General Motors will spend $332m to build a new six-speed, front wheel drive transmission at its Toledo plant, securing 600 jobs and also will invest $61m at its Defiance plant to make aluminium engine blocks, retaining 120 jobs.


The Associated Press (AP) reported that workers at the plants celebrated the news, even though the investments won’t create additional jobs. The company is going through a restructuring that has cut 35,000 production jobs.


Ohio’s economic development office put together a package of grants and loans to spur expansion at five GM plants in Ohio, including Toledo and Defiance, Lt. Governor Lee Fisher said, according to the report.


“These are not just grants and loans,” Fisher told cheering auto workers in Toledo. “These are the jobs of real people.”


State officials hope that GM will announce expansions at the three other plants by the end of the year, he said, according to the Associated Press. But he would not say where those plants are or how much the state is contributing until the announcements are made.


GM said earlier it would close its Powertrain plant in northern New York by the end of 2008, eliminating 500 jobs, though some of that work would be moved to Ohio.


Workers in Ohio told the news agency the investments mean greater job security.


AP said the transmission plant employs about 2,300 though 1,300 workers have left in little more than a year, taking early retirements and buyouts.


GM reportedly plans to renovate the Toledo plant and add new machinery, equipment and special tooling. Construction is scheduled to start in July, and production should begin by 2010, the automaker told the news agency.


The investment is in addition to a $540m investment GM announced last year for rear-wheel-drive, six-speed transmission production at the plant.


At the Defiance plant, work will begin in June on getting ready for production of the new engine, which will be made starting in late 2009. The plant employs about 1,800 workers, AP added.