Detroit Diesel Corporation, Freightliner LLC Announce Plans for Major Upgrade of Redford, Mich., Facility

*Redford to Accommodate New Heavy-Duty Truck Engine Production, Medium-Duty Engine Assembly and Expanded Axle Operations

*New Investment to Reach $275 Million

*Political and Business Leaders Attend Ceremony to Mark Start of 'Renaissance' for Redford Complex

REDFORD, Mich., Feb. 23 -- Detroit Diesel Corporation (DDC) and Freightliner LLC today announced plans for a $275 million investment in a manufacturing and office facility here. Under the companies' plans, the 3.2-million-square-foot Redford facility will become home to a new heavy-duty truck engine line, medium-duty engine assembly and expanded axle assembly. In addition, the Redford campus of buildings will house the new headquarters of Sterling Truck Corporation and Western Star Trucks, two business units of Freightliner LLC.

DDC and Freightliner LLC today announced details of the major upgrade to the Redford facility at a ceremony attended by U.S. Senator Carl Levin, Michigan Governor Jennifer Granholm, U.S. Representative Thaddeus McCotter, other government dignitaries, company and UAW officials, employees and guests.

Detroit Diesel Corporation and Freightliner LLC are both part of DaimlerChrysler's Commercial Vehicles Division. DaimlerChrysler is the world's largest commercial vehicle manufacturer.

Andreas Renschler, member of the DaimlerChrysler Board of Management and head of the Commercial Vehicles Division stated, "I would like to offer my congratulations to all those involved, whose hard work and perseverance made this major investment in the Redford facility possible.

"I would also like to reiterate my sincere thanks to Governor Jennifer Granholm and her colleagues from the state of Michigan for their crucial support of this key enterprise," added Renschler.

Speaking at today's event, Rainer Schmueckle, president and chief executive officer of Freightliner LLC, said, "The bold new plans for the Redford facility signify the shared commitment of Detroit Diesel Corporation and the Freightliner group to continuing leadership in all aspects of North American commercial truck manufacturing -- including vehicles, components, technology and people. The new versatility of the Redford facility will further extend our ability to serve our customers in North America. We are assembling significant future capability to design and manufacture a variety of key components for North American commercial vehicles here at Redford."

"Detroit Diesel is extremely pleased to announce this major new investment in the Redford facility," said DDC President and Chief Executive Officer Carsten Reinhardt, who also gave an address at today's event. "The decision to move ahead with a sizeable upgrade of the Redford facility shows tremendous confidence in the capabilities of our workforce and operations."

Reinhardt added, "We also acknowledge the leadership shown by the UAW in helping the Redford location qualify for these outstanding investments."

Schmueckle and Reinhardt said that the new plans for Redford represented a significant commitment to the region. In exploring plans and ultimately deciding on an investment at Redford, the companies worked closely with the state of Michigan, as well as the Township of Redford.

"Today's announcement is a win-win-win for the workforce, the company and the people of Michigan, demonstrating -- once again -- that Michigan is a vital center of the global auto industry," said Governor Jennifer M. Granholm. "This project could not have occurred without enlightened and cooperative labor-management relations and state and local governments working to keep this skilled talent pool working here."

"The UAW is extremely proud of its role in meeting the challenges of maintaining existing work and drawing new work for its membership in Redford," stated UAW Regional Director Jimmy Settles. "As a Union, we are committed to the concept that job security for workers is best delivered through a world- class competitive manufacturing environment."

Coming to Redford

Built in 1938 and expanded several times in phases, the Redford facility is already home to Detroit Diesel Corporation's headquarters and manufacturing operations, including the state-of-the-art DDC Series 60 EGR engine manufacturing line. It also houses MTU Detroit Diesel manufacturing operations, which builds large diesel engines for marine, mining and other applications. Since 2001, Redford has also been the home of Axle Alliance Company (AAC). A part of the Freightliner group, AAC builds front and rear axles for heavy- and medium-duty commercial vehicles. All of these operations combined currently employ a total of approximately 2,800 people at the facility.

