The marriage of Allison Transmissions and General Motors (NYSE:GM) occurred at the start of the Great Depression. It's lasted through wars and technological innovation. But it couldn't survive GM's focus on smaller, lighter cars and trucks, as well as the need to raise cash. Lots of it.

GM has agreed to sell its division to two private equity firms for $5.6 billion. The deal, which works out to about 10 times Allison's projected $550 million 2007 EBITDA, will give GM a large dose of liquidity and flexibility in dealing with its labor negotiations.

Allison makes big honkin' powertrains that drive buses, trucks, heavy equipment, and even tanks. So great is Allison's reach that it owns 80% of the market for all medium and heavy-duty automatic transmissions sold worldwide, most of that figure within North America. Off the continent, Allison commands only a 10% market share, though it does supply transmissions to every major vehicle manufacturer in Europe.

While the soon-to-be-former GM division posts more than $2 billion in annual sales, some 90% of its business is actually directed toward external customers. GM will keep one Allison plant for itself to provide the transmissions for its pickup trucks and SUVs.

Like Ford (NYSE:F), which is thinking about selling off some of its prestige brands to raise cash, GM has been selling off parts of itself. Under heavy pressure to remain competitive with Toyota Motors (NYSE:TM), GM has already shed stakes in Suzuki Motors and Fuji Heavy Industries, and last year it got rid of its GMAC credit-financing arm.

There was a frenzy of bidding for the transmission maker among private equity and public companies alike, including Blackstone (NYSE:BX), Greenbrier Equity, and Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B). The ultimate victor was a tag-team duo of Carlyle Group and Canada's Onex, a conglomerate that most recently bought Raytheon Aircraft from Raytheon (NYSE:RTN) this past January.

James Allison, the founder of Allison Transmissions, was a driving force behind the creation of the Indianapolis 500, as a means of proving his company's auto parts. The sale by GM now becomes yet another lap in Allison's storied race.

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Fool contributor Rich Duprey owns shares of Ford and Goodyear, but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. Take The Motley Fool's disclosure policy for a spin and let it prove to you its street-worthiness.