DCX and GM to build two-mode hybrid system

''The two-modesystem innovations provide performance and fuel economy improvements at highwayspeeds and better trailer towing ability,'' Stephens said. ''Packaging is moreefficient than today's single mode designs as the system's compact and powerfulelectric motors are designed to fit within the approximate space of aconventional automatic transmission.''

Stephensdescribed the two-mode design as ''the optimal merging of full hybrid andstate-of-the-art automatic transmission technologies. Together we will jointlydevelop what is essentially an electrically variable transmission with twohybrid drive modes.''

This system willreduce fuel consumption at highway speeds much more effectively than availablesingle mode systems, Stephens said, and achieve at least a 25 percentimprovement in composite fuel economy in full-size truck applications.

''In the nearterm,'' Stephens added, ''GM will also continue to expand its offerings ofsix-speed transmissions and engines equipped with advanced technologies such asvariable valve timing and Displacement on Demand.''

The two firms havesigned a non-binding ''memorandum of understanding,'' but intend to enter intoa definitive agreement in early 2005.