ANTIQUES SHOPS

"We are in discussions with our German unions and others throughout Europe," CEO Dan Akerson told reporters before GM's annual shareholders meeting in Detroit. "They're constructive, they're professional, and it's our hope and expectation that we'll come to some sort of mutual understanding."

Akerson declined to address whether the future of a plant in Bochum, Germany, will be discussed at the GM board meeting later Tuesday, but said he told shareholders that actions in Europe would include "removing capacity when and where we can." When asked whether the talks with unions would cover Bochum's future, Akerson said they relate to all GM's European plants.

GM is hosting its second annual meeting since emerging from bankruptcy in 2009 and going public in late 2010. The largest U.S. automaker is facing an increasingly difficult environment in Europe, where demand has drastically declined during the region's financial crisis.

Akerson said Europe - where it has lost money the last 12 years - is the company's most important issue. "We have to fix Europe or at least get it to where it isn't draining the corporate coffers," he said.

In New York on Tuesday, Nissan and Renault CEO Carlos Ghosn said the companies expect "three to four more years of stagnation" in the European auto business and was "planning for the worst.

GM's Europe business posted a first-quarter loss of $256 million (164 million pounds).

In late February, GM announced an alliance with French automaker Peugeot Citroen SA in hopes of reversing years of losses at its Opel unit. But many analysts have questioned the benefits of this alliance.

Akerson said in March it may be two years before the European division is profitable again as the continent sheds overcapacity. He believes the overall industry has an excess of seven to 10 car plants in the region.

Analysts expect GM to disclose more details about its plan to turn around the Europe business at Opel's June 28 board meeting in Ruesselsheim, Germany.

Investors have been focused on the turnaround at Opel, which GM opted to keep in 2009 after halting a planned sale.

In November, Akerson signaled his growing impatience by naming Vice Chairman Steve Girsky to head the supervisory board at Opel. The unit posted a $747 million loss last year.

Speculation that the Bochum plant would close intensified after GM said last month it would halt Astra production at Opel's main plant in Ruesselsheim, with the car to be made only in Britain's Ellesmere Port and Gliwice in Poland.

GM executives have refused to promise workers in Bochum their jobs would be safe after the company's current labour deal with German union IG Metall expires at the end of 2014.

Bochum directly employs more than 3,000, and unions have said many more workers at suppliers and other businesses depend on that plant.

PENSION LIABILITY IS KEY

Akerson also said Tuesday that addressing the company's pension liabilities was key. Earlier this month, the company said it would remove $26 billion, or nearly one-quarter, of its U.S. pension liabilities by offering pension buyouts to some white-collar retirees and shifting responsibility for the plans to a unit of Prudential Inc.

He said GM was not talking to the United Auto Workers (UAW) union about shifting pension liabilities from U.S. hourly retirees to a third party like Prudential, but added he was open to that possibility.

"I'm not saying we're going to do it, but it's certainly something that we would consider if the opportunity arose," he said.

During contract talks last fall with the UAW, GM won an agreement from the American union to discuss ways to lower the automaker's pension risk. Pension payments to retirees represented by the UAW represent the bulk of GM's pension liabilities.

Akerson told CNBC before the annual meeting the U.S. Treasury, which still owns about 27 percent of GM's diluted shares, should outline a plan to unload the stake that does not hurt the company's share price.

He previously said while it was not up to him, an ideal outcome would be for the U.S. government to sell off its stake steadily over 10 quarters.

The U.S. Treasury acquired GM shares as part of the $50 billion taxpayer bailout of the automaker in its bankruptcy. GM stock has fallen to about $22 from its IPO price of $33.

U.S. President Barack Obama's re-election campaign has touted the auto sector bailout as one of his major accomplishments, seeking to draw a contrast with Republican White House contender Mitt Romney, who opposed it.

(Additional Reporting By Bernie Woodall in Detroit and Nick Zieminski in New York; editing by Jeffrey Benkoe and Gunna Dickson)

* Beijing base underlines commitment to China market

* Western investment banks face challenge from homegrown firms

* Schwartz will oversee all of Asia operations (Adds details on Schwartz's prior connection to Rajaratnam, Gupta)

By Lawrence White

HONG KONG, June 12 (Reuters) - Goldman Sachs said on Tuesday it had rehired veteran banker Mark Schwartz in the role of chairman of its Asia Pacific unit, based in Beijing, becoming the first global investment bank to place its sole regional chairman in China's capital.

Schwartz's placement in Beijing - rather than Hong Kong where peers from other big banks sit - puts him in a position to oversee the bank's joint venture there, Goldman Sachs Gao Hua, and to have quick access to leaders of some of the world's largest companies.

