Chrysler Group Celebrates the Grand Opening Of its Indiana Transmission Plant II

- Over $455 million invested in Kokomo to build transmission for Chrysler 300 Series, Dodge Magnum - World-class benchmarking, UAW partnership drive operational processes at new plant - LaSorda: Despite project changes, plant launches ahead of schedule, under budget

AUBURN HILLS, Mich., Dec. 19 -- Chrysler Group celebrated today the grand opening of its Indiana Transmission Plant II (ITP II), located in Kokomo, Indiana, and the production launch of the new rear- wheel drive, five-speed automatic transmission, which will be used in the all- new 2005 Chrysler 300 Series and Dodge Magnum.

More than 240 employees joined Tom LaSorda, Executive Vice President of Manufacturing; Eric Ridenour, Executive Vice President of Product Development; as well as U.S. Representative Chris Chocola; Lt. Governor Kathy Davis, State of Indiana; Tim Monger, Executive Director for Indiana Department of Commerce; James Trobaugh, Mayor of Kokomo and other dignitaries to mark the occasion.

"Indiana Transmission Plant II represents a $455 million investment in the State of Indiana," said LaSorda. "We've dedicated over 38,000 training hours to prepare this workforce to build a world-class transmission that meets customers' highest expectations for quality, reliability and performance."

Chrysler Group's five-speed automatic transmission provides a full range of transmission performance to match a great variety of driving styles, situations and road conditions.

"This transmission offers Chrysler Group customers many benefits. The five-speed gear range provides a better balance of performance and fuel economy than a four-speed automatic transmission," said Eric Ridenour. "Fully adaptive electronic control of all shifting makes the powertrain feel responsive without harshness."

Smart Manufacturing

The company's strategy for ITP II involved "smart manufacturing" -- a combination of best practices, both within and outside the company, and a collaborative partnership with the United Auto Workers (UAW).

The company benchmarked facilities in Asia, South America, Europe and North America, creating a world-class strategy that infuses flexibility into the plant's daily operations. As a result, the design of the transmission as well as the manufacturing processes enables multiple models of transmissions to be built for different vehicles. This flexibility allows the plant to respond more quickly to marketplace demands and new product launches, without production losses.

According to LaSorda, the entire project was based on efficiency and flexibility. "Midstream, the scope changed from a plant expansion to the construction of an independent facility. To support the project, we added additional production capacity, which required new tooling and process modifications. Despite these changes, we were able to achieve results ahead of schedule and under budget, without additional resources."

Team Collaboration

From the development phase to implementation, ITP II benefited from the expertise of a cross-functional team that consisted of members representing engineering, manufacturing, purchasing, supplier quality and the UAW. This collaborative approach resulted in a unified vision for the plant and the creation of the plant's operating principles.

"The unique position of leading the project and overseeing plant operations enabled us to consider and incorporate ideas from all areas of the company," said Ed Vondell, ITP II Plant Manager and Project Leader. "The true key to our success was the team's ability to work together to meet our quality, safety, efficiency and delivery objectives."

Five Basic Operating Principles

ITP II has five basic operating principles that drive production daily. Each one supports another and is critical in sustaining successful, flexible operations:

* Employees function in teams, motivating and empowering each other to identify and eliminate waste, solve issues collectively and bring creative ideas to problem-solving;

* Standardization in the work, sequence and timing of all operations;

* Use of binary communication, allowing for immediate and simplified problem detection;

* Simple and direct flow in the set up of the assembly and subassembly areas, as well as in the flow of parts into and transmissions out of the plant;

* Continuous improvement strategies to achieve manufacturing objectives of improved safety, quality, delivery, cost savings and employee morale.

Community Commitment

The State of Indiana today announced that a grant totaling approximately $2 million will be used to enhance the training of the employees at ITP II, as well as the Chrysler Group's Indiana Transmission Plant I, Kokomo Transmission Plant and Kokomo Casting Plant.

"DaimlerChrysler's continued commitment in the Kokomo Community, including the opening of a brand new transmission facility, is great news for the state of Indiana," Davis said. "The company's focus on advanced manufacturing fits in perfectly with the economic development plans we have made through Energize Indiana, and we are thrilled to provide these grants as support for this investment."

Indiana Transmission Plant II will manufacture and ship transmissions to Brampton (Ontario) Assembly Plant, the production home of the Chrysler 300 Series and the Dodge Magnum. Both the 300 Series and the Magnum will begin production in early 2004.

NOTE TO EDITORS: Additional information and news from DaimlerChrysler is available on the Internet at: www.media.daimlerchrysler.com .