The company said that the plant when fully operational, will have the capacity to produce nearly 20,000 commercial-duty hybrid propulsion systems each year using 100 manufacturing workers.

Allison has received $62.8m matching grant from the US Department of Energy (DOE) under the provisions of the American Recovery and Reinvestment Act of 2009, for the renovation and commissioning of the new manufacturing plant.

The dedication of this new manufacturing facility will enable Allison Transmission to bring commercial-duty truck hybrid products to market in 2013.

The company will leverage its experience in the design, manufacture and customer support of both its fully automatic transmissions and its city transit bus hybrid products, to produce these new hybrid propulsion systems.

This new Allison hybrid propulsion system will use the kinetic energy, otherwise wasted when the vehicle decelerates, to propel or reaccelerate the vehicle and to power vehicle accessories. The company claimed that its hybrid products will provide fuel economy in the range of 20 -30%.

Lawrence Dewey, chairman and CEO of Allison Transmission, said: “Over $130m is being invested in the renovation of this facility and the development of our new commercial hybrid truck product. We will deliver a new generation of hybrid propulsion solutions to the transportation industry.”