A research alliance consisting of GM, BMW and DaimlerChrysler plans to invest more than $1 billion to develop a new hybrid transmission to compete with a related system offered by Toyota. For the past 18 months, approximately 500 engineers at the three companies have been jointly developing the next-generation hybrid engine technology, which combines a battery-powered electric motor with a conventional gasoline combustion engine. The dual-mode hybrid technology includes an on-board fuel optimization computer that determines when and at what speeds the two motors will be used for power and how the on-board battery will be recharged. Development of the transmission is expected to cost about $300 million. The rest of the investment will be devoted to integrating the new hybrid system with other vehicle components. The hybrid engine will be available in two rear-wheel-drive configurations and a front-wheel-drive system.