Nine years ago, New Venture Gear was an idea launched in desperation, a last-ditch effort to turn around General Motors Corp.'s transmission plant in Muncie, IN, and then-Chrysler Corp.'s transfer case plant in East Syracuse, NY.

Both facilities had tenuous futures. The Chrysler plant was barely breaking even, and the GM plant was losing money. A driving force of the partnership was the ability to share in investment for a redesigned product lineup.

The investment apparently has paid off. With $1.8 billion in sales, New Venture Gear has made money the past four years, although the private venture will not say how much. Now the strategy calls for expansion.

The company's East Syracuse plant is supplying transfer cases for BMW AG's new X5 sport/activity vehicle. Rising demand for transfer cases for trucks from Ford Motor Co., GM and DaimlerChrysler is driving an addition of 100,000 sq.ft. (9,300 sq. m) of capacity at East Syracuse, creating 300 new jobs.

In two years, NVG will supply the all-wheel-drive system for Saturn Corp.'s sport/utility vehicle to be built in Spring Hill, TN. NVG will supply the power takeoff system, similar to a transfer case, while its partner, Visteon Automotive Systems, will supply axles and driveshafts.

In early 2000, NVG will open a plant in Roitzsch in former East Germany to produce 4WD transfer cases and RWD manual transmissions. The initial product is transfer cases for BMW's Land Rover SUVs. NVG displaces Borg-Warner Automotive as Rover's primary supplier of transfer cases. Soon after, Roitzsch will supply two-speed transfer cases to Volkswagen AG for its forthcoming SUV.

In spring 1998, GM and Chrysler were contemplating selling or spinning off NVG, but those discussions have been shelved since the merger with Daimler-Benz. DaimlerChrysler owns 64% of NVG and GM owns 36%.

The company is considering moving into the axle market to increase its systems capability. Automakers are inviting NVG to bid on axle business, which would be a completely new product line.