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Cerberus Takes Over Majority Interest in Chrysler Group

Auburn Hills, Mich./Stuttgart, Germany, May 14, 2007 - The Board of Management of DaimlerChrysler AG has today decided, subject to the approval of the Supervisory Board and the relevant authorities, on the future concept for the Chrysler Group and the realignment of DaimlerChrysler AG. Completion of the transaction is subject to the satisfaction of customary closing conditions, including the receipt of regulatory approvals and Cerberus financing arrangements.

"We are confident that this transaction will create a standalone Chrysler that is financially stronger, with a winning combination of people, industry know-how, operational expertise and spirit of innovation that will accelerate the company's recovery, and help us regain our position as a competitive industry leader," said Tom LaSorda, President and CEO, Chrysler Group.

"Cerberus is the right strategic buyer for Chrysler, with a long-term commitment to Chrysler's growth and success. They are committed to working constructively with both union leadership and Chrysler's management team to help Chrysler realize its full potential. There are no new job cuts planned in connection with this transaction announced today. As a private company, Chrysler will be better positioned to focus on its long-term plan for recovery, rather than just short-term results," said LaSorda. "It will allow Chrysler to renew its focus on what has always made us special - our passion, creativity and commitment to delivering exciting Chrysler, Jeep and Dodge vehicles and quality Mopar parts to our customers, along with unparalleled customer service."

"With strong backing from Cerberus and a continued relationship with Daimler, Chrysler must demonstrate once and for all that we can win in this global marketplace." LaSorda siad, "It is ours to win. And Chrysler has it in its DNA to do just that."

Structure of the Transaction

Business Progress

In nearly 10 years as DaimlerChrysler, a lot has been done to move the businesses forward. The synergies possible between Mercedes-Benz and Chrysler have been fully utilized. Additional potential for collaboration is limited between two businesses operating in such different market segments. The strong volatility and pressure on margins in the Chrysler Group's North American core market have an increasingly negative impact on DaimlerChrysler's overall profitability and share-price development.

The Chrysler Group has made substantial progress in recent years. For example, production hours per vehicle have fallen from 48 hours in 2001 to just over 30 at present. Quality has improved by more than 40 percent over the past six years. Since 2002, more than $10 billion has been invested in new production facilities and technologies. And with 34 new models since 2001, Chrysler has one of the youngest product lines in the industry.

Dr. Dieter Zetsche, Chairman of the Board of Management of DaimlerChrysler AG said, "As a result, Chrysler today is structurally more sound than its North American based competitors. And with Cerberus as a partner, Chrysler will have the best chances of utilizing its full potential."

Ongoing Collaboration

Existing projects with the Mercedes Car Group will be continued, for example in the development of conventional and alternative drive systems, purchasing, and sales and financial services outside the NAFTA region. Furthermore, a Joint Automotive Council will be established in which representatives of both sides will assess and decide on the potential of new and current projects. The Council will be led by board-level members from each company.

Zetsche: "We very much look forward to our continued cooperation as business partners, as we want to continue to reap the mutual benefits of working together. That's one of the reasons why we're retaining a 19.9 percent equity position in Chrysler."

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