General Motors will spend up to US$500m to build a new assembly line for its next-generation Ecotec four-cylinder engine at its Spring Hill, Tennessee, manufacturing complex, and recall about 400 laid-off workers to make the engines, a source told a local paper.

GM declined to confirm the plans but did say it would issue a media advisory ahead of a 9am Friday announcement at the plant.

Spring Hill, originally built in the 1980s for the now defunct Saturn brand, already builds two Ecotec I4 engines, employing about 400 workers in that operation, The Tennesseean said.

The 2.4-litre and a turbocharged two litre version are used in a variety of the automaker’s vehicles, including the Chevrolet Malibu and Equinox, GMC Terrain and Buick Lacrosse.

GM furloughed about 2,000 workers at the plant late last year when assembly of the Chevrolet Traverse crossover was moved to Lansing, Michigan. But 1,045 workers remain employed there, including 899 hourly and 146 salaried, building engines and operating a stamping facility that makes body panels for the Traverse, the paper noted.

About 400 of those workers assemble the current Ecotec engines on two separate lines, but that number would double when the third line opens, the source said.

While the new line would build the next generation of the fuel-efficient Ecotec engine, the other two lines would continue making the current generation engines for up to five years. Most of those engines would be exported, the source said, while the newer generation would be used in GM vehicles built for North America.

The United Auto Workers union said any new jobs created at Spring Hill would be filled by those who were laid off when Traverse production ceased. They would be called back based on seniority.

About 800 have moved on to other GM plants, but most of the rest are still available and living in the area, the union has said.

GM began building the Ecotec engines at Spring Hill in 2002 and the tally was over 2m by the end of September 2009. Exports to China began in 2005.