(Adds detail on increase in plant capacity in fourth paragraph, byline )
By Jui Chakravorty
YPSILANTI, Mich., May 30 (Reuters) -Corp. on Tuesday said it would invest $170 million to produce more efficient six-speed automatic transmissions.
The company said the new transmissions produced at the Ypsilanti, Michigan, plant, which will debut in some 2007 Cadillac models, will offer better performance and improved fuel economy.
GM said it would invest $125 million in the Ypsilanti transmission plant and another $45 million in vendor tooling and other supporting facilities and equipment.
The additional investment will take the plant's production capacity to some 2,650 transmissions per day, up from 660 now, company officials said.
GM said by 2010 it expects to have as many of 10 variants of the new six-speed automatic transmissions in its cars and sport utility vehicles, with production of up to 3 million of the units annually.
GM had announced the outline of the new investment program in February, but provided more detail on Tuesday.
The new investment by GM comes as the world's largest automaker struggles to shed capacity to adjust to a slide in its share of the U.S. market for cars and trucks.
GM has announced plans to shut 12 plants and to cut about 30,000 jobs, in part through early retirement incentives offered to more than 110,000 of its unionized factory workers.
GM shares gained almost 14 percent last week, the best weekly performance in four months. The stock's gains followed upgrades by Wall Street analysts and a growing view that GM was on track to meet cost-cutting targets through relatively high acceptance rates for the early retirement packages by workers represented by the United Auto Workers union.
GM's Ypsilanti transmission plant employs about 3,600 hourly and salaried workers. The plant began as a production hub for U.S. warplanes during World War Two.