One of the following problems may occur on an affected BMW model manufactured prior to January 2003:
• The manual shift lever is difficult to move into and out of 5th gear and reverse;
• The manual shift lever does not automatically move from the 5th and reverse gears back to the center/neutral position; or
• There is no manual shift lever guidance, indicating looseness of the shifter.

Affected Models:
• E36 Z3 2.8, 3.0;
• E36 M Coupe, M Roadster S52, S54;
• E36 M3 S50, S52 E39 528i, 530i;
• E46 328i, 330i up to January 2003 production;
• E46 325xi, 330xi up to January 2003 production; and
• E53 3.0i up to January 2003 production.

Cause:
The 5th gear and reverse gear selector shaft pin is sticking due to a defective bushing mounted in the selector shaft bore of the transmission.

Correction:
Replace the 5th and reverse gear selector shaft pin bushing.

All Models Except E36 M3:
In the case of customer complaint, the 5th and reverse gear selector shaft pin bushing must be replaced separately as described in BMW Repair Instruction 23 11 565.

E36 M3 Models:
In the case of customer complaint, the 5th and reverse gear selector shaft pin bushing must be replaced separately as described in the following service procedure.

Special Tools Required:
• 00 1 450
• 23 0 170
• 23 4 021
• 23 4 022
• 23 4 023

Service Procedure:
1. Place the transmission with special tool #23 0 170 on assembly stand #00 1 450.

2. Release the retaining ring.

3. Drive the sealing cap out of the transmission housing with a suitable tool.

Note: The bore must not be damaged. A burr or a dent can cause the sealing cap to leak.

4. Replace the sealing cap.

5. Remove the pressure spring and locking pin.

Note: The pressure spring and locking pin for reverse and 5th gears must not be mixed up. The 5th gear locking pin has a curved slant and weaker pressure spring, while the reverse gear locking pin has a straight slant and stronger pressure spring

6. When installing the reverse gear locking pin, the slant must point downward in the bell housing direction of travel.

7. When installing the 5th gear locking pin, the slant must point upward in the bell housing in the direction of travel.

8. Force open the bearing bushing and withdraw it using a suitable tool.

Note: Force open the bearing bushing only at the specified indent.

9. Drive in the bearing bushing with special tool #23 4 022 (short) for 5th gear, and #23 4 023 (long) for reverse gear.

Note: Make sure you use the correct special tool. Different tools have different dimensions.

10. Drive in the sealing cap with special tool #23 4 021.

11. Fit the retaining ring using special tool #23 4 021.

For additional information, visit www.alldata.com.

Technical service bulletin courtesy of ALLDATA.