DETROIT -- The pressure on General Motors CEO Rick Wagoner eased some, and so did Carlos Ghosn's aura of invincibility- all in the aftermath of quarterly financial numbers released last week.
The result could be diminished enthusiasm for an alliance between GM and Ghosn's Renault-Nissan bloc.
While Nissan faltered, the numbers looked good for Wagoner -- especially the top line.
GM is progressing on one of its thorniest problems: declining sales revenue, which leaves the company unable to shoulder its huge fixed-cost burden.
Revenue was in free fall a year ago as incentives soared and buyers shifted to smaller lower-priced vehicles. A shocking 12 percent revenue plunge in North America during the first quarter of 2005 threw GM into crisis.
But in the second quarter of this year, global revenues climbed 12 percent to $54.4 billion. And while the biggest gain was in the red-hot Asia-Pacific region - where sales nearly doubled to $3.78 billion - North America delivered a hefty 5.6 percent boost, to $28.5 billion. Europe and Latin America grew by smaller amounts.
GM's North America pricing strategy has made a difference. While keeping a lid on fleet sales, GM has slashed sticker prices and reduced incentives in the 2006 model year and is raking in a lot more revenue per sale than it did a year ago. In the second quarter, the figure was about $500 more per sale on average, CFO Fritz Henderson said in a conference call with reporters and analysts. The $500 is an increase of 2.6 percent.
Roughly half the gain came from the new full-sized GMT900 SUVs, the Chevrolet Tahoe and Suburban, GMC Yukon and Cadillac Escalade. Now they're declining.
The combination of higher revenues and lower expenses got GM back on track in the quarter. Global operating profits soared to $1.2 billion, a $1.4 billion improvement over the same quarter last year. North American losses were pared from $1.2 billion in the second quarter of 2005 to $85 million.