General Motors to Invest in $500 Million in Fuel-Efficient Engines

Automaker says investment will create 550 new jobs at three U.S. plants.

General Motors announced plans to invest $494 million in fuel-efficient engines Thursday amid a broader expansion of its U.S. operations following years of painful cuts. The investment will create 550 new jobs at three U.S. plants that are involved in the production of its four-cylinder Ecotec engine, the automaker said.

"GM is transforming its product portfolio to reduce fuel consumption and emissions, and the next-generation Ecotec engine is an integral part of that transformation," said Denise Johnson, GM vice president of labor relations.

GM shuttered scores of plants and slashed its U.S. workforce by more than half in the past five years, as it restructured its operations in the face of a steady market share loss to Asian rivals. But the U.S. automaker emerged from bankruptcy protection last year with a leaner operation and substantially improved product offerings.

It has been steadily ramping up production as overall demand improves following the industry's worst year in decades.

And the expansion comes at a time when Japanese rival Toyota -- which dethroned GM as the world's biggest automaker in 2008 -- has been forced to halt production and sales of some of its most popular U.S. models as it struggles to cope with a growing number of safety recalls.

GM's U.S. production is forecast to reach 650,000 vehicles in the first quarter, a dramatic increase from the 371,000 vehicles built a year earlier. Worldwide production is forecast to increase to 2 million vehicles in the first quarter from 1.33 million a year earlier, according to the company.

Its workforce, however, is not expected to expand significantly. The firm currently employs 46,000 hourly and 24,000 salaried workers in the United States. Global employment totals 204,000 people.

In 2004 -- the year preceding the most recent round of major cuts -- GM employed 111,000 hourly and 39,000 salaried U.S. workers out of 324,000 people worldwide. GM's employment levels peaked in 1986, with 379,000 hourly and 253,000 salaried US workers and global employment of 876,000 people.

Copyright Agence France-Presse, 2010

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