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.

DaimlerChrysler Corp. in Indiana

In addition to ITP, DCC has four facilities in Indiana: Kokomo Transmission and Kokomo Casting Plants; Indianapolis Foundry in Indianapolis; as well as New Castle Machining in New Castle. The company also broke ground today on a $77 million modernization of its New Castle facility.

DCC employs almost 12,000 people among its five facilities in Indiana.DaimlerChrysler’s presence in Indiana dates back to 1925, when Walter P. Chrysler purchased Maxwell-Briscoe Motors, which produced the Maxwell vehicles beginning in 1907.