Detroit Diesel Corporation (DDC) to Manufacture All-New Heavy-Duty Engine at Redford Manufacturing Facility in 2007

REDFORD, Mich., Feb. 23, 2005 -- Detroit Diesel Corporation today announced that it has formalized plans to manufacture a family of all-new heavy-duty diesel engines. The new engine line is being designed and developed on a global basis by DaimlerChrysler with a strong focus on the North American market. The new engines will be produced at Detroit Diesel's facility here beginning in 2007.

In North America, the new heavy-duty engine will be available in vehicles produced by business units of Freightliner LLC. Freightliner LLC is the largest manufacturer of heavy-duty vehicles in North America and a leading manufacturer of medium-duty and specialized, commercial vehicles. Detroit Diesel Corporation and Freightliner LLC are both part of DaimlerChrysler.

"The new heavy-duty engine is the largest development program in DaimlerChrysler's Commercial Vehicles Division worldwide, coordinating the efforts of hundreds of engineers and other professionals," said Rainer E. Schmueckle, Freightliner LLC president and chief executive officer. "Detroit Diesel and the Freightliner group are very proud to not only participate in the program, but also to be the first to produce this engine worldwide in 2007."

The new engine will be designed to meet upcoming emissions rules and will offer four different displacements covering a broad range of power. A 14.8- liter version of the engine is slated to begin production at the Redford Facility during 2007, followed by later introduction of a 15.6-liter, 12.8- liter and 9.9-liter engine.

"We are extremely excited that our Redford facility will manufacture North American versions of the new, heavy-duty engine," said Carsten Reinhardt, president and chief executive officer of Detroit Diesel. "Being a partner in its development and being able to support its manufacturing represents a tremendous vote of confidence that DaimlerChrysler has in our capabilities."

Detroit Diesel will have responsibility for NAFTA production of the engine -- including the machining of many of the engine's major components, the complete engine assembly, in addition to final testing activities.

Detroit Diesel will launch and begin production of the new heavy-duty engine during the same year it will launch an enhanced Series 60 and a Mercedes-Benz MBE 900 engine.

To accommodate the new production, significant modifications will be made to the Redford plant. The overall investment to prepare the facility for the new engine and other additional production exceeds $275 million.

"Reconfiguration at our Redford site is well underway to accommodate new production demands," said Reinhardt. "Procurement of long lead time machining tools began late last year, along with reorganization activities required to accommodate the new production and assembly lines. These reorganization activities will take us through most of 2005, followed by installation of primary equipment in 2006 to make us ready for production by 2007."

By 2007, the Detroit Diesel facility in Redford will be the only manufacturing facility in the commercial truck industry that produces a full line of medium and heavy duty engines and axles for commercial truck markets.

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.