Chrysler Group Applies Flexibility and Reduces Capital Expense In Preparation for the Launch of the All-New 2004 Dodge Durango

* Proves that a brownfield site can be transformed into a flexible operation * Flexible Common Systems Architecture dramatically affects stamping operations * Newark Assembly reduces emissions by 25 percent, adopts zero-waste landfill process

TRAVERSE CITY, Mich., Aug. 4 -- The Chrysler Group will reduce initial capital expenditures by 30 percent in preparation for the launch of the all-new 2004 Dodge Durango due to flexible manufacturing strategies and re-use of existing tooling, the unit's head of assembly, stamping and component operations said during the 2003 Management Briefing Seminars in Traverse City, Michigan, today.

Craig Corrington, Chrysler Group Vice President - Assembly, Stamping and Component Operations, discussed pre-launch activities at Newark Assembly as an example of the company's flexible manufacturing strategy.

"The conversion of Newark Assembly Plant for the all-new Dodge Durango is indicative of the company's new direction for manufacturing," said Corrington. "By applying flexible manufacturing principles in an existing facility with tooling from current Durango production, we are able to reduce our initial capital expenditures by 30 percent."

According to Corrington, efforts at the Newark Assembly Plant demonstrate the Chrysler Group's ongoing changes to further improve productivity and flexibility in its manufacturing operations. The facility recently underwent a conversion to re-tool existing equipment and processes, enabling both the current and new Durango to be built simultaneously on the same production lines.

Corrington also discussed environmental practices at the Newark facility. Recently the plant was awarded the Clean Air Excellence Award from the Environmental Protection Agency for utilizing a clear coat process developed by DuPont. While improving scratch and mar resistance on vehicles, the new paint reduces clear coat emissions by 25 percent. In addition, Newark Assembly has adopted a zero-waste landfill process, whereby waste is either recycled or sent to an incinerator, where it is converted into electricity.

"We are proving through our upcoming launch of the all-new Dodge Durango that a brownfield site can be transformed into a flexible operation," Corrington said. "For our facilities, this belief goes beyond just assembly operations. It is being applied in our stamping plants and will continue to be rolled out, where appropriate, with each new vehicle we launch."

As an example, unconventional applications of flexibility have helped Chrysler Group's Twinsburg Stamping facility, located in Twinsburg, Ohio, prepare for the upcoming launch of the Dodge Durango. The plant will be responsible for the production of major body components on the vehicle.

The Twinsburg facility is implementing a flexible system called Common Systems Architecture (CSA) -- a new model for the company's stamping and body panel assembly operations. CSA significantly reduces the limitations of tooling changes that may be required over the manufacturing life of a vehicle. Under this concept, robotics and other equipment can be reprogrammed for model year changes, thereby eliminating or reducing production downtime.

CSA also provides a higher degree of precision in component production, ensuring that parts are produced according to specification the first time and at the quality levels that customers expect.

Corrington said that the benefits of a flexible system at Twinsburg Stamping and Newark Assembly will be reaped in a number of ways, including: cost savings due to future reduction in capital spending as well as lower scrap rates; the conservation of valuable manufacturing space during changeover; and the professional development of the plant workforce as a result of training on state-of-the-art equipment and robotic technology.

At this time, CSA is only being utilized for production of Durango; however, Corrington said the applications will be far reaching. "We plan to apply this best-practice experience in flexibility across our manufacturing organization."

Production for the all-new 2004 Dodge Durango is expected to begin later this year.