General Motors Corp. (GM) is under pressure from the U.S. government to shed its GMC brand as the company races to devise a new restructuring plan by a June 1 deadline, said people familiar with the discussions.

The talks come as GM prepares to deliver the first of several updates on the company's restructuring activities. GM interim Chief Executive Fritz Henderson will hold a conference call with reporters Friday morning to discuss the company's progress, GM said Thursday.

The GMC brand, comprised mostly of pickup trucks and sport-utility vehicles, was slated to remain a part of GM even after the company slimmed down. However, the U.S. government isn't convinced GMC has a viable future as part of GM, said the people familiar with the talks.

GM already is in the process of getting rid of its money-losing Hummer, Saab and Saturn lines, which have been hurt by slumping sales.

A GM spokesman said Thursday the company's strategy, which includes combining Buick, Pontiac and GMC into a single sales network, remains unchanged. A decision on GMC's future hasn't been reached, he said.

Losing GMC, which produces vehicles similar to those offered by Chevrolet, would be a serious blow to dealers that in recent years have consolidated their GMC, Pontiac and Buick stores.

Revenue from profitable GMC vehicles has long helped offset less-than-stellar performance by Buick and Pontiac models. Those dealers are likely to fight any move by GM to shed GMC.

The future of GMC, as well as of the much smaller Pontiac brand, is being discussed this week as GM meets with officials from President Barack Obama's auto task force, said people familiar with the talks .

Unlike GMC, GM never said it intended to keep Pontiac as a major brand. The plan has been to let it go on with one or two models.

The pressure to divest GMC shows how far the government may be willing to go to push GM to turn itself into a profitable company. The Obama administration gained power over GM's restructuring after the car maker took $13.4 billion in U.S. loans and is seeking additional aid to keep itself out of bankruptcy. Bloomberg News first reported GM was considering axing GMC and Pontiac.

The White House last month shot down GM's earlier recovery plan as insufficient and gave the company until June 1 to come up with a more satisfactory strategy or face bankruptcy.

GMC sales fell 25% in 2008 as the economic slump and volatile gas prices drove down demand for pickup trucks and SUVs. The company's overall sales fell 22%. GMC accounts for about 12% of GM's sales, a far larger share than the other brands GM plans to shed. GMC vehicles also tend to deliver higher profit margins.

GM said Wednesday it has several potential buyers for Saturn, and the company said last month it has received interest in Hummer as well.

-By Sharon Terlep, 248-204-5532; sharon.terlep@dowjones.com.