General Motors today reported that its June sales grew 11 percent thanks in part to a recovery in demand for its full-sized pickups.

Sales of the Chevrolet Silverado and GMC Sierra pickups, which fell in May and were flat in April, snapped back with a 15 percent gain in June. Car sales stayed hot, rising 28 percent, reported Automotive News.

Don Johnson, GM’s vice president of U.S. sales, said the rebound in pickup sales tracked a gradual drop in gasoline prices throughout the month.

“As people got over the fear of a fuel-price spike, those who actually need a pickup have come back into the market,” Johnson said during a conference call on Thursday.

As long as gasoline prices don’t spike “dramatically,” he expects pickup sales to strengthen in the second half of the year, which traditionally is better than the first half for pickup demand.

Still, Johnson confirmed that GM plans to trim its pickup production by idling plants this month, after inventory swelled amid gasoline-price spikes in the spring. He said pickup inventory is “slightly above where we’d like to be,” at 122 days’ supply. GM’s target range is 100 to 110 days, he said.

Despite the decline in gasoline prices, customers still favored fuel efficiency. Chevrolet sold 24,896 Cruze compacts in June, the third straight month the model topped 20,000 units. The Cruze Eco, the most fuel-efficient version with a 42 mpg highway rating, accounted for 17 percent of the model’s sales, up from 15 percent in previous months.

Truck brand GMC led GM’s four divisions with a 15 percent sales gain from a year earlier, followed by Buick, up 13 percent and Chevy, up 11 percent. Cadillac sales were down 8 percent, which GM blamed on a planned reduction in sales to rental fleets.

Some of GM’s sales momentum comes from luring buyers from non-GM brands. Its conquest rate, the portion of buyers not trading in a GM vehicle, was 47 percent in June, up from 40 percent in January.

Johnson attributed the improvement to hits such as the Cruze, which had 55 percent of its buyers come from non-GM brands in June, in addition to buyers of Japanese cars who might have had trouble finding what they wanted due to inventory shortages related to the March 11 earthquake in Japan.

“It’s a combination of lower inventory from some of our competitors as well as quite frankly because of the new product that we have in the marketplace,” he said.

GM’s crossover sales fell 2 percent because of a reduction in sales to fleet buyers. Retail crossover sales rose 24 percent, led by the Chevy Equinox, up 79 percent from June 2010, and the GMC Terrain, up 75 percent.

Overall in June, GM’s fleet shipments dropped 1 percent, while retail sales rose 16 percent.

After loading on discounts and lease deals to start the year, GM continued a trend of modest incentive spending. In June, its incentives fell about 6 percent from May. Johnson said they stood right around the industry average, which he said was 8.3 percent of the average transaction price in June.

When asked how GM would respond if Japanese rivals Honda Motor Co. and Toyota Motor Corp. ramp up incentives in the second half of the year, Johnson said GM will stick to its goal to be in line with the industry.

“We’re going to wait and see what industry does,” he said. “But at the end of day, we’re going to maintain our competitive position.”

Two years after General Motors Co. and the Obama administration worked together to save the auto maker, the two are now at odds over how to get the government out of the company.

The Detroit auto maker wants a share sale as soon as possible, people familiar with the matter said, while the administration has a goal of selling its remaining 27 percent stake in August or September, after GM’s next quarterly results are released, reported The Wall Street Journal.

The impasse is hardening seven months after the two sides celebrated a public stock offering that returned GM to Wall Street and brought in $13.5 billion for U.S. taxpayers.

Both are eager to cut those ties. GM says pay limits imposed by the government hamper its ability to recruit top talent. The Obama administration wants its still-debated ownership to be over by the time campaign season starts to heat up, people familiar with the matter said.

But the U.S. Treasury’s exit plan has become less clear as GM shares remain below the $33 price of GM’s November IPO. Shares closed up 38 cents at $29.97 in 4 p.m. New York Stock Exchange trading on Wednesday. However, the price is lower than either Wall Street or Treasury officials had anticipated. Late last year, some Wall Street analysts predicted GM’s share price could rise to between $40 and $50 within the year.

