Two Detroit-Area Chrysler Group Plants to Receive Half-Billion Dollars in Upgrades

* Investment supports business model flexibility * Agreements demonstrate continued cooperation between company and United Auto Workers * State of Michigan, City of Sterling Heights show continued support

STERLING HEIGHTS, Mich., March 22 -- The Chrysler Group today announced the investment of more than a half-billion dollars in two Sterling Heights, Michigan facilities, pending Board approval. The upgrades will make the plants more flexible and efficient, and ready them for their role in Chrysler Group's ambitious future product strategy. The Sterling Heights Assembly Plant (SHAP) will get new tooling and equipment to build the company's next generation mid-size vehicles and will have the ability to produce a second, small vehicle line as well. The Sterling (Heights) Stamping Plant will get state-of-the-art tooling and dies that will add capacity, flexibility and lean stamping processes.

"These two plants will be on the leading edge of our strategy to become a fully flexible corporation," said Tom LaSorda, Chief Operations Officer of the Chrysler Group. "Production lines at the assembly plant will be able to produce multiple vehicles, and the stamping plant will be able to produce multiple assemblies on the same line."

The announcement was made today at the Chrysler Group's Sterling Stamping Plant and was attended by Michigan Governor Jennifer Granholm and Nate Gooden, Vice President and Director of the DaimlerChrysler Department, International United Auto Workers. Also in attendance were Sterling Heights Mayor Richard Notte, employees and other guests.

"DaimlerChrysler has been a long-time partner in Michigan's economic success," Granholm said. "Retaining these jobs will secure the creation of future advanced manufacturing jobs throughout the state and perpetuate our historical legacy of automotive leadership and innovation."

Recent agreements with UAW-represented employees cleared the way for the investments and also for new operating principles. The pacts are designed to foster greater creativity and innovation on the plant floor. They allow for work teams, self-designed work stations, a framework for flexible job classifications and extensive employee training. These and other elements will provide a better work environment and give increased support to assembly line operators.

"Today's announcement is indicative of what is possible when all of us -- state and city officials, Chrysler Group management, UAW leadership and the SHAP and Stamping Plant employees -- work together for a common goal," said Nate Gooden, UAW Vice President for DaimlerChrysler. "Looking forward, I am encouraged by the commitment to the training of management and UAW members in support of a team-based workforce organization, which will help ensure job security in the future."

The Sterling Heights Assembly Plant and the Sterling Stamping Plant have more than 2,500 employees each.

$278 million will be invested into assembly operations at Sterling Heights Assembly Plant to overhaul the body shop and improve the paint shop and assembly areas, including new tooling and about 620 welding and material handling robots. Further, the plant will have the capability to build multiple upper bodies and multiple car platforms, which will allow for the flexibility to add new models or "cross-load" models from other plants in order to better meet the dynamics of the market. The plant will build the replacements for the Chrysler Sebring and Dodge Stratus, and have the ability to produce the replacement for the Dodge Neon, should market demand lead to that in the future. These new capabilities will support the company's pursuit of product leadership by providing the flexibility to efficiently manage increased distinction between the Chrysler, Jeep(R) and Dodge brands.

Another $228 million will improve stamping operations at Sterling Stamping Plant and SHAP. At Sterling Stamping that will replace 50 material handling and weld robots and state-of-the-art processes and capabilities, such as new lean die standards and Common System Architecture (CSA) lines. New lean die standards will reap a 45-percent cost savings over current standards and processes. The new CSA lines allow for greater flexibility by enabling more than one product to be welded and assembled on the same line, while also reducing waste and improving quality. CSA lines can support the manufacture of multiple products and one pilot product at the same time -- a significant improvement from the one line, one product standards of the past.

"With government support and union cooperation, we are on our way to our goal of becoming an industry leader in automotive manufacturing operations," said Frank Ewasyshyn, Executive Vice President of Manufacturing for the Chrysler Group. "The flexibility we are adding to these plants and others will give us the ability to better respond to market fluctuations, and in the end, to better deliver the products that our customers want."

The Chrysler Group has invested nearly $5 billion in its manufacturing facilities in the past two years, including major renovations at Belvidere Assembly, Brampton Assembly, Jefferson North Assembly, Newark Assembly, Saltillo Assembly, St. Louis South Assembly, Toledo Assembly, and Warren Truck Assembly.