General Motors chief Ed Whitacre said the giant US carmaker is now in better shape now than for a long time, although pushing ahead with an initial public offering this year may be tough.

GM earned US$865m in the first quarter of this year but is still losing money at its European unit.

Whitacre has said he would like to begin selling shares as soon as possible as the US government needs the company to reduce its 61% stake and to reap some returns on its $50bn investment.

GM wants to start selling shares in the fourth quarter of this year in its bid to remove itself from government ownership.

Analysts said the sale of shares may be worth as much as US$12bn but it comes at a difficult time.

According to data compiled by Bloomberg , at least 32 companies worldwide have postponed or withdrawn initial offerings since the start of May. IPOs have slowed at concern the European debt crisis is spreading beyond Greece along with slower-than-expected US jobs growth in May.

GM reported a loss loss of US$500m before interest and taxes in Europe in the first quarter, in contrast to a US$1.2bn profit in North America.

The company also reportedly wants to have an automotive-lending unit before going public. GM sold its 51% share in finance subsidiary GMAC to private-equity firm Cerberus Capital Management LP in 2006.

The US government’s current net investment in GM is US$42.2bn. The company has repaid US$6.7bn in loans and paid US$600m in interest and dividends. The US also holds US$2.1bn in the company’s preferred shares.