Advanced Powertrains to Play Essential Role in The New Chrysler's Plans to Meet Customer Expectations for Quality, Performance and Fuel Economy

   -- Frank Klegon, Executive Vice President-Product Development, updates
                industry on direction for The New Chrysler
 -- Blend of 'traditional values' and 'fresh perspective' will enable The
              New Chrysler to reinvent business, Klegon says
   -- Recovery and Transformation Plan has attracted over 22,000 ideas
-- $3 billion powertrain offensive moving ahead as planned; steel going up
                             at Trenton site
   -- Improvements to conventional gasoline engines, including new V-6
 -- New mild hybrid, clean diesel applications coming in future products

   TRAVERSE CITY, Mich., Aug. 9 /PRNewswire/ -- Moving into a new era, The
New Chrysler is banking on advanced powertrains including hybrids and clean
diesels to meet demanding customer expectations for quality, performance
and fuel economy, according to Frank Klegon, Executive Vice President -
Product Development. Klegon outlined a $3 billion powertrain offensive and
other aspects of The New Chrysler's direction in a speech at the 2007
Management Briefing Seminars.
   "At The New Chrysler, our focus is on a strategy that will enable us to
be competitive long into the future," Klegon said. Private ownership will
create advantages for The New Chrysler, "the most significant being an
ability to bring more of our resources to bear on the 'business of the
business'," he said.
   Klegon's presentation came just three days after employees of The New
Chrysler celebrated "First Day," marking the transfer of majority ownership
to New York-based Cerberus Capital Management, while former owner
DaimlerChrysler AG maintains a significant minority stake.
   Blending traditional values, fresh perspective
   As part of the transition, Bob Nardelli was appointed Chairman and CEO,
with Tom LaSorda staying on as Vice-Chairman and President of The New
Chrysler. "This is an ideal arrangement that brings fresh eyes to The New
Chrysler, while providing the continuing leadership of an experienced team
that thoroughly understands our company and our industry," according to
Klegon.
   Klegon drew a parallel between the leadership team and The New
Chrysler's approach to its business, blending "traditional values" and "a
fresh perspective" in order to reinvent the business.
   "As we go forward, we remain connected to the same principles that have
sustained Chrysler right from the beginning - namely, a commitment to
innovation, the ability to act with speed and flexibility, and a passion to
be the best," Klegon said. "But we realize that we can't just be the same
company that we were before the 1998 merger with Daimler-Benz. The
competition is tougher, and it's global. We've got to be even better."
   The company's new blueprint for success - its Recovery and
Transformation Plan (RTP) - was unveiled in February and implementation is
well under way. "Under the RTP, we've identified more than 22,000 ideas
towards achieving our objective," Klegon said. He cited other measures of
progress including manufacturing efficiency, voluntary headcount
reductions, quality, an improved market mix with less dependency on fleet,
and expanded penetration in international markets.
   Hybrids, diesels in future plans
   A $3 billion commitment to new powertrains -- including more fuel-
efficient engines, transmissions and axles -- supports The New Chrysler's
emphasis on new products. Two weeks ago, the company became the first OEM
to announce a limited Lifetime Powertrain Warranty on most new Chrysler,
Jeep and Dodge vehicles. "This new warranty demonstrates our commitment to
customers and the confidence we have in our ability to produce quality,
reliable and durable vehicles -- starting with the powertrain," Klegon
said.
   Within the next decade, hybrids and diesels will each account for up to
15 percent of the North American market, Klegon predicted. In the hybrid
area, he identified these initiatives:
   -- As part of a joint venture with General Motors, Daimler and BMW, a two-
      mode hybrid system for the Dodge Durango and Chrysler Aspen is planned
      for next year, mated to a 5.7-liter HEMI with Multiple Displacement
      System (MDS). The two-mode system leapfrogs current technology and is
      expected to produce a 25 percent improvement in fuel efficiency overall
      and nearly 40 percent improvement in the city.
   -- A mild hybrid system, with less of the cost/weight penalty incurred by
      a full hybrid drivetrain, will be offered on an upcoming vehicle within
      the next few years.
   The New Chrysler intends to remain a leader in the application of clean
diesel engines and in the promotion of renewable biodiesel fuel, Klegon
said. The current U.S. diesel lineup includes Dodge Sprinter, Jeep Grand
Cherokee and the Dodge Ram Heavy Duty. The BLUETEC Ram Heavy Duty, with a
6.7-liter Cummins Turbo Diesel engine, meets 2010 emissions standards for
heavy-duty pickups for all 50 states, three years early. In addition, Dodge
will introduce an all-new, 50-state Cummins turbodiesel engine in
light-duty pickups after 2009. In the 2009 model year, the BLUETEC
diesel-equipped Jeep Grand Cherokee also will meet emissions standards in
all 50 states.
   Klegon noted that the company has designed its European offerings to
meet customer preferences there for diesel engines. "It's safe to say that
we'll see a continued migration of some of those products brought here to
the U.S. market, where we are also exploring additional penetration of our
3.0-liter V- 6 diesel engine, and the possibility of a four-cylinder
diesel," he said.
   Conventional Engines
   While demand for hybrids and clean diesels will grow in the coming
decade, conventional gasoline engines will still make up an estimated 70
percent of the market. Klegon reviewed The New Chrysler's initiatives in
that area:
   -- The New Chrysler has significant volume and capacity to keep up with
      increasing demand for the four-cylinder World Engine. Klegon noted that
      engine is direct-injection capable.
   -- A new, more fuel-efficient version of the E85 flex-fuel 4.7-liter V-8
      engine is being introduced, featuring a 30 percent increase in
      horsepower and a 10 percent increase in torque.
   -- A significantly upgraded version of the renowned 5.7-liter HEMI V-8,
       with gains in fuel efficiency, refinement, horsepower and torque, will
       debut in the 2009 model year.
   -- An all-new family of fuel-efficient "Phoenix" V-6 engines will join The
      New Chrysler lineup in 2010. The company has broken ground on several
      of its new plants including steel going up at its Trenton site. Among
      the engine's features: MDS, an aluminum die cast block, dual variable
      valve timing and a two-stage oil pump which provides fuel efficiency
      gains.
   The New Chrysler's investment in fuel-efficiency gains also includes a
new dual-clutch transmission that will be produced with Getrag and will
appear in significant volumes on 2010 vehicles, and a common axle program
with Mercedes- Benz. In addition, fuel efficiency will be improved by at
least 5 percent more through initiatives such as weight reduction; aero
drag improvements; reduced rolling resistance and brake drag to lower
road-loads; optimized accessory loads by electric load management; and
minimized drive train losses.
   "We're moving with real urgency to improve fuel efficiency across our
lineup, with powertrain upgrades and innovations playing a big part,"
Klegon said. "We're driving into an exciting new era at The New Chrysler,
with the support of a great new partner and with a solid plan. And we're
making the investments necessary to pave the way for future success."

SOURCE Chrysler LLC