Bob Lutz, who was chairman of GM North America, has relinquished that role and will now focus full time on global product development, the company said. His number two, GMNA president Gary Cowger, has also been moved to focus on global manufacturing and labour.

Mr Wagoner, who is under pressure after a profits warning last month, said it made sense, given the challenges GM faced in North America, where it is losing money and customers. “It makes sense for me to assume control of GMNA’s day-to-day operations and shorten the lines of communication and decision-making.”

He pledged to move GMNA “faster on the path” back to profits. North America accounts for about 70 per cent of total GM sales.

The world’s biggest carmaker is buckling under vast employee healthcare promises as well as fierce competition from Ford, DaimlerChrysler and Japanese companies such as Toyota and Nissan.

It is also facing the threat of having its bonds downgraded to “junk” or sub-investment grade.

On Wall Street the move was greeted coolly. “You don’t make a move like this unless somebody thinks it’s a crisis,” said David Healy, a Burnham Securities analyst. GM shares dipped 19 cents to $29.19.

But Mr Wagoner put a positive spin on the reshuffle. Outside the US, he said “it’s clear that the two areas most critical to our future success are achieving excellence in every product we develop and doing it with the most competitive manufacturing system. And Bob and Gary are our two executives most experienced and skilled in these key areas.”

Mr Cowger would also be working on ways to tackle GM’s huge healthcare bill, working with unions, government and healthcare providers. “With his vast experience in labour relations, Gary is the ideal person to do this,” Mr Wagoner said.

GM provides healthcare insurance to 1.1 million past and present employees and their families, a future liability that adds up to $77 billion in today’s money.

Last month GM gave warning that it expected to report a first-quarter loss, having previously promised shareholders it would at least break even. It also said that profits for the full year would be significantly lower than expected. At the time Mr Wagoner signalled changes ahead at GMNA.

CAR GIANT ON A BUMPY ROAD

June 2003: Credit ratings downgraded. Concerns about pension and healthcare costs.

June 2003: Raises $16.5 billion in bond market to plug hole in pension and healthcare scheme. Biggest ever corporate debt raising exercise.

September 2003: Seeks wage freeze with union.

October 2004: Production in Europe hit by protests over plans to cut workforce.

January 2005: Bond markets spooked by fears of GM paper being relegated to “junk” after profit warning.

Times Recommends

• Blackstone target at $7.75bn on China deal
• An opportunity in the Muslim community
• BSkyB deal may spell trouble for Virgin