Chrysler Group Productivity Tops U.S. Automotive Industry, According to Harbour Report

* Six percent year-over-year improvement tops U.S. industry
* Company posts 24 percent improvement over four years
* Five Chrysler Group plants top their segment
* Transmission manufacturing is industry benchmark

Auburn Hills, Mich., Jun 1, 2006 –

The Chrysler Group has improved its overall manufacturing productivity by an industry-leading 24 percent over the last four years, according to The Harbour Report North America 2006. The company improved its overall hours per vehicle (HPV) time by 6 percent to 33.71, from 35.85 a year ago. The most improved in the industry.

The annual Harbour Report is a broadly accepted measure of productivity in the automotive industry. Nearly all major manufacturers participate in the survey.

“Chrysler Group’s 28 percent improvement since 1998 in total manufacturing labor hours per vehicle is a reflection of the discipline and commitment throughout its manufacturing organization,” said Ron Harbour, President – Harbour Consulting. “Most notable is Chrysler’s 6 percent gain in assembly productivity in 2005. This is strong evidence that the company has sustained the progress of recent years.”

Among the highlights for the Chrysler Group, the company’s St. Louis (MO) South Assembly Plant, producers of the Chrysler Town & Country and Dodge Grand Caravan, was recognized as North America’s top minivan plant. Transmission manufacturing productivity was the best in the industry and the company’s engine productivity was most improved. Company plants were the leaders in five segments.

Frank Ewasyshyn has led Chrysler Group’s Manufacturing efforts as Executive Vice President for the last two years. Tom LaSorda, now Chrysler Group’s President and Chief Executive Officer, was the head of manufacturing operations for the two prior years.

“We have come a long way over the last four years in achieving productivity improvements,” said Ewasyshyn. “The fact that we are leading the pack with the greatest productivity improvements reinforces our commitment to achieving world-class levels by 2007. We must continue to stay focused on our operational excellence initiatives during the company’s most significant vehicle launch year ever, ten all-new products.”

“We have to continue our efforts to achieve benchmark levels to ensure long-term success,” said UAW Vice President Nate Gooden, who directs the union’s DaimlerChrysler Department and is a member of the DaimlerChrysler Supervisory Board.

Five Chrysler Group plants scored at the top of their segment. They are:

* Minivan St. Louis (MO) South Assembly Plant
* Front-wheel drive transmission Kokomo (Ind.) Transmission Plant
* Rear-wheel drive transmission Kokomo (Ind.)Transmission Plant
* 8-Cylinder OHC engine (4.7L) Mack (Detroit, Mich.) Engine Plant
* 8-Cylinder OHV engine (HEMI®) Saltillo (Mexico) Engine Plant

Powertrain
The Chrysler Group transmission productivity improved 8.3 percent — to 3.55 hours per transmission, the industry benchmark.

Assembly
Assembly operations made a 5.7 percent improvement, topping all other manufacturers in year-over-year improvements. Chrysler Group’s minivan plant in St. Louis topped its segment at 20.84 hours per vehicle.

Stamping
Chrysler Group also demonstrated expertise in stamping operations. Belvidere (Ill.), home of the Dodge Caliber, Jeep® Compass and the upcoming Jeep Patriot, was among the top 10 stamping plants — the highest for a domestic manufacturer.

The company is employing a number of initiatives intended to continue improving manufacturing excellence in the future. Among them are increased support of assembly employees, continued employee training and new workplace practices that are designed to foster greater creativity and innovation among employees on the plant floor. The company will also redesign material handling operations, employee work stations and will continue to invest in plants.

The Chrysler Group is now ranked third in capacity utilization, which counts as a plant running two, eight-hour shifts, five days per week, according to Harbour.

The Harbour Report is one of several measures the Chrysler Group uses to measure its manufacturing operations. Other areas that are tracked by the company include safety, quality, delivery, cost and morale, all of which contribute to manufacturing performance.

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