DaimlerChrysler AG (DCAG) will invest $600 million in a major expansion at its Tuscaloosa, Alabama, site to double production for the next generation Mercedes-Benz M-Class sport utility vehicle, it was announced today. The expansion is expected to generate up to 2,000 new jobs and could double production capacity from 80,000 units to roughly 160,000 units at the Tuscaloosa facility.

"The worldwide demand for the M-Class has exceeded all expectations and shows that Mercedes-Benz made the right decision when it entered the sport utility market and came to the U.S. to build it," said Prof. Juergen Hubbert, DCAG member of the board for Mercedes-Benz and smart passenger vehicles, at a press conference here today. "Our success would not have been possible without the great partnership we formed with the State of Alabama and without the strong workforce that we have found here. Alabama has become an important home for Mercedes-Benz."

Currently, there are about 1,900 team members employed at MBUSI, and the expansion could bring employment close to 4,000.

"This expansion is a direct result of the hard work and commitment of our team members, " said Bill Taylor, president and CEO of Mercedes-Benz U.S. International (MBUSI), the Tuscaloosa-based DCAG subsidiary that manufactures the M-Class. "The M-Class may be the vehicle we are building, but our greatest product is our people. And they're ready to handle the growth coming our way."

MBUSI sits on 966 acres, with only one-third of the site currently being used by the existing 1.2 million square foot plant. In addition to the factory, a training institute and a visitor center reside on the property. It is estimated the expansion could add an additional 1.5 million square feet of building.

Production of the M-Class began in Tuscaloosa in early 1997, with about 220,000 vehicles produced here since that time. Currently, approximately 80,000 vehicles are built annually, with 350 vehicles coming off the line each day, in two shifts. M-Class vehicles built in Tuscaloosa are sold in more than 135 countries around the world, with the U.S. representing more than half of the total sales.

MBUSI currently builds the ML320, ML430, ML55 AMG, and the ML270 CDI (diesel) for Europe.

The award-winning M-Class, which has only been on sale since the fall of 1997, has been a tremendous success worldwide, with demand far exceeding original expectations. The Tuscaloosa plant initially represented a $300 million capital investment and was built for a capacity of some 65,000 units. However, two expansions were necessary to achieve a production increase to 80,000 vehicles.

"The Tuscaloosa plant has only been in operation three years, yet in that short time it has established itself as a world-class production site for Mercedes-Benz. It has become a learning field for our entire company and an example of best practices," said Helmut Petri, head of worldwide production for Mercedes-Benz. "We look forward to the growth we'll realize in Tuscaloosa, which will help us to satisfy the demands of our Mercedes-Benz customers worldwide."

In the first half of 2000, U.S. sales of the M-Class were up approximately 30 percent over last year, while in Western Europe they were up more than 60 percent. Worldwide demand has been so strong that, in 1999, DaimlerChrysler decided to supplement its Tuscaloosa capacity and began building M-Class vehicles in Graz, Austria, to meet demand in Europe. Up to 25,000 vehicles a year, for a limited period of time, will be produced at the Steyr-Daimler-Puch factory in Graz. In 1999, 91,200 M-Class vehicles were produced worldwide, between the Tuscaloosa plant and the Graz facility.

Daimler-Benz AG (now DaimlerChrysler AG) chose Tuscaloosa, Alabama, as the location for its first Mercedes-Benz passenger vehicle factory in the U.S. in September l993, after an extensive five-month site selection process. Tuscaloosa represented the best combination of criteria the company was seeking, including a strong workforce, good infrastructure and pro-business climate.

With the new expansion, DaimlerChrysler could become the fifth largest employer in Alabama, with more than 7,000 employees between its Chrysler electronics plant in Huntsville, Alabama, and the Tuscaloosa Mercedes-Benz factory. The total capital investment made by DaimlerChrysler since 1994 in Alabama could be more than $1.3 billion, once the expansion is complete.

"The partnership between Mercedes and Alabama provides hope and dreams of a better quality of life to Alabama families. In 1993, Mercedes took a chance. In 2000, they take a stand that says we believe in Alabama, we believe in Alabama workers, and we want the world to know it," said Don Siegelman, Governor of the State of Alabama. "Today, thanks to the continued dedication and commitment to excellence that DaimlerChrysler and Alabama workers share, Alabama continues to stake its claim as a formidable force in the automotive industry and in the world of business."

DaimlerChrysler AG is one of the world's leading automotive, transportation and services companies, selling products in more than 200 countries with manufacturing facilities in 34 countries. The company had revenues in 1999 totaling $151 billion.