General Motors Co said on Friday it would invest $65 million in existing engine plants in New York and Tennessee.

GM is spending $33 million at a plant in Tonawanda near Buffalo, New York, and will retain or create 100 jobs. The automaker also will put $32 million into a plant in Spring Hill, Tennessee, about 30 miles south of Nashville, and fill 63 jobs.

Most of the jobs at the plants will be filled by laid off workers. The Tonawanda plant has 83 workers on lay off, down from 179 after GM's 2009 bankruptcy.

There are about 300 Spring Hill plant workers on lay off now, down from about 600 at the end of 2010, GM said.

The investments are part of a $2 billion effort by GM announced in May that the company said would keep or add 4,000 jobs in 17 plants in eight U.S. states.

The newly announced New York investment of $33 million follows $825 million investment in that plant in 2010, said GM spokeswoman Mary Ann Brown.

The plants will make fuel-efficient 2.4-liter Ecotec four-cylinder engines for Chevrolet cars and crossover SUVs, including the Chevrolet Malibu sedan, Equinox crossover and GMC Terrain crossover.

The Malibu was the best-selling car in the U.S. market in May, behind two pickup truck lines including the F-series from Ford Motor Co and the Chevrolet Silverado.

Tonawanda plant general manager Steve Finch said the plant now employs 850 workers and that all workers now on layoff would be called back by next spring.

Over the next few years, if sales of Chevrolet models continue to improve, another 300 to 500 jobs may be added, Finch said.

The Spring Hill plant has an idled auto assembly portion. It was an active assembly plant until the automaker's 2009 bankruptcy. The engine plant at Spring Hill, site of the original Saturn brand plant in the 1980s, continued to operate.

GM shut its Saturn brand in its 2009 make-over after its U.S.-government sponsored bankruptcy and taxpayer bailout.

United Auto Worker vice president for GM affairs, Joe Ashton, said last month that the Spring Hill plant may be the first of GM's idled assembly plants to return to production. But neither he nor GM officials said when that may happen.

(Reporting by Neale Gulley)

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