For most people an overdrive unit is a black box, meaning you know what goes in and comes out but you don't necessarily know what goes on inside. If it quits working it is helpful to know something about how the overdrive unit works.

For the MGs the overdrive unit is attached to the rear end of the gearbox. The main gearbox works in entirely normal manner, same as a gearbox without overdrive. The overdrive unit contains a planetary gear set that will increase speed of the output shaft when engaged. There is also a cone clutch that has two states of operation. In the at-rest condition the cone clutch connects the input and output shafts to work as direct drive. There is also a one-way clutch. This device looks a lot like a ball bearing, except the balls are not round. This allows it to do mechanical drive in one direction of rotation and to freewheel in the other direction. The cone clutch is held in an at-rest state of engagement by internal springs. During at-rest operation mechanical drive goes directly from the input shaft to the output shaft as direct drive, while all parts of the cone clutch and planet gear assembly will be rotating along with the shafts.

The cone clutch is actuated by hydraulic pressure supplied by an internal hydraulic pump and pressure relief valve. Oil pressure pushes the cone clutch axially against force of the springs to bring part of the rotating assembly into contact with a brake ring in the stationary housing. This stops rotation of the sun gear while the input shaft is driving the planet gears which engage the sun gear. As the planet gears rotate and orbit around the sun gear, they are driving an outer ring gear that drives the output shaft at higher speed. While operating in forward direction in overdrive mode, the one-way clutch is free wheeling in the forward direction.

If the car was to run in reverse when the overdrive unit is engaged, the one-way clutch will not allow reverse rotation. This then looks like being engaged in two gears at once, which will lock up the gearbox. Being forced to turn in reverse with overdrive engaged might slip the cone clutch or might break some of the mechanical drive parts. It is therefore necessary to have a mechanism to prevent engagement of the OD unit when driving in reverse. That is done with an external electrical switch on the hand shift lever.

Purpose of the one-way clutch is to share the driving load with the cone clutch going in the forward direction in direct drive (overdrive not engaged). If the one-way clutch was omitted. All forward driving force would have to be held by the cone clutch, in which case the cone clutch would need to be substantially larger.

Both sides of the cone clutch would see more torque in lower gears, one side in direct drive and the other side in overdrive. If the overdrive unit was allowed to work in lower gears the cone clutch would need to be substantially larger. The prudent solution here is to use an interlock switch on the hand shift lever to inhibit use of overdrive in the lower gears. For some models overdrive will work only in 3rd and 4th gears. For other models overdrive will work only in 4th gear.

Oil pressure and flow that actuates the cone clutch is controlled by an electric solenoid valve which presses a little steel ball against an internal oil control port. The solenoid had two wires for power and ground, and it is not polarity sensitive. Electrical power for the solenoid starts at the ignition switch, goes through the manual control switch, then to the solenoid then to the hand shift lever switch where it returns to ground. Some models also have a throttle or vacuum controlled switch. All of these stitches must be closed (connected) for the overdrive unit to engage.