GM to Invest $850 Million in Five North American Plants

General Motors will announce tomorrow that it will invest more than $850 million in retooling five North American factories, three unnamed sources told Automotive News. The investment will preserve 1,600 jobs at the five plants which build engines, transmissions and other powertrain parts.

GM will invest the money at factories in Tonawanda (New York), Bay City (Michigan), Bedford (Indiana), Defiance (Ohio) and St. Catharines (Ontario). The sources say the largest amount of money will be invested in the Tonawanda plant, $400 million. St. Catharines will receive $235 million, Defiance $115 million, Bedford $111 million and Bay City $32 million.

The Detroit News reported that the money will be used to produce next-generation engines for full-size pickups. Kim Carpenter, a GM spokeswoman, confirmed that the company is making announcements at several facilities but she declined to give details.

“There is no doubt that a major differentiator going forward will be powertrain technology. Heavy investment and improved fuel economy will be on every company's agenda,” said Michael Robinet, vice president at research firm CSM Worldwide in Northville, Michigan.

CEO Ed Whitacre is trying to return GM to profitability as early as this year, a step needed before the company can make an initial public offering of shares. The U.S. government owns a 61 percent stake in GM after aiding the automaker's July 2009 exit from bankruptcy. GM, the largest U.S. automaker, is increasing its spending on more fuel-efficient engines as governments worldwide insist for reduced pollutant emissions, and as rising fuel prices are increasing consumer demand for vehicles with better mileage.