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General Motors Co. earned $7.6 billion last year, the highest profit in company history.

But some problems surfaced in the results, and GM executives say there's more work ahead. Here are GM's current strengths, and the challenges it faces.

CHEERS:

_ North American money machine: On its home turf, GM earned $7.2 billion before taxes last year. North American sales rose 11 percent because of newer models like the Chevrolet Cruze compact.

_ Asia strength. GM's International Operations, which include China and the rest of Asia, made a pretax profit of $1.9 billion. While down 16 percent from 2010, it's still strong. Sales in the region grew 7 percent.

_ Cutting costs: GM cut $500 million in costs in the fourth quarter by centralizing global operations. It consolidated advertising agencies and reduced engineering costs. More savings are expected, and it predicted costs won't rise from 2011.

_ Research and Development: GM plans to boost capital spending this year to $8 billion from about $6.2 billion last year. The money will help it crank out new models across the globe and boost sales.

_ Outlook: GM's share of the global market should hold steady at 11.9 percent this year. If sales for the industry rise as expected, GM's sales will also rise. The roll-out of new models should allow GM to charge higher prices.

JEERS:

_ Slow fourth quarter: GM's profit fell 8 percent compared with a year earlier. Sales rose just 4.4 percent in the U.S., less than half the growth of the industry overall.

_ Trouble in Europe: Before taxes, GM lost $747 million in the region last year, and the economy in Europe isn't likely to improve in 2012. While the company is drawing up restructuring plans that include factory cuts, it won't say when it expects to break even.

_ South America woes: Company lost $122 million for the year despite a strong start. GM hopes that the rollout of seven new vehicles will make the region profitable again.

_ Pension drag: GM says its global pension plans are worth $24.5 billion less than their obligations. That shortfall is higher than the $21.4 billion at the end of 2010, mainly because GM changed its pension investments so they are less risky. That means the return on investment won't be as high. GM earned 11 percent on its pension investments last year.

_ Competition: Honda and Toyota are fully back in the game after their factories were slowed by the Japan earthquake, and that may cut into GM's sales this year.

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