GM invests $100 mln for new diesel engine

Detroit, June 16: General Motors Corp. said it will invest $100 million in its engine plant in Tonawanda, New York, to make a new diesel engine for light-duty trucks that improves fuel efficiency by 25 percent and reduces carbon-dioxide emissions by 13 percent.

The automaker said it will make the 4.5-liter V-8 engines for North American pickup trucks and the Hummer H2 sport utility vehicles built after 2009.

The announcement comes as GM, long known for its dependence on gas-guzzling SUVs, is trying to improve its image and reverse sliding sales and slumping market share by shifting its product line-up to more fuel-efficient vehicles.

''GM is transforming its product portfolio to reduce fuel consumption and emissions, and the 4.5-liter V-8 diesel is an integral part of that transformation,'' said John Buttermore, GM's vice president of global powertrain manufacturing.

Production of the engine is scheduled to begin in the fourth quarter of 2009, GM said.

''It will meet the stringent 2010 emissions standards, and it will be compliant in all 50 states, making it one of the cleanest diesel vehicles ever produced,'' said Tom Stephens, GM's vice president of global powertrain and quality.

Union and local government officials had been trying to win production of the new diesel engine for the plant near Buffalo in western New York state.

Sen. Hillary Rodham Clinton wrote a letter to GM Chief Executive Rick Wagoner and Erie County officials in late May approved a $350,000 sales tax break to clinch the new investment in the plant.

The $100 million investment includes renovation, new machinery, equipment and special tooling. GM said it will invest an additional $41 million for vendor tooling, containers and investments at other locations to support this operation.

In January, GM said it would invest $300 million in the plant to make new V-8 engines for its luxury vehicles, slated for production in 2009.

Friday's announcement brings GM's total investment in the plant to $1.6 billion over the last ten years.

The plant employs 1,825 people and makes engines for several GM vehicles including the Chevrolet Cobalt, HHR, Malibu, Impala and Saturn Ion.

Reuters