The issue flared up Wednesday with Republican lawmakers blasting the bailout in a hearing on the effects of GM’s bankruptcy.

The auto-industry rescue has been central to President Barack Obama’s message as he heads into next year’s re-election campaign. If Treasury takes a larger-than-expected loss on GM or remains stuck with its GM stake, it could hurt the narrative of Mr. Obama’s campaign.

The U.S. so far has recouped $27 billion of the $50 billion it spent on the bailout; any additional recovery would be through a share offering.

Treasury could delay an offering, or opt for a relatively small share sale if the share price remains depressed. Earlier this year, the company approached Treasury officials about buying back shares directly from the U.S. At the time, Treasury officials said they wouldn’t consider that option, these people said. Now, GM is considering a plan to buy back shares from existing stockholders, people familiar with the matter said. A buyback could increase the value of outstanding shares and indirectly aid the Treasury.

At $30 a share, taxpayers would lose about $12 billion on the GM rescue, a bigger loss than the $7 billion they would face if shares rose to the $40 level that some analysts had expected. A recent White House report put the total loss to taxpayers at $14 billion out of $80 billion bailout of the industry, down from its initial estimate of $48 billion.

On Wednesday, one of the architects of the bailout, White House adviser Ron Bloom, testified before a mostly-Republican Congressional panel.

“The administration absolutely picked winners and losers in the bailout—the losers were the American taxpayers,” said Rep. Mike Kelly, a Pennsylvania Republican whose Cadillac dealership was almost shut down in the GM restructuring.

Mr. Bloom defended the rescue. “The entire ability of the United States to make cars was at risk as this point,” he said. “What the American taxpayers get is the fact that they have an automobile industry.”

General Motors Co. is making a big bet on its smallest car, pricing the subcompact Chevrolet Sonic at a level comparable to well-established imports.

Due out this summer, the car will start at $14,495, or $2,500 more than the model it replaces. The higher prices reflect a car loaded with features including 10 airbags in hopes that customers will pay up, reported The Wall Street Journal.

GM is introducing the U.S.-made Sonic as its entry-level car, a category where consumers go for low prices and the auto maker has been forced to rely on low prices to compete with Asian rivals. The Sonic replaces the Chevrolet Aveo, built in Korea.

If the plan fails, GM could find itself stuck with a money-losing car plant. As part of a 2009 deal with the United Auto Workers union to slash costs as GM headed into bankruptcy protection, the company agreed to become the first—and only—manufacturer to build a subcompact in the U.S. It wouldn’t disclose production for the vehicle, but says it will run two shifts a day at the Sonic’s Michigan plant.

Ford Motor Co. at one point looked at making a subcompact car in the U.S. but ruled it out, according to people familiar with the matter. Even at GM, some top executives who joined after bankruptcy questioned the logic of the move, people familiar with the discussions said. Last year, the UAW agreed GM could staff the factory with lower-wage workers in a bid to make the plant profitable.

“There is going to be a lot of scrutiny around this car and GM needs to hope that customers accept this [higher] price point,” said Bill Visnic, an analyst for car-research firm Edmunds.com. “Everybody is trying to determine what people will pay for a subcompact car now.”

He thinks the price—less than Honda’s built-in-Japan Fit subcompact but slightly more than Ford’s Mexican-made Fiestas—will sit well with U.S. consumers.

Some dealers think the strategy can work. Cost and fuel economy are typically the top priorities for Aveo buyers, said Mark Maybee, sales manager at Spitzer Chevrolet in Lordstown, Ohio. But he believes even deal seekers are willing to pay more for a better car. On Friday, he sold an Aveo for $16,255, Mr. Maybee said. “Customers are starting to realize that they can get a better car,” he said.

