving to provide telematics in their vehicles.

Chrysler is partnering with Hughes Telematics while Toyota Motor Corp(7203.T) recently began offering a system called Safety Connect on some models.

OnStar previously had partnerships with Honda Motor Co's Acura brand, Toyota's Lexus, Volkswagen AG and Audi but decided to pull back from those relationships.

(Reporting by Poornima Gupta and Kevin Krolicki)