GM chief blames weak share price on Europe

The head of General Motors blamed the automaker's weak share price on the unsettled economic climate in Europe Tuesday as he prepared to address an annual shareholder's meeting. "There is a lot of uncertainty generally about the strength of a major trading partner," chairman and chief executive Dan Akerson told reporters. The US government -- which financed GM's 2009 bankruptcy -- still holds roughly 32 percent of GM's stock. Akerson said he has no discussions with the Obama administration about the potential sale of the government's stake. Fixing GM's own operations in Europe remains the company's top priority, added Akerson, who noted GM's European unit has succeeded in striking new labor agreements with unions in both Poland and Great Britain. GM's main German union, IG Metal, has been less receptive to GM's proposals, although negotiations continue. GM's Bochum, Germany plant is thought to be the most likely target of its ongoing European re-structuring effort but Akerson declined to comment on a possible closure. GM -- which saw earnings drop to $1 billion in the first quarter from $3.2 billion a year earlier -- is also continuing to move ahead with its broad cost cutting efforts throughout the company, he said. "We're probably 25 percent of the way there," Akerson said at a press conference, noting that GM had recently cut its advertising budget by between $200 million and $400 million. The GM chairman also said he was optimistic about the durability of the US economic expansion despite fears of a potential of recession next year if Democrats and Republicans can't overcome a political deadlock on future tax plans and deficit reductions. "I'm more optimistic than a lot of you in the press that our political leadership can reach an agreement," he said. GM shares were essentially flat in morning trade at $21.95, down sharply from a peak of $38.98 reached a couple months after its record-breaking November 2010 initial public stock offering.