June 26 (Bloomberg) -- General Electric Co., the world’s biggest maker of power-generation equipment and jet engines, plans a research center that may add more than 1,100 jobs in Michigan, the state with the highest U.S. unemployment rate.

The Advanced Manufacturing and Software Technology Center will be about 25 miles (40 kilometers) outside Detroit in Van Buren Township, the Fairfield, Connecticut-based company said today in a statement. It will take advantage of a pool of out- of-work engineers and scientists as the auto industry’s U.S. center shrinks and GE develops more energy-efficient products.

GE, also the world’s biggest maker of locomotives and medical-imaging machines, said it will invest about $100 million to build the new site and benefit from more than $60 million in state incentives over 12 years.

“We’ve found the state of Michigan to be aggressive and a good partner,” Chief Executive Officer Jeffrey Immelt said in a news conference with Governor Jennifer Granholm today in Birmingham, Michigan. “We view this as a long-term commitment. We’ve looked at this downturn as a way to launch more investment faster.”

The center, which will create all new, Michigan-based jobs, will “definitely” include renewable energy components like wind turbines, said Immelt, who is on President Barack Obama’s board of economic advisers. GE is the biggest wind-turbine maker in the U.S. Existing space on the site will be used for software and health-care information-technology development, GE said.

‘Strong Exporting Country’

Immelt said the U.S. must be a “strong exporting country” to help speed recovery from the economic slump. A Web site through which engineers can submit job applications should be up and running by next week, he said. The center will open later this year, creating 1,100 to 1,200 jobs, according to GE, and Immelt said it may grow further. The jobs pay about $100,000 a year, Granholm said.

“This country’s future has to be about exports,” Immelt said in a telephone interview with reporters. “We’re a $19 billion exporter in 2008. We don’t do anything unless we can compete on a global basis. Our willingness to invest here in Michigan says we think we can be competitive here so that that export base grows into the future.”

Immelt repeated that within the company’s backlog, equipment orders would be down while orders for service contracts, which are generally more profitable, would be up. The backlog was $171 billion in the first quarter.

Energy Efficiency

GE is tapping government stimulus funds and has announced investments in the past two months to help sell products such as wind turbines, electricity meters and energy-efficient appliances. The company is part of a group that will apply for federal assistance to develop a “smart grid” electricity- transmission system in Miami and is using state incentives to build a sodium-based battery factory near its global research center in Albany, New York.

“This is exactly the kind of thing the president is trying to build for the country,” Edward Montgomery, Obama’s director of recovery for auto communities and workers, said during the press conference.

General Motors Corp. also announced today that it has decided to assemble a future small-car model at its plant in Orion Township, Michigan. The selection will restore about 1,200 jobs at the plant and another 200 at a stamping plant in Pontiac, Michigan, the company said.

Tax Incentives

Michigan was “more creative than it has ever been” in offering a package of tax incentives for GM’s assembly plants to win the projects, Granholm told reporters. GM had said it would select the location this month from among its plants in Orion Township; Spring Hill, Tennessee; and Janesville, Wisconsin.

Michigan’s unemployment rate, about 14 percent in May, is the highest in the U.S., according to figures released by the Bureau of Labor Statistics on June 19.

Auto sales fell to their lowest rates since the early 1980s in the first quarter of this year as the U.S. economy suffered through the biggest slowdown since the Great Depression. More than 20 auto-parts suppliers have been forced into court protection this year as sales dried up, the Original Equipment Suppliers Association trade group says.

The worldwide slump was triggered by a financial crisis that began with the U.S. property market’s collapse in 2007. Banks and other financial institutions have since posted more than $1.47 trillion in writedowns and credit losses, Bloomberg data show.

“The notion of building products here and exporting them there and a CEO that supports that is so fantastic,” Granholm said in the interview, referring to GE’s investment. “Fantastic for our manufacturing center and fantastic for our workers that may have otherwise lost to outsourcing of those jobs.”

GE slipped 11 cents to $11.75 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have tumbled 56 percent in the past year.

To contact the reporters on this story: Rachel Layne in Boston at rlayne@bloomberg.net; Craig Trudell in Southfield, Michigan at ctrudell@bloomberg.net.

Last Updated: June 26, 2009 17:29 EDT