NEW YORK -- General Motors is showing early signs of a recovery in its long-suffering European auto business, GM Europe Chairman Frederick Henderson said in an interview with the Wall Street Journal in a story published on Thursday.
"There's a view the tide is beginning to turn" in Europe for the automaker, Henderson said.
Henderson, who arrived in Europe last summer, already has led GM through a bitter conflict with German union leaders last fall over the company's decision to shed 10,000 jobs there as part of a broader elimination of 12,000 GM Europe jobs by the end of this year, the newspaper said.
GM's European recovery is still fragile, and could stall, the Journal reported. The European Automobile Manufacturers Association released data this week showing registrations of new GM cars fell slightly faster in May -- down 1.9 percent -- than overall demand for new cars, which was down 1.7 percent.
GM says it still expects to post a loss of about $500 million in Europe this year and will not say publicly how it expects to do in 2006. A recovery at GM Europe also is no substitute for a turnaround in GM's much larger North American business, which accounts for more than half of GM's world-wide automotive vehicle sales, the newspaper said.
"We're on a positive trajectory, but not at an acceptable level," Henderson said.
But if GM can stop its losses in Europe, it would ease some of the pressure on Chairman and CEO Rick Wagoner as he undertakes an arduous restructuring of GM's North American operations -- and the risk that GM will provoke labor unrest in the United States with its demand that the United Auto Workers union accept cuts in healthcare benefits, the report said.
Some analysts speculate Henderson could return to Detroit to take a broader role under Wagoner. Others suggest Henderson could be a candidate to replace Wagoner if GM's board loses patience. Before moving to Europe, Henderson was head of GM's Asian-Pacific operations, where he presided over a period of rapid growth.