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DaimlerChrysler Invests $455 million in its Indiana Plant

10 October 2000

DaimlerChrysler Corporation Invests $455 million in its Indiana Transmission Plant to Build Mercedes-Benz Developed Transmission

    *  First component sharing since the merger was announced: Chrysler Group
to use Mercedes-Benz transmission
    *  Investment includes 600,000 sq. foot expansion of Indiana Transmission
Plant

    AUBURN HILLS, Mich., Oct. 6 DaimlerChrysler Corporation
(DCC) will invest $455 million in its Indiana Transmission Plant (ITP) in
Kokomo, Ind. to produce a Mercedes-Benz developed transmission -- the first
example of component sharing between the Chrysler Group and Mercedes-Benz
since the merger of Chrysler Corporation and Daimler-Benz in 1998.
    DCC will expand ITP by 600,000 square-feet and will build the Mercedes-
Benz "W5A580" transmission for use in future Chrysler, Dodge and Jeep(R)
products.  The five-speed, automatic, rear-wheel drive transmission, currently
built in the company's Hedelfingen plant just outside Stuttgart, is used in
the current Mercedes-Benz S, E, C and M-Class vehicles.  Starting in April
2001, the Hedelfingen-built transmission will be used in the European version
of the 2002 Jeep Grand Cherokee, built in Graz, Austria.
    "As the first major component sharing between Chrysler Group and Mercedes-
Benz products, this project is just the beginning of more manufacturing
synergies to come," said Gary Henson, DCC Executive Vice President --
Manufacturing.  We continue to benchmark our facilities worldwide for best
practices and have saved millions of dollars in increased purchasing power,
shared technologies and efficiencies throughout our global manufacturing
network.  As we move forward and introduce more products, we will continue to
reap tremendous synergies in manufacturing, while maintaining the distinct
attributes of our individual brands."
    The company will break ground on the new facility later this year, with
production slated to begin in 2004.  The new facility will have the capacity
to produce 400,000 W5A580 transmissions annually.  ITP currently produces
about 400,000 45RFE rear-wheel drive automatic transmissions for Jeep vehicles
and Dodge trucks annually.  Next year, it will double production of the 45RFE
as part of its original plan.  Approximately 1,700 employees work at ITP on
two eight-hour shifts.  DCC invested over $1 billion in 1996 to build ITP,
which began production in 1998.
    "Literally thousands of people, working as partners, have come together to
secure jobs and strengthen the local economy while reinforcing Indiana's place
in the extended DaimlerChrysler family," said Frank Fountain, Senior Vice
President of Government Affairs.  "With the cooperation between the city of
Kokomo, Howard County, the State of Indiana, the United Auto Workers and all
of the people in Kokomo, DaimlerChrysler will continue to grow and provide a
boost to the region and the state."
    The W5A580 debuted in 1995 Mercedes-Benz passenger vehicles and is known
to be one of the smoothest, most fuel-efficient and cost-effective
transmissions in the industry.  Its unique three-channel torque converter
helps provide an exceptionally smooth ride and shifting, while reducing fuel
consumption.  The Hedelfingen plant produces 650,000 units annually for
worldwide Mercedes-Benz production.