One of the most dramatic modifications you can make to your Mustang is the installation of a new, high-tech, overdrive transmission. For this swap, we followed along as Tom and Roy Honsaker from Paul's Automotive Engineering in Cincinnati showed us the right way to install a five-speed gearbox.
With the introduction of the '05 Mustang, Ford Motor Company has tipped its hat to the retro styling that drives our segment of the hot rod world. It seems like overnight the restification of classic Mustangs has become the it thing to do. Aftermarket companies are joining in the fun of modifying classic Mustangs utilizing the timeless, iconic good looks of the '60s Mustangs to showcase all sorts of new technologies.
After the efficiency of fuel injection and those funky overhead-cam modular V-8 engines, the next system everyone wants to upgrade is the transmission. The advances in transmission technology are just as impressive as many of the engine combinations available today. Lighter yet stronger materials lead the billing, but the option to have one and in some cases two overdrive gears (a gear ratio numerically lower than 1:1) has pushed these transmissions to the top of the aftermarket industry.
It's impossible to overemphasize the advantages of an overdrive gear. Allowing the engine to operate at a lower-rpm range while pushing the car at highway speeds does several things. First, by dropping the engine rpm at, say, 65 mph, you dramatically increase the fuel efficiency of the car. Less rpm equals less fuel consumption. Second, you drop a lot of highway noise. Yes, it was cool at one time to own the loudest car on the block, but isn't it cooler to sneak up on your prey? In addition, a more comfortable ride allows you to enjoy the car more, and your passengers will appreciate the drop in noise as well. Third, with the extra gearing, transmission manufacturers have built modern gearboxes with a wider range of gears. This usually translates into a low First and Second gear that can dramatically increase the acceleration of the car if the necessary traction is available. Go faster and get better gas mileage? It's true! Last, but probably most important, by decreasing the rpm that the engine has to turn to reach the same final drive speed, you in essence decrease the wear on all parts in the engine. The fewer times you turn that engine over, the less wear and tear on the rotating assembly, valvetrain, and accessories. When you add all of those benefits together, you can see why modern overdrive transmissions have become so popular.
OK, so you now know that you want a five-speed or six-speed manual transmission in your classic Mustang to take advantage of everything we just described. How do you go about choosing the right transmission, and how do you get it into your Mustang?
The new transmissions are much lighter than the older ones. Our Top Loader four-speed tipped the scales at 97 pounds, while the high-tech G-Force five-speed weighed only 73 pounds, making for a 24-pound reduction in overall weight, a lot of which is rotating mass.
To investigate the latest in modern transmission design and the applications in first-generation Mustangs, we visited Paul Faessler's Paul's Automotive Engineering (PAE), a supercenter for Mustang modification and reengineering, and the shop that brought you The Blender, a '66 coupe with all the modern conveniences, including an overdrive transmission (Sept. '05 ssue).
Paul concurs with our assessment of the advantages of these new transmissions: "As an owner of several early Mustangs, the biggest advantage I see is how much quieter the cars are when you are rolling down the highway. The difference in noise level from 3,200 rpm in Fourth gear to 2,000 rpm in Fifth gear is dramatic. New Mustangs (which we drive daily) are more rigid and better insulated than our old Mustangs, and the drop in rpm at highway speeds really makes these older cars more enjoyable to drive. The second thing I like is the more precise shifting, especially with an aftermarket short-throw shifter. Third, the higher-ratio First gear really helps get the car rolling from a stop. You are looking at a 2.94-3.25:1 ratio compared to a 2.78:1 wide-ratio Top Loader or a 2.32:1 close-ratio Top Loader. This reduces clutch slippage and increases clutch life. You also get a 25-30-pound weight savings and increased fuel mileage.
"At Paul's Automotive Engineering, our typical application for these transmissions are cars that are driven. Subtle performance improvements (which do not detract from originality) are very popular, and owners want their classic Mustangs to perform as well as the new cars."
Here's what the guts of a modern five-speed look like. All of the G-Force internals are heavy-duty pieces that will hold up to good power as well as give the car the benefit of an overdrive gear. The case and everything inside is a beefed-up Borg-Warner (now Tremec) T5, the same transmission that first appeared in the Mustang in 1985. | 
Because you are mixing and matching engines and transmissions, you will likely have to employ some sort of a bellhousing-adapter plate. | 
This piece keeps the transmission and engine lined up, an important aspect of this high-tech swap. |
If you are going to do any sort of drag racing, this is the perfect time to install an SFI-approved, blow-proof bellhousing (not shown). If the flywheel lets go at 7,000 rpm, it's the only thing keeping your feet attached. | 
If you are making some serious power (over 400 rwhp), step up to one of these: a Tremec. These are well-known on the serious 5.0 Mustang circuit but are just now becoming more popular with the resto crowd. Beefed-up, OEM-quality, and well-tested, the Tremec 3550, TKO series, and six-speed T56 are outstanding choices for your classic-Mustang hot rod. | 
Once you pick out the right transmission for your application, there are several other pieces to consider for upgrade, and a modern clutch is one of the most important. Here is the old three-finger clutch (left) and a modern Centerforce diaphragm unit. The Centerforce, with its multiple points of contact, offers superior clamping force with less pedal effort, making driving easier. |