The Detroit-based automotive empire General Motors has bounced back from the brink of financial oblivion to achieve its first profit for almost three years, as American motorists returned to car showrooms in spite of ongoing sluggishness in Europe's motor industry.

GM, which owns brands including Chevrolet, Cadillac, Buick and Vauxhall, produced an $865m (£595m) profit for the first quarter, a remarkable turnaround from its loss of almost $6bn for the same period a year ago.

"We're in the process of rebuilding a company here and putting down the foundations is one of the most important things when you're rebuilding," said GM's chief financial officer, Chris Liddell. "One of those foundations is clearly achieving profitability."

GM collapsed into bankruptcy in June 2009 and was kept afloat through an emergency investment of $61bn from the US and Canadian governments, which now own 73% of its stock. The improvement in its fortunes is a result of cost cutting, strong sales of new models in the US and a jump in sales in emerging markets such as China and Brazil.

The number of vehicles sold globally by GM jumped 23% to 1.99m as the company reopened factories that were temporarily idled at the worst point of the global financial crisis. In the US, the company moved from a $3.4bn operating loss to a $1.2bn profit. But GM's European business, which includes Vauxhall factories in Luton and Merseyside, continued to struggle with a loss of $506m, down from last year's $814m deficit.

"In Europe, we lost money," said Liddell. "So Europe is still the area where we need to make the most progress."

GM is not alone in finding the European market tough. The European Automobile Manufacturers' Association (ACEA) revealed that new car sales across the continent dropped by 7.4% in April to 1.13m registrations following the winding down of "cash for clunkers" schemes that had encouraged motorists to scrap older vehicles. The association said: "Government support has ended or begun to fade out and the economic situation remains difficult."

Last year, GM came close to selling its European business, which comprises Britain's Vauxhall plants and Germany's Opel manufacturing business. However, the company backed off at the last minute after deciding that a European presence was essential to sustaining its future as a global player.

Sales of Vauxhall and Opel vehicles slipped slightly from 297,000 to 295,000. GM's market share in Europe dropped from 9% to 8.5%, although this was partly due to the sale of the Swedish marque Saab. GM has indicated that it intends to cut about 500 jobs at its Vauxhall factories in Britain to restore profitability.

If GM continues to improve its financial performance, chairman Ed Whitacre has indicated that the company could attempt a flotation to relist its shares on the public markets late this year.

Craig Fitzgerald, an automotive expert at consultancy firm Plante & Moran in Michigan, said GM had successfully removed complexity from its strategy and production line, while restoring a reputation for good quality vehicles. He said new US models, including the Chevrolet Equinox, the Cadillac SRX and the Buick LaCrosse, were proving to be hits: "Their new vehicles, if not best in class, are near best in class. They're having success in showrooms."
GM's workforce of 205,000 has fallen from 335,000 since the end of 2005. Once the largest carmaker in the world, the company has been overtaken by Toyota and is vying with Ford for the number one spot in the US.

Since suffering the worst downturn in US car sales since the war, GM has axed brands including Pontiac and Saturn. After failing to find a buyer, the company is winding down its gas-guzzling military-style Hummer brand.

UN rights chief Navi Pillay said Bangkok was in danger of spiralling out of control, after five days of violence which has seen 37 people killed.

She spoke a day after protesters called for UN-backed talks to end the crisis - a move rejected by the government.

A protest leader and the government's negotiator had a five-minute phone call earlier but could not agree a truce.

Ministers say the protesters must leave their makeshift camp in the centre of Bangkok before talks can commence.


Map of protest areas in Bangkok

Bangkok clashes: Map
In pictures: General buried

They set a deadline of 1500 local time (0800 GMT) for protesters to leave - but few of the 5,000 protesters camped in the so-called red-zone heeded the ultimatum.

The protesters insist that government troops must lift their blockade of the red-shirt camp before any negotiations.

In a statement, Ms Pillay said: "I urge leaders to set aside pride and politics for the sake of the people of Thailand.

"To prevent further loss of life, I appeal to the protesters to step back from the brink, and the security forces to exercise maximum restraint in line with the instructions given by the government."

The demonstrators, who want Prime Minister Abhisit Vejjajiva to step down, have been occupying large areas of the city since mid-March.

A protester throws wood on to a fire in Bangkok, 17/05
Fires set by the red-shirts have become a symbol of their protest

Sporadic outbreaks of unrest have accompanied their protest, including an attempted crackdown by security forces in April that left 25 people dead.

Violence again broke out last Thursday, and soldiers are now openly using live ammunition; sniper fire has been reported.


RED-SHIRT PROTEST
14 Mar: Red-shirts converge on Bangkok, occupy government district
16 Mar: Protesters splash their own blood at Government House
30 Mar: Talks with government ends in deadlock
3 Apr: Occupy Bangkok shopping district
10 Apr: Troops try to clear protesters; 25 people are killed and hundreds injured
13-17 May: 36 killed in Bangkok clashes

Protests day by day
In pictures: Bangkok violence
Thai protests: Eyewitness accounts
Obituary: 'Commander Red'

The authorities say they are targeting "terrorists" who have infiltrated the protesters' ranks, but TV footage has shown unarmed protesters being shot in the streets.

While the majority of the red-shirts are conducting their protest peacefully, some have been building barricades of tyres and setting them alight. Witnesses say others are armed with guns.

Late on Monday, the two sides held what is believed to be their first direct talks since the latest unrest broke out.

The government's chief negotiator Korbsak Sabhavasu said red-shirt leader Nattawut Saikuwa had called him and asked for a ceasefire.

But Mr Korbsak told the Associated Press news agency that nothing had been agreed.

On Monday, protests spread outside the capital with a military bus torched in Chiang Mai and demonstrations in two other northern towns.
Many of the protesters are from poor rural areas in the north, where support is still strong for former Prime Minister Thaksin Shinawatra, who was deposed in a 2006 coup.

The protesters say the current government is illegitimate, having come to power in a parliamentary vote after a pro-Thaksin government was forced to step down in December 2008 by a Constitutional Court ruling that it had committed electoral fraud.