A method of manufacturing a transmission case housing is provided wherein a minimum quantity of lubrication as a compressed air/oil mist is supplied as the housing is rough bored and face milled. The transmission case defines a plurality of transmission fluid drainage holes for draining transmission fluid from the transmission when installed in a vehicle. The housing is positioned with the fluid drainage holes below a central axis of the housing and a plurality of internal bores and faces are bored and face milled on the housing. The compressed air/oil mist is sprayed from the cutting head to cool and lubricate the boring and face milling tools. Machining chips are blown off the rough bored housing through the fluid drainage holes.