By Ben Rooney, staff reporter April 27, 2010: 10:55 AM ET
from CCNMoney.com
NEW YORK (CNNMoney.com) — General Motors announced Tuesday a $890 million plan to upgrade of five plants in North America that the automaker says will create 1,600 jobs.
The goal is to overhaul the plants to produce a “new generation” of fuel efficient small block truck and car engines, GM said in a statement.
Under the plan, GM will invest $658 million to upgrade plants in Michigan, New York, Ohio and Indiana. It will also invest $235 million to renovate a facility in Canada.
The “next-generation” small block engines to be manufactured at the upgraded plants will have “unprecedented fuel efficiency,” GM said. The engines will be E85-ethanol capable, and are designed to meet increasingly stringent criteria emissions standards expected throughout this decade.
“GM is investing in our plants, restoring and creating jobs, and making progress toward our vision of designing, building and selling the world’s best vehicles,” said Mark Reuss, president of GM North America, in a statement.
Since GM emerged from bankruptcy last July, the company has announced investments of more than $2.3 billion at 22 facilities in the United States and Canada. GM said these investments restored or created more than 9,100 jobs.
GM said last week it had repaid the last of its $6.7 billion in emergency loans it had received from the U.S. and Canadian governments. Ed Whitacre, GM’s chief executive, said at the time the company would make significant investments in two plants in Kansas and Michigan to produce the next-generation Malibu.
But the company remains heavily indebted to the government.
Overall, GM received $50 billion worth of federal assistance in 2008 and 2009 to avoid going out of business. In return, the government got $2 billion in preferred stock and 61% of the company’s privately held common shares.
Earlier this month, GM said it suffered a loss of $3.4 billion in the fourth quarter of 2009. But the automaker offered an upbeat outlook, suggesting it may return to profitability in 2010.
Meanwhile, rival automaker Ford Motor (F, Fortune 500) reported a surge in first-quarter profit Tuesday. The Dearborn, Mich.-based company said strong sales of Fusion, F-150, Taurus and Focus cars and trucks helped it bump up U.S. market share by 2.7% in the first quarter to 16.6%.