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Published: Tuesday, 4/27/2010

GM to invest $115M in Defiance Powertrain, saves up to 190 jobs

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER

DEFIANCE - General Motors Co. said Tuesday it will spend $115 million, saving up to 190 jobs, at Defiance Powertrain as part of a bigger upgrade of five factories making more fuel efficient engines.

The money will buy new machinery and equipment to make small-block truck and car aluminum engine castings, GM said. In all, GM is investing $890 million at five factories.

The new castings will be for 2013 vehicle models. The 1.9 million square foot plant, which makes cast iron castings now for a V-8 engine, has 1,350 hourly and salaried employees.

The automaker said the money will preserve or create roughly 1,600 jobs at factories in Defiance; Tonawanda, N.Y.; St. Catherines, Ontario; Bay City, Mich.; and Bedford, Ind.

GM said it would invest $400 million in Tonawanda, resulting in more than 710 jobs; $235 million in St. Catherines, resulting in 400 jobs; $111 million in Bedford, resulting in about 245 jobs; and $32 million in Bay City, resulting in more than 80 jobs.

Tom Gallagher, GM Defiance plant manager, said, "This really is just wonderful news."

The added work helps secure plant's secure future, he said. Since the automaker emerged from bankruptcy a year ago, it has announced more than $2.3 billion in investments in plants in North America, he said,. "and I'm proud to say that two of those investments were here in Defiance."

Mark Barbash, Ohio Department of Development, told about 100 workers gathered for announcement at the plant Tuesday: "It really is a testament to the faith that GM has in the work you do everyday."

The investments include renovation of factories and installing flexible engine machinery and assembly equipment, the company said.

GM, the largest U.S. automaker, is boosting its spending on more fuel-efficient engines as governments push for reduced pollutant emissions and as rising fuel prices spur consumer demand for vehicle with better gasoline mileage.

"These latest investments show our commitment to improving fuel economy for buyers of every GM car, truck, and crossover," Mark Reuss, president of GM North America, said in a statement.

The new engine will rely exclusively on aluminum engine blocks, which are lighter and help fuel efficiency, the company said. It will be used in vehicles such as the Camaro and the Chevy Silverado pickup.

GM announced in February a $59 million investment in its Defiance factory which meant the recall of the remaining 57 workers on layoff and the hiring of another 20 workers. The project was part of $494 million the automaker was putting into its next generation, fuel-efficient Ecotec engine, including a $435 million investment to an engine plant in Tonawanda, N.Y.

That money was to pay for machinery and tooling to support annual production of 188,000 precision sand cast blocks for the engine, GM said. The Defiance foundry also was awarded $518,232 this year from a state Energy Program that was funded by the 2009 federal stimulus package.

The Ecotec engine is slated to be used in the Chevrolet Cobalt and Chevrolet Cruze models to be built in GM's plant in Lordstown, Ohio. The Cobalt is in production, and the Cruze is slated to begin production this year.

Both small vehicles play an important role in GM's strategy of improving the fuel economy of its vehicles. The Cruze is expected to deliver up to 40 miles per gallon on the highway and have a cruising range of more than 500 miles.

The Defiance foundry also is among the plants that will have a hand in producing the Volt. The plant will make castings for what is anticipated to be an initial year's production of fewer than 10,000 2010 Chevy Volts, GM said.

The Volt is an electric vehicle with extended-range capability. Under normal conditions, it is designed to drive up to 40 miles on electricity without using gasoline or producing tailpipe emissions, with a plug-in charger that will allow owners to recharge its batteries at home.



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