GM to retool idled UAW plant for small cars

DETROIT (Reuters) - General Motors Corp said on Friday it would build a future small car in the United States by retooling one of its idled plants represented by the United Auto Workers union.

The plan for U.S. small car production is part of the automaker's new cost-saving agreement with the UAW, under which the union would own a 17.5 percent stake in a reorganized automaker in return for retiree healthcare concessions.

GM, which is expected to file for bankruptcy by a government-imposed deadline of June 1, has agreed to pay half of its $20 billion debt owed to a union-aligned healthcare trust in stock, instead of cash.

Prior to the agreement, the UAW had resisted GM's restructuring plan which would have resulted in the loss of 16 UAW plants and 21,000 factory jobs.

The retooled plant, the site for which has yet to be determined, will be capable of building 160,000 cars annually and can manufacture a combination of both small and compact vehicles, GM said.

GM did not elaborate on which specific small car model it planned to build in the United States but said the vehicle would add to its lineup of U.S.-built fuel-efficient cars including the Chevrolet Cruze and the Chevrolet Volt plug-in hybrid.

The automaker plans to build the Volt at a Detroit plant, and the Cruze at its Youngstown, Ohio, plant, which is now building the Chevy Cobalt.

(Reporting by Soyoung Kim, editing by Matthew Lewis)