GM says Sonic can be the first successful U.S.-made subcompact because consumers are demanding more and willing to pay more for small cars with good fuel economy, said Margaret Brooks, marketing director for GM’s small cars.

“We want people to show up and actually be able to leave the dealership with a car that costs $14,495,” Ms. Brooks said. While the Aveo’s starting price was under $12,000, customers bought models costing $15,100 on average, says Edmunds.

The pricing strategy worked for GM’s Chevrolet Cruze compact car. The Cruze is a size larger than the Sonic, and replaced the budget Chevy Cobalt.

With the Sonic, GM faces an even bigger challenge. When GM launched a redesign of the Aveo in 2007, a key bragging point was that it was the lowest-cost car sold in the U.S. It had crank windows, undersized tires and lacked air conditioning and anti-lock brakes.

So far this year, Aveo’s average selling price is $15,103, according to car shopping site Edmunds.com. Only the Accent, made in Korea by Hyundai, has been selling for less than the Aveo, with consumers paying an average of $15,062, according to Edmunds. Ford’s Fiesta and Honda’s Fit sell for more than $17,200 each.

DETROIT – General Motors Co. is recalling more than 50,000 Cadillac SRX crossovers in North America to reprogram airbags.

GM told the National Highway Traffic Safety Administration that the right side head-protecting air bag won’t deploy in a crash if no one is in the front seat, reported The Detroit News.

As a result, a backseat passenger may not be fully protected and could get hurt. GM spokesman Alan Adler said no crashes or injuries have been reported.

“The air bags are programmed to turn off the right side roof rail air bag if the passenger-sensing system determines that the right front passenger seat is unoccupied,” NHTSA said, even though the owner’s manual says it will still deploy. As a result, the vehicle does not comply with federal safety requirements.

The recall affects SRXs built over a three-month period — 47,400 SRXs sold in the United States and about 3,100 in Canada and Mexico. Dealers will reprogram the sensors and GM will start notifying owners today.

No parts are required. The repair is expected to take less than 30 minutes not counting waiting time at the dealership.

This is a North American issue only, because other exported models use a manual key to disable the passenger side airbag. The key disable system does not suppress the roof rail airbags, GM said.

The U.S. Treasury Department is reluctant to sell part of its 33 percent stake in General Motors Co. to the company at this point because the price is too low, a person familiar with the matter said.

Executives at Detroit-based GM have discussed buying some of the Treasury’s shares or allowing all holders of common stock to sell back shares, said the person, who asked not to be identified revealing private discussions. The Treasury doesn’t want to sell GM while the shares are trading at 13 percent less than the $33 initial public offering price, the person said.

The government is also disinterested in the idea because selling shares to GM may lead to criticism that the automaker is getting a preferential deal, the person said.

The Treasury Department sold 28 percent of GM at $33 in its IPO in November. The government would like to get at least that price in a stock sale and preferably more, people familiar with the matter have said.

The government’s 500 million shares in Detroit-based GM would be valued at about $14.3 billion as of yesterday’s closing price, reported Bloomberg. GM rose 22 cents to $28.78 at 4 p.m. in New York Stock Exchange composite trading.

GM management is considering uses for the $30.6 billion in cash and marketable securities that the automaker had at the end of the first quarter.

Chief Executive Officer Dan Akerson said the company is considering all uses for its cash, including paying down debt and shoring up the company’s pension plan. The automaker said it had $30.6 billion in cash at the end of the first quarter.

Akerson declined to comment on the prospect of a share buyback.

“We’ll see,” he told reporters before today’s annual meeting.

JPMorgan Chase & Co. and Morgan Stanley, which led investment banks on General Motors Co.’s initial public offering, probably will handle the next sale of the automaker’s shares, said a person familiar with the matter.

The U.S. Treasury Department, the Detroit-based automaker’s biggest shareholder, won’t sell more shares until at least August to wait for the stock price to climb, two people familiar with the decision have said.

