DETROIT (Bloomberg) -- General Motors Co. $2 billion investment in its U.S. factories improves the outlook for the automaker's contract negotiations with the UAW, a union official said today.
"You do better in negotiations when the economy and the company are doing better," said Norwood Jewell, director of the UAW's 1C region, which represents workers in southern Michigan. "Better doesn't mean making more money, necessarily. It could mean bringing more jobs back to this country."
GM said today it will spend $109 million and retain or add 96 jobs to expand small-engine plants in Flint and Bay City, Michigan. The factories are among the 17 sites Detroit-based GM has said will get $2 billion of investments in the coming months as it works to boost production and win market share.
About $84 million of the investment announced today will go to Flint and $25 million will be spent at Bay City. The 1.4- liter engines made at the factories are used in small cars such as the Chevrolet Cruze and Volt plug-in hybrid, as well as the Sonic that begins sales later this year.
GM in October reversed plans to close an assembly plant in Orion Township, Mich., and retained 1,550 hourly and salaried jobs there to build the Sonic and Buick Verano. In order to get the product commitment from GM, the UAW agreed the factory would be staffed with about 40 percent of workers earning about half of the regular rate of $28 an hour.
Executives have recently signaled that GM's focus on building cars in the United States would grow, as shown by last week's announcement to invest $131 million revamping the Bowling Green, Ky., factory for a new version of the iconic Chevrolet Corvette sports car. The Kentucky announcement is part of the $2 billion plan.
GM said Monday it will invest $204 million at a Toledo, Ohio, engine plant and retain about 250 jobs so the plant can make a new eight-speed automatic transmission toward the end of 2012.
The UAW has to organize factories of foreign automakers such as Volkswagen AG in southern U.S. states, where wages are lower, Jewell said. Otherwise, the union may have to continue agreeing to lower wages to keep jobs in the country, he said.
UAW President Bob King has said he expects to organize at least one foreign-owned U.S. factory this year.
Reuters contributed to this report.