General Motors will confirm Tuesday it will proceed with a $245-million investment for its powertrain operations in St. Catharines that the company and Ottawa originally revealed almost two years ago.

Industry sources said Monday that GM of Canada Ltd. plans to announce it will move ahead with a project for construction of a manufacturing system to produce fuel-efficient six-speed, front-wheel drive transmissions starting in 2012.

GM said Monday that new president Kevin Williams will make “an important announcement” at the powertrain operations in the city on Tuesday morning without providing any further details.

Federal Industry Minister Tony Clement and Ontario Transportation Minister Jim Bradley, the MPP for St. Catharines, will also attend Tuesday’s announcement.

Sources familiar with GM’s plans said the automaker is now ready to proceed with a project that it initially disclosed in September 2008 on the eve of the federal election.

“They (GM) had some work yet to do before they could actually go ahead with it,” said one insider.

The Canadian Auto Workers, which represents production and skilled trades employees, had already agreed to changes in job duties and practices to lower costs significantly to make company investment more attractive.

At that time in 2008, GM did not make a formal announcement, issue a news release or hold a press conference about the investment.

“They (GM) just weren’t ready,” said the source.

But the federal government released an exchange of letters with GM outlining the investment and a financial break for the company.

Under that arrangement, the federal and Ontario governments indicated that in exchange for the investment pledge, they would not force the company to meet early repayment obligations for missing job commitments in a $435-million loan package for the automaker’s massive 2005 Beacon Project.

GM could not fulfill the minimum job commitments because of a continuing decline in the company’s fortunes as the popularity of its products declined and costs rose.

The latest investment, which will secure the future of 400 jobs, follows a series of positive developments at GM including the announcement of $235 million in spending at the same St. Catharines operation in April.

It will use that money to build the next generation of the company’s aluminum small block V8 engines at the plant in the second half of 2013 and preserve about 400 jobs for several years.

GM added the engines will be E85 ethanol capable and meet stringent government emissions during the next decade.

The engines will improve fuel efficiency through the use of direct injection and an advanced combustion system design, according to the company. GM’s two operations in St. Catharines, which have been ravaged during the last decade because of the company’s decline, currently employ about 1,600.

GM has been busy revamping its Canadian operations and eliminating thousands of jobs as part of a major restructuring in the last few years. The company has already closed its Oshawa truck plant and consolidated car operations on the same site and plans to close a transmission factory in Windsor.

Last year, it received several billion dollars in aid from the federal and Ontario governments to stay alive. Those two governments now hold about 12 per cent ownership of GM’s Detroit parent.

In addition to the two St. Catharines investments, GM has increased production with a third shift and 600 jobs at its assembly plant in Oshawa to meet hot demand for Chevrolet Equinox crossover sport utility vehicles.

The company has also added a third shift and recalled 350 workers at CAMI Automotive assembly plant in Ingersoll because of the popularity of the Equinox and Terrain, another cross-over vehicle.

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