Auburn Hills, Mich., May 30, 2006 -

The Chrysler Group today announced the manufacturing launch of the all-new Jeep Compass at its Belvidere (Ill.) Assembly Plant. The plant, which was extensively retooled in 2005, has become a flagship for Chrysler Group's adoption of flexible manufacturing.

Flexible manufacturing is allowing the Company to bring its new vehicles to market more quickly and the Belvidere Assembly Plant to manufacture multiple products on one assembly line. Production of the all-new 2007 Dodge Caliber began there in January 2006, while the 2007 Jeep Patriot is scheduled to begin later this fall.

"We are now starting to see the results of the new flexible manufacturing process that we believe is a competitive advantage for the Chrysler Group," said Frank Ewasyshyn, Executive Vice President - Manufacturing. "Thanks to Belvidere's ability to build multiple models off one assembly line, we expect the Jeep Compass production to cost significantly less than the initial investment we made in the plant to build the Dodge Caliber."

Robotics:
At the core of the new manufacturing process is a body shop comprised of robots instead of the dedicated tooling that was previously used. Belvidere is Chrysler Group's first assembly plant to use a body shop comprised entirely of robotics. Only the robots' end affectors, or "hands," need to change in order to build the different models. That tool change is done automatically, within the time it takes to cycle from one vehicle to the next. In addition, the Belvidere plant is flexible enough to vary the production mix between three products anywhere from 0 to 100 percent of each model. A fourth model can also be piloted, or test-built at the same time, helping reduce the time needed to make new-model changeovers. The new body shop and other upgrades are part of a $419 million total Belvidere investment announced in 2005.

Many other changes are also taking place within the Chrysler Group manufacturing process to accommodate the multiple models. For example, new ways to make the required amount of stamping dies are saving the company up to 60 percent on the cost of those dies.

Material Flow:
New methods of material handling are being implemented to manage the complexity of three models being built on one assembly line. The inbound parts sequencing center manages more than 1,800 different parts that are used in the Jeep Compass and Dodge Caliber build process. In addition to sequencing, this center provides parts metering, kitting and container management to the Belvidere Assembly Plant and delivers complete subassemblies just-in-time to the manufacturing floor.

A tunnel connects the 500,000 square-foot sequencing center to the Belvidere Assembly Plant. This facility, operated by TDS/US — one of Chrysler Group’s largest minority-owned suppliers — represents the highest level of integration within a Chrysler Group plant. TDS/US organizes parts, puts them in “kits” for individual work stations and delivers them to the end of a connecting tunnel for Belvidere employees to transport to the manufacturing floor. This process maintains in-plant stocks at optimal levels, minimizes delivery time and reduces costs an estimated 12 percent a year compared with the previous process. By carefully managing the material flow at the plant, the sequencing center helps workers focus on manufacturing quality and allows Belvidere to remain one of the most efficient manufacturing examples in the Chrysler Group family.

These pre-assembled modules reduce the number of components required to assemble the Jeep Compass
and Dodge Caliber, improving quality, productivity and worker ergonomics.

SMART:
A new workplace organizational model, coined SMART manufacturing, is increasing the flexibility of the Belvidere workforce, while fostering greater creativity and innovation from plant employees. This model is being implemented throughout Chrysler Group's Manufacturing organization. In addition to extensive training, the new workplace model lets employees design their own work stations. These changes provide a better work environment for employees and give increased support to assembly line team members.

"Belvidere Assembly is running on all cylinders," said Kurt Kavajecz, Plant Manager – Belvidere Assembly Plant. "In the first half of 2006, we added a second shift and started production of the Jeep Compass and Dodge Caliber. In addition, we're getting ready to launch the Jeep Patriot in a few months and have recently announced the addition of a third shift, approximately 1,000 new jobs. Our new workplace organization model, in which employees work in small teams, has fostered greater creativity and innovation on the plant floor and made for a very smooth process."

Jeep Compass:
The 2007 Jeep Compass is an all-new modern-styled compact Jeep vehicle that delivers fun, freedom, utility, excellent fuel efficiency and Jeep 4x4 capability — all at a terrific value. With a starting U.S. Manufacturer's Suggested Retail Price (MSRP) of $15,985, including a $560 destination charge, Jeep Compass combines the packaging and functionality of a sport-utility vehicle with the performance, handling, fuel economy and price of a compact car or small pickup truck. Jeep Compass is designed to appeal to new buyers who might not have previously considered a Jeep vehicle.

The Chrysler Group is the city of Belvidere's largest employer and has a significant impact on the community with 2,885 employees throughout Illinois who generate $188 million in annual wages (year-end 2005). The 3.7 million square-foot Belvidere Assembly Plant employs approximately 2,650 people. Union members are represented by United Auto Worker's Union Locals 1268 and 1761. The plant began production of the Plymouth Fury and Doge Monaco in 1965. The Chrysler Group will implement its flexible manufacturing process in its Sterling Heights (Mich.) and St. Louis South (Fenton, Mo.) Assembly Plants next.

DaimlerChrysler Media