General Motors will invest about $US300 million to upgrade a factory in Tonawanda, New York, so it can build two new six-cylinder engines starting in 2005, Bloomberg News reported.

GM spokeswoman Kathy Bommarito told Bloomberg that the 3.5-litre and 3.9-litre V-6 engines will be used for undisclosed vehicles beginning with the 2006 model year and about 720 of the plant's workers will be retained to assemble the engines.

The plant currently employs 3,000 hourly and 340 salaried workers to make six different engines, Bloomberg News said.

The news agency noted that GM is developing engines with better fuel economy to bring its US fleet in line with federal standards and others with added horsepower to attract customers from rivals.

Just-auto understands that the V6s to be built in New York state will be from the same new engine 'family' as those to be built at GM's Holden Engine Company plant in Melbourne, Australia, from 2005.