DETROIT, Jan 29 (Reuters) - General Motors Corp. will announce on Thursday plans to invest $300 million in a Michigan plant to make a six-speed transmission for rear-wheel drive cars, officials familiar with the plans said on Wednesday.
GM's investment at its Willow Run Transmission plant in Ypsilanti will save hundreds of the plant's 4,000 hourly jobs, the sources said.
In November, the state of Michigan said GM would receive a $17.1 million state single-business tax credit in return for a $300 million investment at Willow Run.
The company and the union were still holding talks on Wednesday to determine the amount of component work to be done inside the plant, rather than out-sourced, which would affect the amount of investment, union sources said.
"The assembly of the work has been pretty much decided," one union source said. "The amount of the component work that GM is going to keep in-house is being discussed. Our desire is to get every bit of the work we possibly can. But GM of course wants to outsource some of the component work."
Production of the new six-speed transmissions would begin in 2005, the sources said.
In October, GM and Ford Motor Co. agreed to jointly-develop a six-speed transmission for front-wheel drive cars. That transmission is not expected to go into production until the latter half of this decade, and Willow Run is among several GM plants competing for that work, the sources said.
GM shares were down 62 cents or about 1.66 percent at $36.78 in early trade on the New York Stock Exchange. (Reporting by Michael Ellis, editing by David Gregorio; [email protected], Reuters Messaging: [email protected]; 313-870-0203)