DETROIT - Just two years after it was rescued and reconstituted through bankruptcy and a government bailout, General Motors Co. cruised through 2011 to post the biggest profit in its history.

The 103-year-old company, leaner and smarter under new management, cut costs by taking advantage of its size around the globe. And its new products boosted sales so much that it has reclaimed the title of world's biggest automaker from Toyota, reported Yahoo Finance.

GM may have a hard time breaking this record in 2012 because it is losing money in Europe and South America, and U.S. sales growth slowed in the last three months of 2011.

But the company's performance in North America and Asia still helped it earn $7.6 billion for the year, beating the record of $6.7 billion set during the truck boom in 1997.

The profit won't stop the debate about spending $49.5 billion in taxpayer dollars to save GM. But it did drive up the company's stock price, which could help the government get more of its money back.

The bailout of GM and Chrysler Group LLC, begun by George W. Bush and finished by Barack Obama, remains a major issue in this year's presidential campaign. It's so politically charged that even a Super Bowl ad celebrating Chrysler's rebirth caused arguments.

GM, which released its earnings Thursday, performed best in its home territory, posting a $7.2 billion pretax profit in North America. The numbers were so good that 47,500 blue-collar workers will get $7,000 profit-sharing checks, the maximum allowable under their new union contract. International Operations, which includes Asia, made $1.9 billion before taxes, but that was down from 2010.

GM's cost cuts, and its outlook for this year helped to push up the stock price by almost 9 percent to $27.08. The company said it trimmed costs by $500 million in the fourth quarter alone mainly by consolidating advertising agencies and engineering operations. A prediction that costs wouldn't rise this year wowed investors, especially since other automakers have forecast rising costs, said Itay Michaeli, an analyst for Citi Investment Research.

"That was a very pleasant surprise," he said.

GM also was optimistic about sales and revenue. It sees its global market share holding steady at 11.9 percent, and if global auto sales rise as expected this year, GM's slice of that would also increase.

That's especially promising, since GM managed to make money last year with industry-wide sales in the U.S. at a historically low 12.8 million. Sales this year could rise to 14 million.

The company expects to charge more for its cars and trucks this year, but warned that the prices could be pressured as the market shifts toward smaller, less-expensive vehicles.

CEO Dan Akerson hinted at a better year for GM in 2012, saying that the company will build on the 2011 results as it brings more new products into the market.

"The outlook here is quite favorable for earnings growth," said Citi's Michaeli. "They're keeping their costs really under control."

That's good news for the U.S. government, which still owns 26.5 percent of the company and needs more strong earnings to push up the stock price.

The government owns 500 million shares of GM, which it got in exchange for the $49.5 billion bailout. Through earlier stock sales and loan repayments, the government has recouped about $22.3 billion of that money. The remaining shares would have to double in price and sell for around $53 for the government to get back the rest.

Despite the big annual profit and optimistic outlook, GM still lost $747 million before taxes in Europe last year, and its losses are expected to continue until a restructuring plan takes hold.

Akerson said GM will have to cut its European factory capacity to match lower sales. South America lost money, too: $122 million for the year. GM's fourth-quarter profit fell 8 percent, and its U.S. sales growth slowed in the quarter even as more Americans bought cars and trucks.

Also, GM's U.S. stockpile of cars and trucks is growing, and that could force it to offer discounts, especially in competitive market segments like pickup trucks and midsize cars. In January, GM's inventory was about 620,000, enough to supply its dealers for 89 days. That's up by more than 100,000 from a year earlier, when GM had a 68-day supply, according to Ward's AutoInfoBank.