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Austempered ductile iron (ADI) is a material having excellent mechanical properties and damping capacity. However practical mass production of ADI gears has not been possible due to ADI's poor machinability and distortion during the austempering heat treatment. With a new process method of carrying out hobbing before austempering when the material is in its soft condition, then austempering it and lastly, conducting the shave finishing process, we have diminished the above defects and developed practical ADI gears. These new gears generate less noise than ordinary nitrocarburized steel gears and are superior in pitting resistance.