Chrysler Group's Huntsville Electronics Operations To be Acquired by Siemens VDO Automotive

AUBURN HILLS, Mich., Feb. 9, 2004 -- Siemens VDO Automotive Electronics Corporation has signed an agreement to acquire the Chrysler Group's Huntsville Electronics operation located in Huntsville, Ala. The facility produces automotive electronics products for Chrysler, Jeep(R) and Dodge products.

Through its production of instrument clusters, engine and powertrain controllers, car body electronics and vehicle audio products, the Huntsville operation generates approximately $1 billion in annual sales.

"This acquisition elevates Siemens VDO Automotive's NAFTA business to a new level in electronics leadership," said Siemens VDO Automotive AG Group President and CEO Wolfgang Dehen. "It facilitates our strategy to grow within our core competencies, which includes vehicle instrumentation, driver information and powertrain electronics. Also, it will provide more value and synergy to our customers as we will be better positioned to cascade technical solutions and leverage our engineering capabilities across our main regions and OEM partners."

According to Chrysler Group President and CEO Dieter Zetsche, the acquisition will benefit the automaker and its employees, as well as Siemens. "As part of the transformation of the Chrysler Group, we have said the sale of a component operation must meet three requirements. It must make good business sense for the company, our employees and the buyer.

"This transaction will enable the Chrysler Group to continue focusing on our core business of creating innovative cars and trucks that set us apart from the competition," Zetsche said. "Additionally, the agreement with Siemens will give us access to the latest technology in audio products, instrument clusters and powertrain controls and will contribute positively to the future of the City of Huntsville."

"Huntsville's location and talented workforce were two very attractive considerations," said John Sanderson, president and CEO of Siemens VDO Automotive's NAFTA region. "Located in the heart of the U.S. southeastern automotive corridor, the Huntsville operation provides Siemens VDO with an existing, highly skilled workforce, combined with extensive expertise in our core product areas."

As a subsidiary of Siemens VDO Automotive, the Huntsville Electronics operations will gain access to a broader range of new business opportunities within the global $125 billion automotive electronics market.

Discussions between Siemens VDO Automotive, Chrysler Group and United Auto Workers (UAW) International Union culminated in an innovative new collective bargaining agreement that will help enable the Huntsville facility's future competitiveness. Pending finalization of the agreement, Siemens VDO Automotive intends to assume full operational responsibility for the electronics facility in the spring of 2004. Details of the transaction have not been disclosed.

"We are encouraged by the commitment that Siemens VDO Automotive has made to our UAW members in Huntsville and are eager to work with the company to ensure long-term employment and success at the Huntsville facility," said Gary Casteel, UAW Region 8 Director.

Situated on a 180-acre site, Huntsville Electronics is composed of two plants operating two shifts daily. The first plant opened in 1977 and is 232,000 square feet. The second plant opened in 1988 and encompasses 849,000 square feet. Currently, operations in Huntsville employ more than 2,000 people who are represented by the UAW.

About Siemens VDO Automotive AG

Siemens VDO Automotive AG is one of the world's leading suppliers of electronics, electrical and mechatronic products to the automotive industry. As development partner of the automotive industry, the company manufactures products for powertrain, engine control electronics and fuel injectors which improve engine performance and reduce emissions. Other core products include driver information and car communications systems with instrumentation, audio and navigation systems, telematics and multimedia applications, including complete cockpits, providing increased comfort and convenience.

Siemens VDO Automotive AG offers products for chassis and car body, such as airbag, ABS and access control systems which contribute to increased vehicle safety and security. The company's Service & Special Solutions Division markets products for consumer and commercial vehicles, with a focus on fleet management, audio and navigation systems.

In fiscal year 2002/03, Siemens VDO Automotive AG generated sales of $9.6 billion (euro 8.4 billion). North American sales represent 19% percent of total sales, at more than $1.8 billion (euro 1.6 billion). Siemens VDO Automotive AG is a wholly-owned subsidiary of Siemens AG , headquartered in Munich.