Washington, Feb 24 (DPA) Bad times for General Motors started to wane Tuesday when the company announced it would add 1,200 jobs at an Ohio plant manufacturing the new Chevrolet compact, the Cruze.

The Cruze, set to debut in 2011, will be made at the Lordstown, Ohio, factory, after a $500-million investment in the Cruze programme that included $350 million spent on re-tooling the Ohio facility, the company said in a statement.

All told, the company plans to fill most of the 5,500 jobs created by its $1.4-billion retooling of 18 US factories with laid-off workers, the automakers manufacturing and labor chief said.

The US and Canadian governments hold a majority stake in the largest US automaker, after it emerged from bankruptcy with government aid in July.

The Lordstown factory is at the forefront of GM's retooling to expand its smaller car sales.

The new jobs are part of a third shift added in Lordstown as GM anticipated strong demand for the Cruze, which is expected to get 17 km/litre in highway driving, GM executive Diana Tremblay told Bloomberg financial news service.

The trend represents a turnaround for GM, which for long, debilitating years set its cap on large gas-guzzlers like SUVs.

Worldwide, about 200,000 people work for GM, only one-third of them in the US. At its height 20 years ago, GM employed half a million people in the US alone.

In recent years, GM tried to keep head above water by laying off tens of thousands of workers.