General Motors and Ford will invest $US720 million at three US plants to produce a jointly developed, fuel-efficient automatic transmission, the companies said on Monday.
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Reuters said the rare collaboration between the rival Detroit carmakers to develop the six-speed transmission, to be used in front-wheel drive and all-wheel drive vehicles beginning in 2006, was first announced in October 2002.
“Ford and GM have spent nearly a century trying to outdo each other. On this technology, it made sense to work together,” Dave Szczupak, vice president of Ford powertrain operations, reportedly told a news conference.
The report noted that Detroit carmakers have lagged behind foreign competitors in some gearbox technologies in recent years – Ford and GM have relied heavily on four-speed automatic transmissions, while Toyota, Honda and Nissan have offered more vehicles with five-speed automatics.
Reuters said the new transmission, to be used in cars and sport utility vehicles, is expected to offer a 4% improvement in fuel economy over traditional four-speed automatics.
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By GlobalDataOfficials reportedly said the transmission will help GM and Ford meet new, more stringent fuel-economy regulations for trucks and SUVs – their comments came as retail petrol prices have continued to hover at or near record highs across the United States.
To manufacture the transmission, GM is investing $350 million at its Warren, Michigan, plant and Ford is investing $370 million at plants in Sterling Heights, Michigan, and near Cincinnati, Ohio, the companies said, according to Reuters.
Szczupak reportedly said the investments include new equipment, tooling and facilities upgrades and, including engineering, research and development costs, investment in the new six-speed transmission totals more than $1 billion.
Ford and GM’s collaborative effort saves millions of dollars and months of development time, Tom Stephens, group vice president of GM powertrain, told Reuters.
Six-speed transmissions are in less than 1% of vehicles currently, Szczupak reportedly said, but they will grow in popularity as consumers seek better fuel economy and more low-end torque, accounting for a projected 15% to 20% of sales in 2010, and more than 50% by 2015.
According to Reuters, Stephens and Szczupak said Ford and GM have worked well together on the new transmission, and neither ruled out more collaboration in the future. GM and Ford contacted U.S. officials about anti-trust concerns before agreeing to the joint development and were told there were no problems with the venture, officials reportedly said.
“This sets the table for future activity,” between the two automakers, David Cole, director of the Center for Automotive Research and a long-time industry observer, told Reuters.
