(FORTUNE Magazine) – Besieged by demands for better fuel economy, more power, and less pollution, motor engineers around the world are pursuing a radical "camless" design that promises to deliver the internal-combustion engine's biggest efficiency improvement in years. Camless diesel truck engines could be the first to hit the road if a development program at Navistar International pays off, but the technology could just as well make its debut in gasoline engines. For the automobile driver, the camless engine might offer many of the advantages of hybrid gasoline-electric drive trains recently introduced by Toyota and Honda, but at less cost.

Siemens Automotive, the big German components supplier, has been working on no-cam engines for several years. So have two consulting-engineering companies, FEV Motorentechnik in Aachen, Germany, and Aura Systems, in El Segundo, Calif. Engineer Wieland Bruch at BMW's Munich headquarters says his company is collaborating with Siemens on a camless gasoline car-engine design tied in with a souped-up electrical system. Engines of this type, the company claims, have achieved fuel savings of 10% compared with conventional ones, along with reduced emissions and greater oomph.

Other automakers are also convinced that the new technology is too good to ignore. "The camless engine is very intriguing to us," says Vance Zanardelli, manager of the transmission and engine-systems department at Ford's research laboratory in Dearborn, Mich. "We've had one running in a test cell in our lab for more than a year, and we think the camless design can provide a fuel-economy improvement of 10% to 15%, along with some other important benefits." Floyd Allen, vice president of power-train product engineering at DaimlerChrysler in Auburn Hills, Mich., says his company has been working on camless engines for several years in the U.S. and Germany. Allen foresees camless engines in production cars "perhaps in about five years."

The aim of all this effort is liberation from a constraint that has handcuffed performance since the birth of the internal-combustion engine more than a century ago. The engines powering today's vehicles, whether they burn gasoline or diesel fuel, rely on a system of valves to admit fuel and air to the cylinders and to let exhaust gases escape after combustion. Rotating steel camshafts with precision-machined egg-shaped lobes, or cams, are the hard-tooled "brains" of the system. They push open the valves at the proper time and guide their closure, typically through an arrangement of pushrods, rocker arms, and other hardware. Stiff springs return the valves to their closed position.

Such valve trains, as they are known, are complicated but reliable. Yet they have the major disadvantage of inflexibility. Like a very simple software program that contains only one set of instructions, the cams always open and close the valves at the same precise moment in each cylinder's constantly repeated cycle of fuel-air intake, compression, combustion, and exhaust. They do so regardless of whether the engine is idling or spinning at maximum rpm. As a result, engine designers can achieve optimum performance at only one speed. An engine designed for impressive high-rpm power may be a wimp at low rpm, and vice versa.

Some automakers have tried to get around that limitation with mechanisms that "phase," or shift, the rotational position of the camshafts as rpm varies. Honda uses another system called VTEC. At faster engine speeds, it hydraulically brings extra sets of cam lobes and rockers into play to help the motor breathe more deeply and make more power. Clever as they are, these schemes are limited by their reliance on hard-metal parts of fixed geometry, and thus can only approximate the benefits of a dream long held by mechanical engineers: infinite variation of the timing, lift, and duration of valve openings to get the best performance across the whole rpm range.

The camless engine would be the latest in a series of changes that have made internal-combustion engines increasingly clean, efficient, and responsive to the driver's right foot. The first of these advances was the introduction in the 1970s of exhaust-scrubbing catalytic converters for gasoline engines. Next came sophisticated electronic ignition systems that continually vary the timing of the gasoline engine's spark for best combustion efficiency, and electronic fuel-injection systems that automatically adjust themselves in response to signals from oxygen-sniffing sensors monitoring the exhaust stream. All this progress left untouched a big piece of mechanical rigidity crying out for improvement--those precision-ground steel cams that orchestrate the engine's inhalations and exhalations.

Engine valve trains come in two flavors, the pushrod type and the type that uses an overhead camshaft. Pushrod engines have a camshaft located in the engine block that's driven by the crankshaft through gears or a chain. The lobes on the rotating camshaft push hard-metal lifters, which in turn move vertical, pencil-like pushrods. The pushrods move rocker arms, which are like little seesaws. As a pushrod pushes up on one end of a rocker, the other end pushes down to open a valve in the cylinder head.

In an overhead-camshaft engine, a chain or belt driven by the crankshaft turns one or two camshafts located atop the cylinder head. A single overhead camshaft (SOHC) design uses one camshaft to move rockers that open both inlet and exhaust valves. The sportier double overhead camshaft (DOHC), or twin-cam, setup does away with the rockers and devotes one camshaft to the inlet valves and the other to the exhaust valves. The relatively modest weight of the reciprocating valve-train parts in a DOHC engine lets it safely spin fast and make big horsepower, earning it a hot-rod reputation.

Having made engines of both types hum like sewing machines, the gearheads who design them would love to do away with all this marvelous but inflexible valve-actuation hardware. Falling into place now are the nuggets of technology needed to make it happen. The first is the affordable microprocessor, which can juggle scads of instructions for what the engine ought to be doing from instant to instant. Another key piece, developed in electric-car research programs, is solid-state circuitry that can manage the flow of current to valve actuators. And finally there are the actuators themselves, devices compact and powerful enough to translate the chip's decisions into valve motion.

