GM said to invest more than $850 mln in 5 plants

General Motors Co. plans to announce tomorrow that it will invest more than $850 million to upgrade five North American factories, three people familiar with the matter said.

The spending on plants that make engines, transmissions and related parts will preserve 1,600 jobs, said the people, who asked not to be identified because the details aren't public yet. Kim Carpenter, a spokeswoman at Detroit-based GM, said the company is making announcements at several facilities. She declined to give details.

"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, Michigan. "Heavy investment and improved fuel economy will be on every company's agenda."

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.

The investments will be at facilities in Tonawanda, New York; Bay City, Michigan; Bedford, Indiana; Defiance, Ohio; and St. Catharines, Ontario, the people said. The largest amount is slated to go to the Tonawanda plant, they said.

Chief Executive Officer Ed Whitacre is trying to return GM to profitability as early as this year, a step the company has said is needed before it can make an initial public offering of shares. The U.S. government owns a 61 percent stake in GM after aiding the automaker's July 2009 exit from bankruptcy.