Regards the car being sluggish when the Trans Fail caption illuminated. I believe that the ZF trans clutches for 1/2/3 disengaged and the trans is locked in 4th gear When in D. And still has reverse in R.

So this is a design feature of the box when in Fail Safe. I believe it’s because if the GB were to fail at motorway speeds you definitely would not want it to lock into anything lower than 4th!!!

If you have the older GM gearbox this may indicate something else though.

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E53 3.0d Sport 119,000 Miles
E61 535d Estate - Hybrid turbos and Dark-side intercooler...389hp,792nm