While the Treasury, which owns 33 percent of GM, can file for a secondary offering as soon as May 22 using the same form as for an IPO, which requires a lengthy regulatory review, reported Bloomberg. At Morgan Stanley’s suggestion, the department decided to wait until July 1, when it can file a simpler document and have more flexibility on timing, said the people.

“You need a megabank to underwrite a deal that is the size of what the U.S. Treasury will be selling,” said Peter Bible, GM’s former chief accounting officer who now heads the public companies group for New York-based accounting firm EisnerAmper LLP. “Those two make the most sense given their size. They did a tremendous job on the IPO.”

The U.S., which invested $49.5 billion in GM during its 2009 bankruptcy and restructuring, still is talking with other investment banks about underwriting roles, and a final decision won’t be made until closer to a stock sale, said the person, who asked not to be identified revealing private plans.

GM fell 35 cents to $31.07 at 4:15 p.m. in New York Stock Exchange composite trading.

Treasury officials put off deciding on the timing of a GM secondary offering because the stock has mostly traded below the $33 per-share IPO price. While the company beat earnings expectations on May 5, the stock fell 3.1 percent that day. The lower price affirmed the Treasury’s decision that it would be better to wait until the second-quarter profit is announced, the people said.

“The longer they wait, the better the return for the Treasury will be and for the taxpayer,” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, said in a telephone interview yesterday. “The auto market in the U.S. is recovering, and it’s a fairly consistent recovery.”

The Treasury doesn’t expect to sell its remaining 33 percent stake in a single secondary offering, one of the people said.

If Treasury opted to file an S-1 registration statement, the kind of document used for an IPO, the offering would have to go through a rigorous review that could last a month or longer, similar to an initial stock sale, Bible said in an interview today.

With the simpler S-3 filing, the SEC can review GM documents it already has, so the registration could be done in days, Bible said. That would allow the government to better time a sale to a higher price.

GM’s management and President Barack Obama’s administration want to end the almost two-year period of government ownership, the people said. The Treasury doesn’t expect to get the $44 average share price needed to break even on the $49.5 billion investment, they said. Further share sales need to average $53 a share to make up for the $33 per-share IPO price.

“We’re going to lose money in the auto industry on net, but we did this for the jobs we were going to save, not to maximize return,” Treasury Secretary Timothy F. Geithner said at a Detroit Economic Club event on April 28. “We’re not a private investor. Our job was to protect the country.”

The Treasury provided $85 billion of commitments to the auto industry, which included $64 billion to GM and Chrysler Group LLC, according to the Congressional Budget Office. The remaining assistance was provided to auto-parts suppliers and to finance arms Chrysler Financial Corp. and GMAC Inc., which is now known as Ally Financial Inc.

The Treasury aims to get at least the $33 IPO price and would prefer to sell shares in the high $30s or into the $40 range, where most analysts have set their target price, the people said. The department also wants to begin selling shares this year, they said.

GM raised more than $23 billion, mostly for U.S. and Canadian governments and a union health fund, selling common and preferred stock in its initial public offering in November. Bank of America Corp. and Citigroup Inc. were also listed among leaders of the investment banks.

The Treasury plans to wait for GM to announce a second- quarter profit before selling any more shares, which could be in August or September, or it may wait until November, after third- quarter results, the people said.

“What Treasury does with their GM shares is entirely up to them,” Jim Cain, a GM spokesman, said yesterday. “We’re focused on growing profitably around the world, further strengthening our balance sheet and fully funding our pension plan.”

Government ownership is weighing down GM shares, said David Whiston, an analyst with Chicago-based Morningstar Inc.

“A portfolio manager who believes the GM story may stay on the sidelines because when Treasury files to sell, the stock could sink,” he said in a telephone interview yesterday. “Other investors don’t want to invest simply because there is government ownership.”

Chief Executive Officer Dan Akerson bought $939,900 in shares of the automaker, GM disclosed today in a regulatory filing. The purchase of 30,000 shares at $31.33 apiece was a personal investment by Akerson, said Jim Cain, a GM spokesman.