GM has announced it will invest up to US$118 million to upgrade its GM Powertrain Baltimore Transmission facility in White Marsh, Maryland/USA for building its new, rear-wheel drive two-mode hybrid vehicle transmission.

The two-mode transmission, which will go into production in 2007 is the first light-duty integrated hybrid transmission to be designed and built in the US. It will be used initially in GM's full-size SUVs, the Chevrolet Tahoe and GMC Yukon. The hybrid-powered vehicles will be assembled at GM's Arlington, Texas plant.

The only other US designed and built hybrid transmission from a major auto manufacturer is also produced by GM. A heavy-duty two-mode transmission for urban transit buses began production in 2003. GM has provided 388 hybrid propulsion systems, designed and built in Indianapolis, Indiana, for transit systems in 29 cities in North America and Yosemite National Park. GM begins 2006 with orders for an additional 216 hybrid bus systems.

"Our two-mode hybrid transmission is a leap forward in hybrid technology and a key part of GM's unique strategy to offer several different hybrid systems in a range of popular vehicles," said GM chairman and CEO Rick Wagoner in a statement.

"Our multi-pronged hybrid programme is in addition to our many other efforts to minimize the impact of our cars and trucks on the environment, including the 1.5m GM vehicles already capable of using ethanol/gasoline blended E85 fuel, and our cutting edge advances in hydrogen fuel-cell technology."

GM, the BMW Group and DaimlerChrysler are co-developing the light-duty two-mode technology, modelled on GM's multi-patented hybrid-electric diesel technology in urban transit buses.

Two-mode hybrid technology uses a variable transmission with two electric motors and two hybrid modes of operation. The addition of a second mode to the drive system improves efficiency and reduces the need for exceedingly large electric motors. The second mode is used mostly when the vehicle is at higher speeds, such as on the highway, so fuel economy will be optimised in both city and highway driving.