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UPDATE 1-AUTOSHOW-US auto sales not as weak as some forecasts-GM

(Adds details from Wagoner discussion, background)

GENEVA, March 4 (Reuters) - General Motors Corp GM.N Chief Executive Rick Wagoner on Tuesday said U.S. auto sales have been weak in the first two months of the year, but have not approached the extremes of some forecasts.

“I think it is fair to say that it has been a little better than some of the doomsday people are thinking,” Wagoner told reporters on the sidelines of the Geneva auto show.

He said GM, the largest U.S. car maker, had not made any radical changes to its spending plans and was ready to react should the market weaken or fail to recover.

GM on Monday reported a 16 percent decline in U.S. sales in February and trimmed its second-quarter production plans.

Overall, the largest U.S. automaker expects U.S. sales to recover in the second half of the year, but has not been building “a whole bunch of inventory” in anticipation of a rebound, Wagoner said.

GM’s forecast stands in contrast to that of several analysts and Chrysler President Jim Press, who said the expectation of a U.S. car industry rebound later in 2008 was “wishful thinking.”

Still, Wagoner said the U.S. auto industry feels like it has been in a recession for a while, with the main question being how long it will last for the industry.

On a broad economic front, Wagoner pointed to U.S. jobs creation as still pretty good and the government stimulus plans and Federal Reserve interest rate cuts.

Oil prices are expected to remain high, but manageable at current levels, and the U.S. housing market does not appear to have bottomed out, he said.

“Probably the biggest issue is what is going to happen to credit availability,” Wagoner said. “If that levels out, than things will probably come back and be OK, if it doesn’t there will be downside risks.”

Wagoner also said GM was hopeful the United Auto Workers and major GM parts supplier American Axle & Manufacturing Holdings Inc AXL.N could resolve a contract dispute that led to a strike that could eventually idle six GM plants.

GM has been able to continue some production on the vehicles that have parts supplied by American Axle and inventories still remain a little high on those vehicles, Wagoner said. (Reporting by David Bailey; editing by Maureen Bavdek)

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