Development labs are exploring two competing concepts for a camless engine. One moves the valves hydraulically, and the other uses electrical actuators. Navistar's engineers have chosen the hydraulic approach because their company already uses fluid power in its fuel-injection system. In a partnership with Siemens, Navistar, which makes diesel engines as well as International trucks, is producing a new-generation fuel-injection system for its medium-duty engines that incorporates a fast-acting "digital valve" originally developed by the founder of Sturman Industries of Woodland Park, Colo., for use in spacecraft.

"We are leveraging our joint venture with Sturman to take it from the fuel-injection application and extend it to the control of the valves the engine uses to breathe," says Dan Ustian, president of Navistar's engine and foundry group in Melrose Park, Ill. He is coy about when camless engines might go into production, saying only "in the relatively near future."

Unlike the inlet valves in gasoline engines, which admit a mixture of fuel and air, those in some diesel engines like Navistar's admit only air. After the inlet valve has closed, a high-pressure injector squirts fuel into the cylinder. A better-known difference between the two types of engines is the way they ignite the fuel. A diesel engine has no spark plugs; the energy to combust the fuel comes from heating that occurs when the upward-moving piston squeezes the fuel and air in the cylinder to a compression ratio of about 16 to one. Gasoline engines, with a lower compression ratio of about nine to one, rely on a spark to light the fire.

Those differences aside, both types of engine need to inhale and exhale through valves. If the traditional system is discarded, a chip gets the job of controlling its camless counterpart. Navistar's prototype camless system is managed by just such a chip. "Along with the knobs we can turn today to optimize fuel injection, we are giving our engineers more knobs that optimize the flow of air though the cylinders," exults Dennis Jadin, manager of advanced engine concepts.

A big advantage Jadin foresees is more torque, the low-end grunt that pushes you back into the seat when you nail the accelerator. Says Jadin: "We are going to have double-digit increases in torque at low rpm." To accomplish all that, the chip will continuously sample signals from an array of engine sensors and consult "look-up tables" containing the best valve-management and fuel-injection instructions for the conditions of the moment.

One of Navistar's main motivations for pursuing the camless engine, Jadin notes, is that it could turn out to be cheaper to manufacture. In addition to being simpler, the new valve system could include a built-in braking mode that would replace bolt-on compression brakes now used to slow big trucks on long downhills without burning up the friction brakes in the wheels.

A lot is riding on the truckmaker's efforts. "Navistar is the lowest-cost producer of medium diesel engines in North America," observes John Stark, publisher of Stark's Component Ledger, a newsletter that tracks the diesel-engine business. "If the company can get to a camless engine cost-effectively, it could have a dramatic effect on the way diesel and gasoline engines are designed."

Designers of gasoline engines are taking a different tack. They are using a combination of coil springs and electric solenoids to shuttle valves open and closed. The springs provide most of the opening and closing force. Solenoids, which have existed for years, are magnetic coils wrapped around a rod that moves longitudinally when current is applied. Located at either end of the actuator assemblies, the solenoids set the valves in motion and hold them in place at the limits of their travel.

The system BMW and Siemens are exploring, as well as competing systems, requires a 42-volt electrical system to deliver enough juice to the actuators while keeping their size compact. Most car companies want to switch from today's 12-volt electrical systems to a new 42-volt standard anyway, in order to supply power efficiently for the growing array of electronic stuff being built into vehicles.

Ford's Zanardelli sees a handsome list of potential benefits beyond the camless engine's fuel savings. The better breathing that a camless valve train promotes at low engine speeds can yield 10% to 15% more torque, he says. That could pep up performance or give engineers the alternative of reducing engine size and weight. There's more. Ford believes camless engines can slash nitrogen oxide, or NOX, pollution by about 40% by trapping some of the exhaust gases in the cylinders before they can escape.

The most intriguing prospect Zanardelli offers is momentarily shutting off individual engine cylinders by stopping their fuel supply and cracking open their valves to spoil the compression. "We call this the variable-displacement concept," he says. "It's a way to save fuel when an engine is running under a light load. The electronics are so fast that we should be able to selectively shut off cylinders in a way that will be imperceptible to the driver."

Before a new generation of no-cam engines can get into mass production, everyone in the field agrees, engineers need to whittle away at the energy consumption of today's prototype camless valve-train components. Ford says that continued development should bring the camless valve train's energy requirement into line with that of the camshaft system it replaces. Another item on the agenda is eliminating the clatter and premature wear caused by electrically actuated valves, which tend to slam shut very briskly. Engineers think they can lick the "soft landing" challenge, as it's known. Using position sensors to detect when the valves are almost closed, the control chip would briefly reverse the current to the solenoid to ease the valve's touchdown.

With prices higher at the gas station, work on the camless engine may move ahead much faster than it would have only yesterday, when fuel was cheaper than club soda. To the blessings already described can be added yet another. No-cam motors may be a cheaper answer to fuel conservation and pollution control than hybrid piston-electric drive trains like those powering the new Toyota Prius and the Honda Insight.

The trick, after all, is to transform hydrocarbons into motion with the least waste. Hybrids have a piston engine that runs at a fairly constant speed at which its camshaft provides the greatest efficiency. The engine spins a generator that charges an outsized battery, which supplies extra power through electric motors when the driver is accelerating or climbing a hill. For a car of equivalent size, engine experts say, a hybrid can cut fuel consumption about 30%--more than the camless engine. The catch is the added cost of a dual-power system, which most motorists may balk at paying. With a camless engine, designers could toss out all the electrical stuff and just send the power straight to the asphalt. What's not to like about that?

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