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GM's U.S. Problem

General Motors
General Motors

If this sounds like a broken record, forgive me. But if you are looking for a reason why GM's turnaround is only a mild success, it's right here in the U.S. Just check out the company's latest earnings, which show a profitable business around the world, but one that is still in the red in the land of the red, white and blue.

Why?

Because the costs for GM North America remain high in a country where the company's market share continues to drop. That's a big reason GM lost $46 Million last quarter. When I interviewed Chairman and CEO Rick Wagoner on "Squawk Box," he said the company is essentially breaking even in the U.S. With a company bringing in as much revenue as it does in the U.S., I won't quibble over $46 million.

But this sets up more questions about what will happen this Fall, when GM and the UAW negotiate a new labor contract. GM will want to lower costs, and the UAW likely will counter that it's already given over $5 billion in health care concessions, why should it give more?

Something will have to give. GM may be on fire in Asia and strong in Europe and Latin America, but North America is still the key to whether or not this company will ever grow earnings beyond $62 million a quarter.

Questions? Comments? BehindTheWheel@cnbc.com

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