Over the next two years, the technical capabilities of the facility will be expanded considerably and it will become one of the most advanced truck engine and components manufacturing facilities in North America.

New Heavy-Duty Engine Line

By 2007, the Redford facility will accommodate the manufacturing of an all-new heavy-duty truck engine. Currently in development by Detroit Diesel and parent company DaimlerChrysler -- the engine will be launched in 2007 and will incorporate the latest in diesel engine and emissions technology. For an extended transition period, the new engine will be sold in tandem with the popular Detroit Diesel Series 60 engine. In the NAFTA market, the new engine will be installed in heavy-duty vehicles produced by business units of Freightliner LLC.

Medium-Duty Engine Assembly

The Redford facility also will house assembly operations for the MBE 900 medium-duty diesel truck engine. Available since 1999 in North America, the MBE 900 is currently built in Mannheim, Germany. Beginning in 2007, North American versions of the engine will be assembled at Redford. The MBE 900 powers Freightliner group vehicles for a wide variety of commercial vehicle applications including beverage, utility, construction and pick-up and delivery applications.

Expanded Axle Operations

In the Redford facility upgrade, Axle Alliance Company (AAC) will expand into gear set manufacturing, along with its current axle assembly operations. Installed as proprietary axles in a variety of Freightliner group vehicles, these components continue to grow in popularity. Over the next year, AAC will increase its Redford operation by 85,000 sq. ft. to implement a state-of-the- art gear set manufacturing facility.

  Construction has already begun to accommodate these new operations.

  "Component Manufacturing Center"

"With the new investment in the Detroit Diesel Redford complex -- including the strategic location of new heavy-duty engine production, the addition of MBE 900 assembly and the advent of Axle Alliance Company -- the Redford facility is becoming the group's commercial vehicle 'Component Manufacturing Center,'" said Freightliner LLC's Schmueckle. "It is a place where leading commercial vehicle components will be designed, developed, tested and produced. These components will be instrumental in helping customers of the Freightliner group's brands operate more productively, efficiently, reliably and in an environmentally-friendly manner."

Headquarters for Sterling Truck Corporation and Western Star Trucks

Schmueckle added that the importance of the Redford complex will be further enhanced by the addition of a new headquarters for Sterling Truck Corporation and Western Star Trucks. "A headquarters location in Redford will offer strategic advantages for Sterling and Western Star, including synergies with the numerous DaimlerChrysler operations on site and in the area," he said.

Sterling and Western Star will relocate from Willoughby, Ohio, to Redford in the second quarter of this year.

"Renaissance"

"Today is the symbolic start of a new future at Redford," Detroit Diesel's Reinhardt summed up. "This truly represents a 'Renaissance' for Detroit Diesel's Redford complex."

Detroit Diesel Corporation is the leading manufacturer of on-highway medium- and heavy-duty diesel engines for the commercial truck market. The company offers a complete line of engines from 170 to 515 horsepower for the on-highway and vocational markets. Through its corporate headquarters in Detroit, Michigan, Detroit Diesel is engaged in the design, manufacture, sale and service of these products, in addition to supporting alternative and hybrid engine strategies for the commercial truck marketplace. Detroit Diesel is a subsidiary of DaimlerChrysler and part of the Freightliner Group.

Freightliner LLC, headquartered in Portland, Oregon, is the largest manufacturer of heavy-duty trucks in North America and a leading manufacturer of medium-duty vehicles. Freightliner produces and markets Class 3-8 vehicles under the Freightliner, Sterling, Western Star, American LaFrance and Thomas Built Buses nameplates. Freightliner LLC is a DaimlerChrysler company.

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  http://www.detroitdiesel.com/
   for additional DDC news.
   
   Visit the Freightliner LLC Web Site at
   http://www.freightliner.com/
   for additional Freightliner news.

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