GM Earns Nearly $2 Billion in Second Quarter : Autos: The No. 1 car maker hits another milestone in its remarkable turnaround.

General Motors on Thursday reported that it earned a record $1.92 billion in the second quarter, as surging sales allowed the auto maker to boost prices on many of its models while its cost-cutting efforts also produced major savings.

The report was another milestone in a remarkable turnaround at the nation’s largest auto manufacturer. GM had posted total operating losses of more than $8.41 billion in 1991 and 1992 and closed dozens of plants.

The profits were more than doubled from the year-ago quarter and capped a week of record earnings announcements by the nation’s Big Three auto makers. Ford Motor Co. said Wednesday that its second-quarter profit also doubled, to $1.71 billion, and Chrysler said its net income jumped 40% to $956 million.

“Its a great accomplishment and says a lot about the U.S. manufacturing base,” said George Magliano, an auto analyst at WEFA Group in New York. “Here they thought Detroit was dead and were writing them off” just a few years ago.

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Despite logging the best quarterly profit in its history, GM still has its share of problems, financial analysts say.

GM’s share of the U.S. market slipped to 33.1% in the quarter from 34.8% last year, while company executives admit that their per-vehicle profit remains below the industry average and that their plants could be run more efficiently.

The record profits were due largely to a turnaround in GM’s key North American automotive operations, which account for most of the company’s annual revenue. Those operations posted a $723-million profit in the quarter on a 10% rise in sales, compared to a $33-million loss a year earlier.

The company said earnings from its international automotive operations rose to $543 million from $306 million a year earlier, thanks to a slow recovery in the European economy and continued strong results in Latin America.

Surging demand by U.S. consumers has allowed GM and other auto makers to raise prices on many of their models and trim back costly incentive programs.

But in some ways, that strong demand has proven to be a double-edged sword for GM. The company couldn’t build enough of some of its most popular models in the second quarter--including its highly profitable sport-utility vehicles and other light trucks.

“This was a solid quarter,” said David Healy, an analyst at S.G. Warburg & Co. in New York. “But they had a thinner mix of more profitable vehicles, which made them earn less than they might have otherwise.”

GM said it earned an average of $650 on each car it sold in the second quarter, up from about $265 last year. But despite that improvement, its per-car profits were about $300 below Ford’s and more than $600 below Chrysler’s.

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The auto maker said the profit margin at its North American operations was only 2.7%, which GM officials called “considerably short” of the company’s goal of an annual profit margin of 5%.

And while GM Chief Financial Officer J. Michael Losh said cost-cutting efforts added $330 million to its quarterly profit, he said more changes are needed to make the auto maker more competitive. Losh didn’t say what additional cost-cutting moves may be made, although the company is still in the process of trimming thousands from its work force.