Fuel-efficient cars in demand. So GM invests in parts.

General Motors Co., responding to demand for more fuel-efficient transmissions, plans to add up to 400 workers and invest $260 million at a factory in Toledo, Ohio, a move that is part of a larger investment at plants in eight states.

The company plans to put $2 billion into 17 facilities, a person briefed on the matter said. The time frame for the investments was not clear, and the person would not say how many jobs would be created. The person did not want to be identified because the investments have not been formally announced.

Auto companies frequently have to spend millions to upgrade factories to build new models or the latest parts.

At the Toledo plant, which now builds transmissions for trucks and small cars, GM will make a new eight-speed automatic transmission sometime toward the end of next year for fuel-efficient cars, Ray Wood, president of the United Auto Workers union local at the factory, said Monday.

CEO Dan Akerson and UAW Vice President Joe Ashton are scheduled to make the formal announcement Tuesday at the factory along with elected officials, Wood said.

The Toledo hiring plans are another sign that GM is approaching a full recovery from its 2009 bankruptcy and government bailout. The new jobs would add to the 9,500 that GM has created or retained since leaving bankruptcy in July of 2009.

GM issued a statement saying that Akerson would be at the plant for an unspecified announcement Tuesday afternoon, but it did not give specifics. Messages were left Monday for GM representatives

The plant, which now employs about 1,600 workers making front- and rear-drive transmissions for trucks and cars, could get 250 to 400 more jobs, Wood said. They would be paid GM's entry-level wage of $14 per hour, about half the wages of a veteran UAW worker. The union agreed to the lower wages in contract concessions to help the company when it was headed toward bankruptcy protection two years ago.

Wood said union officials expect GM will have rehired all of its remaining laid-off workers by September, so most of the people added at the transmission plant should be new hires.

The factory now makes six-speed automatic transmissions for the hot-selling, fuel-efficient Chevrolet Cruze compact and already is working hard to keep up with demand, Wood said. It was unclear which vehicle would get the new eight-speed transmission, which would boost gas mileage by shifting into the most efficient gear.

Creating new jobs is a far different situation for GM than just two years ago. It had 141,000 total U.S employees in 2005, but that dropped to 75,000 by the end of 2009 as the company slashed costs as demand for its products fell. GM closed 12 U.S. factories since May 2008. Its total U.S. employment rose to 77,000 at the end of March.

Details of the additional $2 billion investment were not available Monday. The $2 billion figure was reported Monday by the Detroit Free Press.