General Motors Company
) and its archrival
Ford Motor Co.
) have joined hands in developing nine- and ten-speed automatic
transmissions in order to save development costs and meet fuel
economy standard mandated by the U.S. government. Further, the
collaboration will help both the companies quickly launch the
transmissions into many of their new cars and trucks.
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Transmissions with more gears are more fuel-efficient as they
allow engines to do less work. However, they are much more
complex to develop and require huge investment. As a result, the
collaboration will save millions of dollars of development costs
and the savings will be utilized for improving other aspects of
the vehicles such as interiors and entertainment features making
the companies' products much more competitive.
The collaboration will also help both the companies meet
fuel-economy standard of 54.5 miles per gallon by 2025. A
nine-speed transmission improves gas mileage by 5%-10% over a
This isn't the first time General Motors and Ford started working
together on transmission systems. Earlier in 2002, the companies
have started developing six-speed transmissions, which took
nearly three years to complete. So far, GM and Ford have jointly
produced 8 million transmissions.
A Few days back, General Motors announced plans to invest
$332 million in four plants in three Great Lakes states in order
to develop fuel-efficient engines and transmission systems
The plants are located in Toledo, Ohio; Bedford, Ind.; and Flint
and Bay City in Mich. The investment at the plant will help GM
build a new V-6 engine, a new small motor and new eight-speed
Both General Motors and Ford have been desperately trying to
catch up with its rivals in engines and transmissions
technologies. Its competitors are already producing 10-speed
transmissions when the automakers are lagging behind them
providing only six-speed transmissions in vehicles.
Chrysler Group - controlled by Italy's
) -already has the license to produce the 8HP eight-speed
transmissions system (developed by Germany's ZF Friedrichshafen
AG) at its Kokomo Transmission Plant and the Kokomo Casting
plant, starting this year. This transmission system is used in
many vehicles produced by Germany's
Currently, both General Motors and Ford retain a Zacks Rank #3