General Motors could return to profit as early as 2011 after sharply reducing costs and debt through its recent bankruptcy restructuring, a Deutsche Bank analyst told an auto industry conference in Michigan.

North America equity research director Rod Lache added Ford could reach break even later this year if it maintained its current rate of cost reductions and market share gains.

The US government’s intervention in the domestic auto industry had “dramatically improved” the near-term outlook for automakers and suppliers as a result of the structural changes, Reuters quoted Lache as saying.

“So far, the evidence strongly supports that the US government’s intervention was successful. Companies emerged a lot healthier,” Lache said during the annual auto industry conference in Traverse City.

“Inaction by the US government, on the other hand, would have likely resulted in the failure of GM and Chrysler.”

Chapter 11 restructuring reduced GM liabilities to $34bn from $128bn and Chrysler debt to $14bn from $34bn.

“Mathematically, it appears that US automakers can make money at much lower levels of volumes,” Lache added.

GM lost $82bn in the last four years and has not announced a timetable for returning to profit, the report noted.

Ford reduced its Q2 operating loss and has forecast at least break even for 2011 – for the first time since 2004.

Lache also said that, though the US government would play a “less prominent” role in the local auto industry now the immediate financial crisis is passing, its role would remain significant in environmental and energy regulation.

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