General Motors will invest $90 million to retool its Ingersoll, Ont., CAMI plant.

The Ingersoll CAMI plant at one point built GM models like the Chevrolet Equinox, the Pontiac Torrent and the Suzuki XL7. (Dave Chidley/Canadian Press)

"This investment is an excellent example of what happens when you get the product right," GM Canada president Arturo Elias said. "If the product is right, everything else follows — increased production, increased employment and strong market demand.

"The vehicles we're building in Canada are doing very well and product excellence drives an announcement like this," he said.

The planning and retooling work will begin immediately, and the project is anticipated to be completed in approximately seven months.

The move is an encouraging sign both for Ontario's battered automotive industry and the broader economy.

The move will increase output of the Chevrolet Equinox and GMC Terrain vehicles. Both models have been one of the automaker's biggest sellers of late, and the upgrades will allow the site to build an additional 40,000 vehicles annually.

After the upgrades, the plant will effectively be at maximum capacity of 220,000 units, Elias said.

The move will mean some 155 laid-off workers will be recalled. Last month, the company recalled 350 laid-off workers as it boosted production in response to a surge in demand from the U.S. Cash for Clunkers auto rebate program.

Other sites may benefit

The investment at Ingersoll could be good news for GM Canada's two parts plants in southern Ontario as well.

"If somebody told me a year ago that the CAMI plant was going to go back to [full capacity] I would have said our expectations were too high," Canadian Autoworkers head Ken Lewenza said.

GM Canada makes transmissions at a plant in Windsor in southwestern Ontario, a factory slated for closure next year, and powertrain components at a plant in St. Catharines.

Including its flagship Oshawa assembly plant, GM employs about 9,000 people at various plants in southern Ontario.

"Now I'm excited because for every assembly job, there's another six or seven jobs created [elsewhere]," he said.

When the company announced its restructuring plan after falling into bankruptcy in the spring, it said it would spend $2.2 billion on capital and $1 billion on research and development in Canada between now and 2016.