GENERAL Motors is huge. As the world's largest producer of cars, it collects motor companies like a child collects sweets.

In Europe alone, GM lists Vauxhall, Opel and Saab among its trophies. It also owns Buick, Cadillac, Chevrolet, GMC, Pontiac and Saturn.

Around the world, it provides work for more than 300,000 people and its sales are measured in the billions.

But, as the saying goes, the bigger they are, the harder they fall.

Last week, the company reported the worst three monthly North American sales performance in 13 years - a $1.3bn loss.

Market share in the US has slumped and revenue per unit is the same now as it was five years ago.

The company promised significant cost cuts, but management has been vague about where the axe will fall.

Chief financial officer John Devine told journalists: "Clearly, our results indicate we have more work to do."

Top of the issues is health care expenses, which are currently $5.6bn and rising.

The cost of health schemes is now so heavy that GM is thinking about dipping into cash set aside for retiring workers to help relieve the financial burden.

On a more worrying note, the medium-term outlook shows no let up in costs pressures. GM's full-year profits are expected to be 80 per cent lower than the group's original estimates.

GM had a cash outflow of $4.7bn in the first quarter, including $1.7bn for job cuts in Europe, and a payout to Fiat SpA to dissolve a partnership with the Italian car maker.

The figures were the worst since GM lost $21bn in the first quarter of 1992 when the group came close to bankruptcy.

The situation has prompted renewed calls for factory closures and a re-evaluation of the company's brands.

A report by Deutsche Bank urged bosses to take tough decisions now in order to secure a brighter future for the group as a whole.

It suggested the closure of four assembly plants with the loss of 30,000 jobs in North America.

More controversially, the report also urged GM to drop one of its brands - most probably Buick - and renegotiate health care benefits for factory workers.

"The end result is that GM would emerge a smaller and healthier company," said the document.

But in doing so, it may also lose its position as the biggest car company in the world.

Ford has already slipped from second to third as Japan's Toyota shows no signs of the malaise that is gripping the US manufacturers.

Can it be a matter of time before GM cedes its position and the US is no longer the spiritual home of the automobile?