When I sat down to talk with GM CEO Rick Wagoner this morning on "Squawk Box," I was expecting to see a man, beaming over the better than expected second quarter earnings.
Instead, I saw the Chairman of a company who looked cautious. Why? Well, maybe it's because the General Motors' glass is half full, and filling it up even more will be a challenge. Certainly the second half of this year will be tougher than the first half. Just look at the issues facing Wagoner.
UAW talks: Sure he and the union leadership are saying publicly that both sides want to get a deal, but will the deal be sweet enough for GM. Remember, GM will sign a four year labor deal. It needs a contract that will work in 2011 as much as it will in the end of the 2007. That could mean asking the UAW for a deal they can't' accept.
Truck sales under pressure: With the slumping housing market, higher interest rates, and growing incentives all weighing on pick-up sales, Wagoner has good reason to be concerned. Trucks are the profit drivers in North America, and if the truck market stays soft, second half earning will be muted.
Growing revenue: After selling numerous assets the last three years (including half of GMAC), GM has just about leveraged everything it can, and is now facing the reality that it has to grow revenue with cars and trucks that sell. That's gonna be a challenge in North America where GM's market share has been steadily sliding lower. A new Cadillac CTSand Chevy Malibuare critical to helping sales.
With all that said, don't sell GM short on pulling off more surprises in the second half. International sales are growing (Europe is especially strong). The Chevy brand has momentum. And GM's a far more nimble company that is better positioned to handle downturns.
Can't wait to see how Mr. Wagoner looks in October when 3Q earnings come out.
Questions? Comments? BehindTheWheel@cnbc.com