GM confirms plans to build compact cars in U.S.

DETROIT -- The automaker said it will build 160,000 of the small cars here. Until now, automakers have said it was too costly to build small cars in the U.S. because the cost of doing business here is so high, and people aren't willing to spend that much on small cars.

But with increasing interest in greener technologies, and with a reduction in labor costs that come with a newly renegotiated labor contract, GM finally thinks it can make the proposition work.

"Small cars represent one of the fastest-growing segments in both the U.S. and around the world," GM CEO Fritz Henderson said. "We believe this car will be a winner with our current and future customers in the U.S."

GM is expected to file for bankruptcy protection Monday, when it will identify 14 factories, including four assembly plants, it plans to close as part of its restructuring.

The automaker had said in documents submitted to Congress that it planned to produce up to 51,000 subcompacts per year in China and ship them to the U.S. starting in 2011, when GM plans to start selling the Chevrolet Spark here. The three-door hatchback with a 1.2-liter turbocharged engine is about the size of a Honda Fit or Toyota Yaris and is set to go on sale in Europe next year.

But in an interview with the Associated Press on Thursday, United Auto Workers President Ron Gettelfinger said GM will not import the cars from China and had agreed as part of a concession deal to build them in the U.S.

"Small cars represent one of the fastest-growing segments in both the U.S. and around the world," GM CEO Fritz Henderson said. "We believe this car will be a winner with our current and future customers in the U.S."

Henderson said the UAW concessions ensure GM's manufacturing competitiveness in the U.S.

GM already builds the compact Chevrolet Cobalt and Pontiac G5 at a plant in Lordstown, Ohio, and it plans to retool that plant to start making a new small car, the Chevrolet Cruze, next year.