LORDSTOWN, Ohio (AP) -- General Motors Corp.'s decision to build a new generation of cars at its assembly plant here has been hailed by officials as a boost for a region that never recovered from the loss of steel jobs.

"It's the best economic news we've had probably in the last 30 to 40 years in the Mahoning Valley," said Joseph J. Angelo Jr., a Trumbull County commissioner.

Production of GM's new small car begins in late 2004, the company said. The plant currently builds the Chevrolet Cavalier and Pontiac Sunfire.

GM will invest about $500 million to retool and renovate the general assembly area and body shop in the assembly plant and build a new paint shop there. The metal stamping plant also will be refurbished.

"GM's investment in Lordstown signifies that GM will continue to aggressively compete in the very important, small car segment," said Gary Cowger, president of GM North America. He was the plant manager at Lordstown Assembly in the mid-1980s.

A public announcement was scheduled for today in Lordstown that will include GM officials, U.S. Sen. George Voinovich, R-Ohio, Ohio Gov. Bob Taft and local and union officials.

The complex employs more than 7,000 workers, of which 4,500 work in the assembly plant.

Trumbull County Commissioner James Tsagaris predicted the decision would lead to a spate of smaller projects as suppliers for the new vehicle line set up shop in the area.

"This means a lot. We've been waiting for this," he said.

But while keeping the facility open is good news for the community, the planned improvements are likely to cause a significant reduction in the assembly plant's work force and a shift to lower-wage jobs, said John Russo, director of labor studies at Youngstown State University.

More than 1,800 jobs will still be lost. But with an aging workforce, the automaker hopes that most, if not all, of the job cuts will be handled by retirements.

The revamped Lordstown complex will use manufacturing techniques in which independent suppliers at nearby plants sub-assemble such things as doors and other major components. Those components are then brought to the main plant that builds the actual vehicle, Russo said.

The decision to build the new small car line was based on building a business case to do so. Tax incentives and abatements granted over a year ago contributed to GM's decision to give the product to Lordstown.

A labor contract reached last year with the adjacent GM fabrication plant workers came along with a promise that GM would invest $230 million in that plant if the assembly plant is renovated.

The fabrication plant, which has 2,400 hourly workers, supplies metal parts and the underbody of cars to the assembly plant.

Local and state officials feared that losing the plant would devastate a region that has never recovered from the loss of steel jobs.

UAW Region 2B director Lloyd Mahaffey said in a statement that GM's decision "contributes to economic stability in the Mahoning Valley region and the State of Ohio."

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