Abstract: An engine control system and method incorporates an FSG to reduce engine speed variation for a displacement on demand engine. The control system transitions between a normal operating mode wherein all cylinders of the engine are operating and a cylinder deactivation mode wherein cylinders of the engine are deactivated. The FSG adjusts torque output to said crankshaft to reduce engine speed variation in response to an unrequested change in engine speed. This allows expanded use of cylinder deactivation. Cylinder deactivation allows reduced fuel consumption when the engine and the FSG are used in generator mode.