Image caption GM will pay profit-sharing bonuses to staff

US carmaker General Motors made record profits in 2011 but unveiled huge losses in its European operations.

The firm made a profit of $7.6bn (£4.85bn) over the year, up 62% from 2010.

However, it lost $700m in Europe, which includes its UK Vauxhall plants in Ellesmere Port and Luton, and made a $100m loss in South America.

The firm, which faced bankruptcy two years ago, saw sales rise 7.6% last year to more than 9 million vehicles.

Analysis The widening losses at GM's Opel unit, which also owns Vauxhall, will require a hasty response from the company's new chief executive, Karl-Friedrich Stracke. Costs must be cut quickly and sharply to save Opel from going under. At this stage, abrupt plant closures or further job cuts are not part of the discussion with the unions, according to Mr Stracke, but it is nevertheless far too early for workers to relax. Opel has lost $11bn (£7bn) since 1999, almost a quarter of it during the last two or three years, and although restructuring costs reached $900m last year there are no signs that the haemorrhaging of cash is about to stop. This has fuelled speculation that Opel's factories in Bochum in Germany and Ellesmere Port in the UK could soon be on the block, with more than 5,000 jobs at risk. A more extreme solution - albeit one that some industry observers say might be viewed favourably by Dan Akerson, chief executive of parent company General Motors - might be to simply get rid of the loss-making marques altogether if the efforts to nurse them back to health continue to splutter.

Much of its growth came from North America, where profits more than tripled to $7.19bn in 2011.

Cost-cutting

GM has announced it will give up to $7,000 each in bonuses to 47,500 eligible workers across the world - compared with $4,300 a year ago.

In 2008, the firm filed for Chapter 11 bankruptcy protection and received a $50bn bailout from President Barack Obama's administration, with the US government now owning 32% of the firm.

In the UK, the firm has about 4,500 staff, making the Vauxhall Astra van, estate and hatchback models.

General Motors' chief financial officer, Dan Ammann, said: "Behind the scenes, we are working hard to eliminate complexity and cost throughout the organisation to increase margins in all of our regions and return Europe and South America to profitability."

However, he did not disclose whether this would mean job cuts.

Some analysts were disappointed that GM failed to give a detailed forecast for 2012.

"A lack of guidance leaves GM shares shrouded in the thick fog of macro-uncertainty," said Adam Jonas of Morgan Stanley.