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General Motors Wednesday announced plans to invest 15 billion baht - $445 million - to build a new plant to manufacture clean, green turbo-diesel engines in Thailand.

“This plant will enable us to deliver to our customers the cleanest, most efficient diesel engine technology available,” said Steve Carlisle, president for General Motors Southeast Asia Operations and Chevrolet Sales (Thailand). “This is crucial in these days of rising fuel prices.”

The Thai investment extends Chief Executive Officer Rick Wagoner’s strategy of expanding in the Asia-Pacific region, where sales grew about 10 per cent in the first half in contrast to slumping demand in the US. GM is in danger of being overtaken as the world’s top auto maker by Toyota as it closes US plants.

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Oil prices fell yesterday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of the Bear Stearns Cos. Inc. was a sign of deep economic trouble.

Crude’s drop came even as diesel prices rose to a new record above $4 a gallon, and gasoline prices remained high.

Diesel, used to transport the vast majority of the nation’s goods, rose 1.3 cents to a national average of $4.002 a gallon, according to AAA and the Oil Price Information Service. The national average price of a gallon of gasoline, meanwhile, dipped slightly to $3.283 a gallon, but remained 73 cents higher than a year ago.

In the five-county Philadelphia area, yesterday’s average pump price was $3.22 a gallon, up four cents in the last week. In South Jersey, the average was $3.04, six cents higher than a week ago.

Oil’s steep decline - falling $4.53 to settle at $105.68 a barrel on the New York Mercantile Exchange - came hours after futures had reached a new trading high of $111.80 on the Federal Reserve’s move Sunday to lower a key interest rate a quarter of a percentage point.

In the last several months, Fed rate cuts have prompted rallies in oil prices because crude futures offer a hedge against a falling dollar. Interest-rate cuts tend to weaken the dollar further.

But the big decline yesterday could be a sign that the oil market’s momentum has turned negative, analysts said.

“People are saying, well, things are a lot worse than we thought,” said Phil Flynn, an analyst at Alaron Trading Corp., of Chicago.

Source: Associated Press