Chrysler Group Continues Powertrain Offensive Investment with Second Phoenix Engine Plant

-- Saltillo, Mexico named as home to second Phoenix V-6 engine plant

-- $570 million plant to begin production of fuel-efficient engines in 2009

-- $3 billion Chrysler Group Powertrain Offensive part of 'Recovery and Transformation Plan'

MEXICO CITY, June 1 -- Frank Ewasyshyn, Chrysler Group Executive Vice President - Manufacturing, was joined by the President of Mexico Felipe Calderon and the Governor of the State of Coahuila Humberto Moreira at Los Pinos, Mexico's official presidential residence for today's announcement of a new Chrysler Group engine plant in Saltillo, Mexico. The plant investment of $570 million (USD) reaffirms the company's commitment to maintain leadership in the production of advanced, fuel-efficient automobile engines.

Scheduled to begin production in 2009, the plant will produce a new family of fuel-efficient V-6 engines, known as "Phoenix" engines. Construction of the new plant will begin in June 2008. The Saltillo Phoenix Engine Plant is part of the Chrysler's Group $3 billion Powertrain Offensive announced in February for the production of more fuel-efficient engines, axles and transmissions. The Chrysler Group's Powertrain Offensive also plays a key role in the Company's Recovery and Transformation Plan and will support 20 new vehicles to be launched during the next three years. The Mexico plant is the second Phoenix Engine Plant recently announced by the automaker. The other plant will be located in Trenton, Michigan next to the current Trenton Engine site.

"Today's celebration commemorates an important milestone for the Chrysler Group because -- through the Recovery and Transformation Plan -- we're investing in the international future of our Company," said Ewasyshyn. "This $570 million investment will have a positive impact on the regional economy. The Chrysler Group has a deep commitment to our Mexican operations with more than 60 years of history here, and we will continue that commitment going forward." President Calderon described his government's role in leading development of Mexico's economy and his goal to see it ranked fifth in the world by 2030, and expressed gratitude for Chrysler's investment in Mexico.

The new Saltillo Phoenix Engine Plant will have an annual manufacturing capacity of 440,000 engines and will be situated in Derramadero, near Chrysler Group's Saltillo Truck Assembly Plant which builds the Dodge Ram.

"The automotive products that we produce in Saltillo are internationally recognized for their high quality due to several factors, the most important being our workforce. We are very proud of the union and the support of our workers, many of whom were born and raised in this area," said Roberto Gutierrez, Chrysler Group Mexico Vice President - Manufacturing.

Once the plant is fully operational, Saltillo Phoenix Engine Plant will have 485 full-time Chrysler Group employees.

State of Coahuila Governor Humberto Moreira said: "I'm pleased to announce that the Saltillo area is one of the most significant automobile regions of the country. Due to the importance and the number of automotive companies that are located in this area, we're recognized as the automobile capital of Mexico, which is a little like Detroit in the U.S. With its plants, the Chrysler Group has a leading role in this area, strongly supporting the industry."

As with the Trenton Phoenix Engine Plant, the Saltillo Phoenix Engine Plant will incorporate Smart manufacturing initiatives, flexible CNC-based machining, volume-bundled parts purchasing, volume-bundled capital investment and standardized tooling.

Over the long term, the Phoenix family of V-6 engines will reduce manufacturing complexity by paring the four current V-6 engine architectures to one.

Headquartered in Auburn Hills, Mich., Chrysler Group has invested over $2 billion in its Mexico manufacturing operations since 2004 and $10.70 billion in its North American operations since 2003.

Other participants at the ceremony were Joseph A. ChamaSrour, President and Managing Director - DaimlerChrysler Mexico as well as Hugo Diaz Covarrubias, Secretary of the Union from DaimlerChrysler Mexico.