DETROIT -- The smaller second-quarter European losses posted last week by General Motors and Ford Motor Co. appeared to signal that the car market on the other side of the Atlantic has reached its nadir and is beginning to heal.
But neither automaker seems to believe that -- or at least they're not banking on a market rebound to cure the weak demand and capacity glut that drained nearly $2 billion from each company last year.
Instead, GM and Ford believe that, for now, they have successfully quarantined the Europe problem, which until recently threatened to stymie the comebacks they have been riding, thanks in part to the resurgent U.S. market.
Each has contained the damage by taking some pages from the same playbooks they used to recover from the U.S. downturn: aligning supply with demand; trimming capacity where possible; emphasizing retail over fleet customers; and focusing on improved products and brand positioning.
"A demand-driven recovery isn't in sight yet," GM CEO Dan Akerson said last week while discussing the company's second-quarter results for Europe. "So we have to keep working on cost, complexity and brand building."
GM surprised analysts by posting a smaller-than-expected European loss of $110 million for the second quarter, compared with $394 million a year earlier, citing cost containment and strong demand for the new Opel/Vauxhall Mokka crossover.
GM is on pace to hit its goal for 2013 of a "slightly" better result than last year's $1.8 billion loss, having lost just $285 million in the first six months.
Ford's losses in Europe narrowed in the second quarter to $348 million, from $404 million a year earlier. Ford revised its projected European losses for the year to $1.8 billion, from an earlier forecast of $2 billion.
Ford launched a restructuring effort in Europe last year modeled on the same plan that has brought the company back to profitability in North America. The plan includes closing three factories, trimming 6,200 jobs and launching a new generation of vehicles based on global platforms.
"Europe is making very good progress," said Bob Shanks, Ford's chief financial officer.
Across the industry, opinions vary on whether the European auto market is ending its six-year slump.
Ford executives project more optimism about Europe's recovery than do GM's. This month Ford of Europe President Stephen Odell said the European industry may have hit bottom. "We're not predicting any upturn yet, but there are certainly some good indications," he said.
Daimler last week predicted a "gradual improvement of the market situation" in the second half of the year. Morgan Stanley analyst Adam Jonas wrote in a research note that Europe "is showing further signs of bottoming" and that its path to breakeven by mid-decade "looks more assured."
Renault-Nissan CEO Carlos Ghosn is not so optimistic. He says the European car market will be stable at best through 2015, adding: "More realistically, we may see another decrease -- maybe not as violent or as deep as the ones we have seen for the last years."
GM CFO Dan Ammann was in no mood to call a bottom in Europe. He warned that the market is prone to a "seasonal decline" in the second half and said GM isn't making any new forecasts for its bottom line in Europe.
"The things that we control, we feel very good about," Ammann said. "The macro environment remains very challenging."