N. America boosts GM 1st-quarter results

Associated Press

DETROIT

High costs and falling sales in Europe weighed on General Motors’ first- quarter profit.

The world’s largest carmaker earned less than a third of what it took in a year earlier, even with a big profit from its bedrock market in North America.

Troubles in Europe hurt the company during the first three months of the year. The region likely has fallen into recession, hit by huge public debts, austerity measures and rising unemployment. And GM’s costs in Europe are high because it has too many factories and employees. Union contracts and laws make it difficult to save money by firing workers and shutting down plants.

GM said Thursday it earned $1 billion, or 60 cents per share, in the quarter. That compared with $3.2 billion, or $1.77 per share, a year earlier, when earnings were boosted by the sale of GM’s stake in a parts company.

North America clearly is pulling the company along. GM earned a combined $1.7 billion before taxes in the U.S., Canada and Mexico. Sales rose by 19,000 vehicles to 703,000, and the company got higher prices for cars and trucks.

But even with that strong performance, GM gave a cautious outlook for North America. It predicted that results from April through September would be similar to the first quarter. That’s because it temporarily will close its U.S. pickup-truck factories to prep them for a new model that comes out next year.

In Europe, GM lost $256 million before taxes, and it took a $590 million charge due to a change in pension values.

“The U.S. economic recovery, record demand for GM vehicles in China and the global growth of the Chevrolet brand helped deliver solid earnings for General Motors,” Dan Akerson, chairman and CEO, said in a statement. “Europe remains a work in progress.”

Besides North America, there were other bright spots for GM. The carmaker earned $83 million in South America, helped by new models for the region. The company earned $529 million pretax in Asia.