General Motors announced it will sell its Allison Transmission unit to investment firms Carlyle Group and Onex Corp for 5.6 billion dollars.

The sale agreement covers substantially all of Allison Transmission, including seven manufacturing facilities in Indianapolis, Ind. and its worldwide distribution network and sales offices. Still General Motors said it will retain a plant in Baltimore, Maryland that produces transmissions for pick-up and sport utility vehicles.

"This is another important step to strengthen our liquidity and provide resources to support our heavy investments in new products and technology," said Rick Wagoner, GM chairman and CEO. "At the same time, this sale will position Allison for growth with strong partners in Carlyle and Onex, which have well-established track records of working effectively with their management teams, unions and employees,"

According to the financial analysts, this move will help General Motors raise funds to pay for thousands of job cuts and plant closings after the firm's 12.4-billion-dollars in losses over the past two years.

The deal is expected to close in the third quarter, after is approved by General Motor's industrial union and regulators.