DETROIT -- General Motors Co. said today it will invest $893 million to upgrade five North American factories to make its next-generation V-8 engines more fuel efficient.
The new V-8s will differ from the current versions by using direct injection and a new combustion system, spokeswoman Sharon Basel said. The next-generation engines will also be lighter. GM will build them exclusively from aluminum, compared with the current versions' aluminum and iron makeup, Basel said. All of the engines will be able to run on E85 ethanol.
GM is designing the engines to meet this decade's federal fuel economy standards, the automaker said today in a statement. Fuel economy requirements will increase to a fleet average of 35.5 mpg in the 2016 model year, compared with 27.3 mpg in 2011.
New York gets biggest project
To build the engines, GM will renovate or retool powertrain factories in Tonawanda, N.Y.; Bay City, Mich.; Bedford, Ind.; Defiance, Ohio; and St. Catharines, Ontario. The investment will create or save positions for about 1,600 workers, GM said.
Tonawanda will get $400 million, creating or preserving more than 710 jobs; St. Catharines, $235 million and about 400 jobs; Defiance, $115 million and up to 189 jobs; Bedford, $111 million and about 245 jobs; Bay City, $32 million and more than 80 jobs. Any new hires would first come from GM's pool of laid off workers, which currently numbers more than 4,000 in the U.S., spokeswoman Kim Carpenter said.
GM has yet to determine the timing for the renovations and hiring, Carpenter said. The spokeswomen declined to say when GM intended to bring the new engines to market or what vehicles they would be in.
GM uses its current V-8 family of engines in full-sized pickups, SUVs, vans and some performance cars, Basel said.
GM is boosting spending on more fuel-efficient engines ahead of tougher fuel economy standards and in anticipation of another rise in gas prices that would spur consumers to buy fuel-sipping vehicles.
“There is no doubt that a major differentiator going forward will be powertrain technology,” said Michael Robinet, vice president at research firm CSM Worldwide in Northville, Mich. “Heavy investment and improved fuel economy will be on every company's agenda.”
The plans to retain or create powertrain jobs are the latest of GM's rehiring moves since it exited bankruptcy in July. GM said its post-bankruptcy production announcements have restored or created more than 9,100 jobs.
Bloomberg contributed to this report.