GM to invest $890M in engines, keeping 1,600 jobs

  • By Tom Krisher Associated Press
  • Tuesday, April 27, 2010 7:44am
  • Business

DETROIT — General Motors Co. will invest $890 million at five factories to upgrade its V-8 engines to make them more fuel efficient, preserving or creating roughly 1,600 jobs.

The automaker was to announce the investments today at factories in Tonawanda, N.Y.; St. Catherines, Ontario; Bay City, Mich.; Bedford, Ind., and Defiance, Ohio.

The spending, which has been in the works for a long time, will help GM meet government fuel economy standards that become fully effective in 2016.

Spokesman Tom Wilkinson said the investments will help the company boost fuel economy of its pickup trucks, sport utility vehicles and high-performance cars. The new engines will have aluminum blocks and more efficient technology that injects fuel directly into the combustion chambers.

Factories in Tonawanda and St. Catherines will make the next generation V-8 engines, while the other plants will make engine components.

GM would not give details of the fuel economy improvements. Federal corporate fuel economy standards call for a 35.5 miles-per-gallon fleet average within six years, up nearly 10 mpg from the current standards.

Each auto company will have a different fuel-efficiency target, based on its truck-car mix of vehicles. Automakers that build more small cars will have a higher target than companies with a range of cars and trucks.

GM’s passenger cars will have to hit 32.7 mpg in 2012 and increase to 36.9 mpg by 2016. Honda Motor Co., meanwhile, will need to reach passenger car targets of 33.8 mpg in 2012 and ramp up to 38.3 mpg in 2016.

Automakers also are expanding their portfolio of gas-electric hybrid vehicles and beginning to introduce electric cars and plug-in hybrids.

Consumers can expect improved engines, transmissions and tires, and the use of start-stop technology that halts the engine at stop lights to save fuel. They also can expect cost increases of around $926 per vehicle by 2016, the government said.

But the government says car owners will save more than $3,000 over the lives of their vehicles through better gas mileage.

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