Its function is to bypass the external cooler so that the transmission can come up to temp. In cold climates, without the bypass, it may keep the fluid too cool and the transmission would not work the way its designed to work.
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huuum
my experience with cold (and i mean damn cold here. it has been getting -45 during winter) even with stock coolers, winterfronts are almost a must have. obviously i dont have a problem with heat during winter. i say get the 40 and if you have a problem put a winterfront on it, and be happier with it when it gets warmer.
Below is part of the ad about the cooler.
"Here's how Low Pressure Drop (LPD) technology works to protect your transmission:
When Automatic Transmission Fluid (ATF) is cold it is viscous. The unique Tru-Cool design allows the colder, thicker ATF to flow more efficiently through two open bypass channels positioned at the top of the cooler.
As operating temperatures increase, the ATF becomes hotter and thinner. It's directed through the core where it is cooled.
Tru-Cool's highly efficient cooling technology combines improved protection against lube system failure with optimal heat transfer. "
That is built in the cooler. Tryed to find a pic. on the web to show you.
Tru Cool allso has an external bypass --one that looks like a " H " you plumb in the lines going to-from the cooler.
Hope this helps
I found the box--took a pic--of the internal bypass.http://www.ls1truck.com/upload/files/182/IMG_2808.JPG
Thanks