DETROIT -- Europe's weak economy and debt crisis is stalling General Motors' comeback bid there, forcing GM to rely on stout pricing in North America to drive profits.
Last week GM reported third-quarter net profit of $1.73 billion, a 12 percent drop from the year-earlier period. Revenues rose 8 percent to $36.72 billion.
After posting its first European net profit in years in the second quarter, GM lost $292 million in Europe in the July-September period despite higher unit sales and revenues.
The trouble in Europe was one reason GM issued a fourth-quarter profit forecast softer than many analysts expected. GM said it no longer expects to break even in Europe for the year before restructuring charges, which had been its goal.
"We're not expecting to get bailed out by a big ramp-up in volumes in Europe," GM CFO Dan Ammann told analysts.
GM CEO Dan Akerson called the losses in Europe "not sustainable and not acceptable" and hinted at further cost-cutting.
"We need to lower our breakeven point even lower than we have today in Europe," Akerson told analysts. "More to come on that."
In North America, GM's profits edged up less than $100 million, to $2.2 billion. But higher vehicle prices added about $300 million to profits, since customers were willing to pay more for fuel-efficient cars such as the Chevrolet Cruze. Other factors offset much of the gain from stronger pricing.
It was a continuation of a theme: Over the first nine months of the year, higher prices added $1.2 billion to GM's bottom line compared with the same period of last year, Ammann said.
"We are pursuing price opportunities, not just on launch vehicles but on every vehicle we can around the world," Ammann said. "We still have opportunity to gain price relative to the competition."