TOLEDO, Ohio ( TheStreet) -- GM ( GM) said Tuesday it will invest $240 million to expand its Toledo transmission plan, underscoring the automaker's resurgence and its plan to invest about $2 billion in eight states, mainly in the Midwest, over the next few months. CEO Dan Akerson made the announcement Tuesday, saying GM will create or retain 250 jobs in Toledo and, with the $2 billion investment, will create or retain about 4,000 jobs at 17 plants.
Last week, GM said it would
invest $131 million in the Kentucky plant where it makes Corvettes. GM's plans provide an indication of the automobile industry's continued importance to the U.S. economy, and could even buttress support for the Obama administration's decision to bail out GM in 2009. "Not everybody in America agreed with us -- Not everyone in the Congress agreed with us," said U.S. Rep. Marcy Kaptor, D-Ohio, who also spoke at the event. Akerson said that each job GM creates leads to seven additional derivative job. A study by the Center for Automotive Research indicates that the ripple effect of GM's planned investments would add $2.9 billion to the U.S. GDP and create or retain more than 28,000 jobs. The GM investment is particularly important because it helps to revive a region that has long relied on the auto industry, said Matt Blunt, president of the American Automotive Policy Council, which represents the Detroit Three. "People get very excited about new plants" like the planned Volkswagen plant in Chattanooga, Tenn., said Blunt, a former Missouri governor. "But they fail to give companies credit for reinvesting." Two out of every three U.S. autoworkers are employed by the Detroit Three, whose investments far outstrip investments by foreign-based automakers, Blunt said. In depressed Toledo, the investment is big news. GM set up shop in Toledo in 1916 and opened the existing transmission plant 54 years ago. Ohio Gov. John Kasich said his administration "will move heaven and earth" to add jobs and stressed the state's reliance on manufacturing, noting "some people the Lord made to make things." Although GM earnings last week disappointed investors, it is clear that the auto industry is once again growing. In the first quarter, Chrysler, Ford ( F) and GM all reported sales gains and profitable quarters. GM's first quarter profit was its fifth in a row. TrueCar.com analyst Jesse Toprak said GM's investments will enable the company to "further balance its product portfolio to better respond to changing consumer needs. "GM can't afford not to make these investment if it wants to be competitive in the long run," he said. In January, Ford said it would invest $400 million in a Kansas City, Mo. assembly plant, while Chrysler said in November that it will invest $843 million in its Kokomo, Ind., plant. -- Written by Ted Reed in Charlotte, N.C. . >To contact the writer of this article, click here: Ted Reed