DaimlerChrysler Names TDS/US to Company's Largest Minority Logistics Contract

- Supply Chain Services Contract is Chrysler Group's Largest - Multi-Million Dollar Annual Savings Targeted - New Sequencing Center Part of Belvidere Refitting

AUBURN HILLS, Mich., Feb. 3 -- DaimlerChrysler today named TDS/US, a certified minority-owned Tier 1 enterprise, to its largest minority logistics contract ever. Under the agreement, TDS/US will operate an inbound parts sequencing center for DaimlerChrysler's Belvidere (Ill.) Assembly Plant.

The multi-year contract, valued at more than $200 million, is also the largest purchase of supply chain services the Chrysler Group has ever made.

Sequencing centers such as the one at Belvidere organize parts, deliver them to work stations on the vehicle assembly line and keep in-plant stocks at an optimal level. The TDS/US-managed center will receive more than 2,300 different parts. By carefully managing the material flow to the plant, the sequencing center helps workers in the plant focus on manufacturing quality and allows Belvidere to remain one of the most efficient manufacturing models in the Chrysler Group family.

"The combined TDS/US and DaimlerChrysler operations at Belvidere embody new practices that are key to closing the gap with benchmark assembly plants," said Peter Rosenfeld, DaimlerChrysler Corp. Executive Vice President - Procurement & Supply. "This supply chain management contract will allow us to meet the logistics needs of one of our soon-to-be most flexible plants while aggressively managing our material costs."

The announcement that TDS/US will provide sequencing, parts metering, kitting and container management services to DaimlerChrysler's Belvidere assembly comes just a week after the announcement of major DaimlerChrysler investment plans for Belvidere. Once the changes are in place, Belvidere will be capable of making as-yet-unannounced C- and D-segment (small and medium- sized) vehicles.

TDS/US expects to deliver 12 percent annual cost benefits over the current process model at Belvidere.

"TDS/US is committed to continually achieving cost and operating efficiencies in an effort to provide optimum service at the best cost," said Willie Lanier, Chairman TDS/US. "Managing material flow on the scale of Belvidere allows us to showcase our core competencies and deliver solid process efficiencies to this Chrysler Group facility."

The 500,000 square-foot TDS sequencing center is expected to employ more than 500 workers.

Workers at the Belvidere Assembly Plant are operating under a new UAW- supported labor agreement that becomes an important part of future manufacturing practices that are key to closing the competitive gap.

DaimlerChrysler will invest $419 million in Belvidere, adding a second shift and up to 1,000 jobs in preparation of an early 2006 production launch. Money will be spent to overhaul the plant's body shop, modify the paint shop, the final assembly area and stamping facility. The changes will give the automaker greater manufacturing flexibility, while simultaneously preparing the facility for future launches. And once implemented, will give the plant the capability to produce multiple vehicles while simultaneously piloting another model.

Belvidere Assembly was chosen for the investment, due to years of continuous performance improvements, especially in the areas of safety, efficiency and quality.

A key automotive indicator in efficiency, the 2004 Harbour Report named Belvidere Assembly the third most productive plant in its vehicle segment and was the Chrysler Group's most efficient assembly plant. Belvidere's Stamping facility is also the only stamping facility in North America to receive Harbour Consulting's "2004 Harbour Award" for manufacturing excellence.

TDS/US, based in Brownstown, Mich., is a minority-owned joint venture partner of TDS Automotive. TDS Automotive, with 4,500 employees, is based in London, Ontario and has locations in 10 countries across North America, South America, Europe and Asia. TDS supplies inbound and outbound logistics solutions to top automobile manufacturers.

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