DaimlerChrysler to Invest CDN $768 Million in Canada

* Key agreements with Ontario and Federal Governments support growth of DaimlerChrysler’s Canadian operations
* New Windsor Assembly Plant paint facility to be operational by 2007
* Windsor and Brampton Assembly Plants to receive investments for enhanced flexible manufacturing
* University of Windsor/DaimlerChrysler Canada Automotive Research and Development Centre to continue to conduct automotive R&D

Windsor, Ontario, Nov 21, 2005 –

Upon reaching key agreements with the Ontario and Federal Governments, the Chrysler Group is announcing details of a comprehensive investment plan totaling CDN $768 (US $640) million in its Canadian operations, including new investments in facilities, flexible manufacturing and automotive research and development. The investment plan will strengthen the Chrysler Group’s leadership role in the Canadian automotive industry. Through October, Chrysler Group is the second leading seller and manufacturer of motor vehicles in Canada.

Flexible manufacturing is the ability to respond to market demand by manufacturing multiple vehicle models and model variants on the same assembly line.

“The support of the Ontario and Federal Governments is instrumental in building the business case for new investments in our Canadian operations,” said Tom LaSorda, President and CEO – Chrysler Group. “With these new investments, DaimlerChrysler’s Canadian manufacturing and R&D operations will continue to play a critical role in the company’s global drive to achieving industry-leading products and benchmark operations. At the end of the day, this new investment is a combination of government involvement, a responsible new collective agreement with the Canadian Auto Workers union (ratified in September 2005), and ultimately, the market response to the products the Chrysler Group manufactures in Canada.”

Today’s announcement builds on the company’s previous CDN $2.6 billion investments in Canadian manufacturing since 2002 and over CDN $500 million in R&D operations since 2000. DaimlerChrysler Canada employs approximately 12,000 people directly and sells Chrysler, Jeep® and Dodge vehicles through a network of 475 retailers.

Windsor Assembly Plant
DaimlerChrysler will invest CDN $610 (US $508) million over the next three years at the Windsor Assembly Plant to prepare it for future new products and to build an all-new, state-of-the-art paint facility that will be operational by 2007.

The new paint facility will increase manufacturing flexibility, quality, capacity and productivity while reducing material costs, emissions, waste and energy consumption. The 185,000-square-foot paint shop will be the most flexible in the Chrysler Group system, capable of accommodating the dimensions of at least 11 different body styles. The coatings process will be fully automated, utilizing robots with seven axes of rotation.

A new addition to the paint process in Windsor will be a “paint sludge dryer,” where the excess paint in the system is captured, removed of moisture, and then reused in asphalt and automotive parts. The target is to reach zero landfill waste from the operation of this facility.

Consistent with the company’s asset reutilization strategy, the steel used for the new paint structure will be 90 percent reclaimed from the former Pillette Assembly Plant.

Originally built in 1928, today the Windsor Assembly Plant is the largest of the Chrysler Group’s 14 assembly plants at 4.01 million square feet. It is capable of building two completely different vehicle platforms and piloting a third simultaneously on the same production line. Windsor Assembly was one of the first Chrysler Group plants to implement flexible manufacturing.

The Windsor Assembly Plant currently manufactures the Dodge Grand Caravan and the Chrysler Town & Country minivans with the Stow ‘n Go TM seating and storage system, and the Chrysler Pacifica sports tourer. This year marks the plant’s 22nd anniversary of minivan production and the 12th anniversary of three shifts of operation.

Automotive Research and Development Centre
This investment plan provides funding for the University of Windsor/DaimlerChrysler Canada Automotive Research and Development Centre (ARDC) for the continuation of leading-edge R&D. The ARDC specializes in areas of R&D such as vehicle durability, emissions and fuel economy, automotive recycling, vehicle safety and automotive lighting. It is also unique in its dedication to education partnerships by providing real-world experience to automotive engineering students.

ARDC engineers play an integral part of the development of the Windsor Assembly Plant’s new paint facility through the testing and refining of the new paint process in the Automotive Coatings Research Facility — the only one of its kind in the world — all before one single unit is produced. It’s important to get it right the first time — paint colour is consumers’ second biggest consideration when making a vehicle purchase decision.

The ARDC, covering 205,000 square feet, employs 200 engineers and has placed 175 co-op engineering students since its inception in 1996.

“Leadership in the fiercely competitive global automotive industry requires innovation and flexibility, both hallmarks of our Canadian facilities,” said Frank Ewasyshyn, Executive Vice President – Manufacturing, Chrysler Group. “The Chrysler Group’s investment strategy in Canada is to maximize the capabilities of both our flexible assembly operations and our unique Automotive Research and Development Centre.”

Brampton Assembly Plant
The Chrysler Group is also investing in its workforce with skills upgrading and training at the Brampton Assembly Plant and the Brampton Satellite Stamping Plant as a result of the Dodge Charger launch and the introduction of a third shift of production earlier in the year. The additional shift was implemented to not only increase the plant’s capacity, but also to improve its flexibility for the manufacture of the company’s family of rear-wheel-drive sedans.

The Brampton Assembly Plant was built in 1986 and acquired by Chrysler Corporation with the purchase of American Motors Corporation in 1987. Flexible manufacturing of rear-wheel-drive vehicles started at the beginning of 2004 with the launch of the Chrysler 300 and the Dodge Magnum.

Off of one platform, the workers at Brampton are currently building the Chrysler 300, Dodge Magnum and Dodge Charger, including all of the model variants such as the Chrysler 300C, rear-wheel- and all-wheel-drive models, high performance SRT models and the Dodge Magnum police cruiser.

“More than 80 years after Walter P. Chrysler began operations in Canada, the Chrysler Group is proud to be Canada’s second leading seller and manufacturer of vehicles — the majority of which are produced for export markets. The automotive industry has changed dramatically over the years, but DaimlerChrysler’s automotive leadership role in Canada continues to grow,” said Steven Landry, President and CEO – DaimlerChrysler Canada. “It is a credit to the Ontario and Federal Governments that Canada is able to compete in the global automotive industry.”

©1998-2005 DaimlerChrysler. All rights reserved.

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