General Motors has blamed higher healthcare costs and sliding car sales in North America for a quarterly loss of $1.1 billion, the company’s worst result since it flirted with bankruptcy in 1992.

The Detroit-based company, the world’s biggest carmaker, highlighted "well thought out" recovery plans after revealing that it had plunged into a loss during the first three months of the year after achieving a $1.2 billion profit in the same quarter in 2004.

Including charges, the loss was $1.1 billion.

The slump reflected the "clearly disappointing" performance of GM North America, Rick Wagoner, the group chief executive, said.

The division’s $1.3 billion loss compared with a $401 million profit a year before, and reflected a 1.1 per cent decline, to 25.2 per cent, in GM’s share of the North American market. The market squeeze prompted a production cut which has reduced the stocks of unsold GM vehicles in the region by nearly 100,000.

The division also faces a rising healthcare bill, currently at about $5 billion a year, prompted by generous packages given to 1.1 million employees and their dependents.

"We clearly have the need to do a much better job on both the revenue and cost side of our business," Mr Wagoner said.

The company blamed uncertainty over the costs of factors including the "healthcare costs crisis" for a decision not to offer guidance on full-year earnings for 2005.

Last month, GM slashed its earnings forecast for the year by more than one-half.

Today’s statement added that the group’s performance in Europe, where it owns brands such as Vauxhall, Opel and Saab, had improved, with regional losses narrowing to $103 million from $116 million a year ago.

"Our European operations began to show real sings of progress, with the region posting its highest quarterly market share in six years," Mr Wagoner said.

Profits at the company’s finance division, GMAC, slid by 4.7 per cent to $728 million.

General Motors stock slid 1.6 per cent to $25.78 in early trade in New York.

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