Chrysler President and CEO Tom LaSorda's March 20 letter to employees

[DETROIT NEWS]

Dear Colleagues,

This is a pivotal time in the Chrysler Group's history, and I want to keep the lines of communication open. Last week, I joined leaders from GM, Ford, Toyota and the UAW in testifying before a subcommittee of the U.S. House Energy and Commerce Committee regarding the issues of climate change and the need to reduce national oil consumption. These issues are critical to the future of the entire auto industry.

In summary, I affirmed DaimlerChrysler's commitment to develop and produce new vehicle technologies that address these concerns, including flex-fuel vehicles, clean diesels, hybrid systems and fuel cells along with more fuel-efficient conventional engines. In addition, I explained our company's support of a three-pronged, comprehensive approach to climate change and energy security: one that includes a combination of vehicle efficiency improvements; the expanded use of alternative fuels such as ethanol and biodiesel; and the harnessing of market forces to help drive consumer demand.

We expect the U.S. Department of Transportation (DOT) to increase corporate average fuel economy (CAFE) standards for cars as they did for trucks--an action that we fully support. However, new laws proposed in Congress that would mandate unrealistic, arbitrary increases in CAFE could hinder our progress and put our business at risk.Our Washington office is working closely with members of Congress to encourage a reasonable and achievable fuel-economy standard for our industry set by DOT. As part of this effort, Frank Ewasyshyn has asked facility managers to support plant visits by members of Congress to discuss our business and how we can work together to effectively reduce petroleum consumption and greenhouse gas emissions.

We hope that all of you will show your support during these visits. In addition, during the months ahead we will be asking you to partner with us in communicating with members of Congress on this critical issue.

Meanwhile, here at the Chrysler Group, we are operating in unique circumstances as news reports continue to circulate about our potential future direction. While we have been through turnarounds before, in some respects the current situation is unprecedented because of the uncertainty involved.

As I wrote in my previous letter to you, as the Board of Management considers its options, its members (including myself) are under strict legal requirements to refrain from comments. However, I want to emphasize two points.

The first is that Dieter Zetsche has publicly stated his commitment to do the best for DaimlerChrysler and for the Chrysler Group.

The second point is that, whatever our future situation will be, we need to succeed as a team with our Recovery and Transformation Plan. Our long-term viability depends on it. Everyone wants to be associated with a winner, and we need to prove again that we are winners.

To a great extent, the future is in our own hands. We need to rededicate ourselves to taking waste out of our business while providing great vehicles and an ownership experience that will attract customers and keep them coming back. This focus on customers is a key part of our Recovery and Transformation Plan that will help us be a viable automotive company for the long term. Aggressively pursuing global expansion through partnerships and alliances also is critical.

As we go through this period of uncertainty, I am encouraging our leadership team to listen to you and empower you to get the job done. We have what it takes to be great, but it requires everyone's best efforts and best thinking to get there. I know that you take pride in your work and in your company, and I trust you will focus on the urgent job at hand--to develop, build and sell great products and establish the foundation for a long and prosperous future.

Sincerely, Tom