Schwartz, 57, first hired by Goldman 33 years ago, will replace Michael Evans, who has served as Chairman of Asia Pacific since 2004. Evans is based in New York and will continue in his role as a vice chairman of the bank and global head of growth markets.

After leaving Goldman in 2001, Schwartz worked as an adviser to George Soros and in 2006 formed with Raj Rajaratnam and former Goldman board member Rajat Gupta a combined hedge fund and private equity group named Taj Capital.

The $1.4 billion fund, which was renamed New Silk Route, invests in India, Asia and the Middle East. Rajaratnam was jailed in October 2011 for insider trading, while Gupta is on trial on charges stemming from the investigation into Rajaratnam's Galleon Group.

Schwartz's involvement with the fund was brief, and he is not listed as an officer on its website.

Schwartz's latest move sees Goldman Sachs fill a hole that has lingered since mid-2010, when Evans' move to New York to head the emerging markets drive meant that the firm's Asia chairman was not based in the region.

"The move to Beijing is very symbolic, and is similar to HSBC moving its CEO office to Hong Kong," said Ronald Wan, a managing director at China Merchants Securities (Hong Kong).

"They want to show a commitment to the China market, and probably improve ties with state-owned enterprises and the government."

While the firm stressed that this is a regional role, placing Schwartz in Beijing puts him in a position to bolster Goldman Sachs Gao Hua's efforts in China, and push key corporate and government relationships there.

Goldman faces several challenges in China, including renewed competition from foreign securities joint ventures and the rise of domestic investment banks and brokerages.

The firm is the top-ranked bank globally for China equity offerings worldwide year-to-date, though it is only 29th for listings in the onshore "A" share market, according to Thomson Reuters data. That ranking places it below many of its Western rivals, including Credit Suisse, Deutsche Bank , JP Morgan and UBS.

LOCAL DIFFICULTIES

Foreign investment banks have found it difficult to make headway in China's onshore markets, with local firms using their deeper connections to win the lion's share of fees.

While Goldman Sachs has more control over its China operations than some rivals who arrived after a tightening of the ownership rules, the U.S. bank also suffers from not having total ownership of its China business.

The compensation structure of foreign banks also makes it harder for them to be profitable in China.

While Western firms need to chase big deals to cover the costs of their well-paid bankers, Chinese securities firms originate business using large teams of lower-paid dealmakers who get a cut of the fee for success.

With fewer jumbo-sized mandates available as the big banks and state-owned industrial firms complete their IPOs, the fees are more evenly distributed among medium and small-sized companies that the Chinese underwriters are better suited to execute.

"That's our biggest competitive advantage," said Dan Weil, global head of institutional sales and trading at Guosen Securities, the top-ranked China equity house year-to-date.

"We have 500 bankers, but we're not paying them $1 million each just to walk through door. They get paid on success. That enables the firm to have reach."

Part of the strategy behind locating Schwartz in Beijing will be to use his seniority to win more deals, in a market where bankers say clients put particular emphasis on the rank of the person pitching to them.

STRONGER FOOTING

Goldman is on a stronger footing in Asia-Pacific investment banking overall, having closed 2011 as the second-ranked firm in the region by fees and market share according to Thomson Reuters data, behind UBS.

This year, when completed listings have been thin on the ground, it won roles on some of the more high profile attempted listings, including Formula One and Graff Diamonds.

In Asia excluding Japan M&A advisory year-to-date, Goldman is top-ranked so far with 39 announced deals worth a combined $33 billion.

Schwartz's role will see him oversee all of the firm's business in Asia, encompassing asset management, private wealth management and securities trading in addition to investment banking.

While he is the first sole Asia Pacific chairman of a global investment bank to be based in Beijing, Morgan Stanley's Asia Pacific Co-CEO Wei Sun Christianson is there. Morgan Stanley has no regional chairman.

Schwartz is a Goldman Sachs veteran, having joined the firm in 1979 in the investment banking division. He was named a partner in the firm in 1988.

His career at Goldman Sachs saw him work in fixed income and then run the capital markets division from 1991 to 1997, before a move to Tokyo to become president of the Japan business. He held the title of chairman of Goldman Sachs Asia from 1999 to 2001.

On leaving Goldman at the end of that stint in 2001, Schwartz worked for Soros Fund Management, first as an adviser and then as president and CEO from 2003 to 2004.

Since 2006, Schwartz has been the chairman of MissionPoint Capital Partners, an investment firm he co-founded, which is focused on the transition to a lower carbon economy. (Additional reporting by Michael Flaherty and Kelvin Soh; Editing by Alex Richardson)