# Chrysler Restructuring Plan for Long-Term Viability Executive Summary

February 17, 2009 73% of our total Sales are within the U.S. 61% of our vehicle Production is in the U.S. 74% of our total Employees are U.S. based 78% of our Purchased Material is from U.S. based suppliers 62% of all our Dealers

are based in the U.S.1 TABLE OF CONTENTS Page Introduction ................................................................................................................... ...................................... 2 Restructuring Plan Assump tions and Ke y Metrics ................................................................................. ............. 4 Restructurin g Acti ons.......................................................................................................... ................................ 7 Strategic Alliance ............................................................................................................. ................................. 10 Commitment to Energy Security and Environmental Sustainability ................................................................. . 12 Compliance with Fuel Economy Regulations....................................................................................... ............. 13 Compliance with Em issions Regulations .......................................................................................... ................ 14 Achieving a Competit ive Product Mix and Cost Structure......................................................................... ........ 15 Conclusion ..................................................................................................................... ................................... 18

List of Tables

1. Revenue Impact of U.S. SAAR Levels......................................................................................... .................. 4 2. Request for Government Loan................................................................................................ ....................... 5 3. Key Operating Metrics of the Restru cturing Plan ............................................................................ ............... 6 4. Net Pres ent Value.......................................................................................................... ................................ 7

List of Figures

1. Status of Rest ructuring Actions............................................................................................ .......................... 8 2. Improvement of Fuel Economy Using Powertrain and Portfolio Op portunities with Fiat ..................................................................................... ....................... 10 3. Expansion through Cu rrent Geographic (Perce nt Sales by Region)............................................................ 1 1 4. Chrysler’s Electric Vehicle Produc t Portfolio .............................................................................. .................. 12 5. 2008 Harbour Report (Manufacturing Efficiency)............................................................................. ............ 15 6. Chrysler Total Quality Improvement......................................................................................... .................... 16 7. Customer Promoter Score (CPS) / Appeal of New Dodge Ram .................................................................. 172 

# Chrysler Restructuring Plan for Long-Term Viability

Introduction On December 2, 2008, Chrysler LLC (“Chrysler” or “the Company”) submitted its Plan for Short-Term and Long-Term Viability to Congress as part of its request for a $7 billion working capital loan from the U.S. government to suppor t its short term restructuring and long term viability. On January 2, 2009, Chrysler received an initial $4 billion loan from the United States Department of the Treasury, the terms of which require the Company to submit a restructuring plan to achieve and sustain long-term viab ility, international co mpetitiveness and energy efficiency.

The restructuring plan presented demonstrates Chrysler’s ability to meet those requirements through its continued focus on implementing cost reductions and modifica tions to its capital structure to improve its balan ce sheet, and on developing a fuel-e fficient product portfolio that meets customer expectations and governmentally imposed environmental requirements. Chrysler’s management believes that this rest ructuring plan, which assumes achievement of concessions from all constituents, Chrysler Financial maintaining adequate retail and wholesale financing capacity, and incremental funding fr om the U.S. Treasury can be successfully implemented and will result in the Company’s long- term viability, international competitiveness and energy efficiency.

Due to the continued deteriorati on in the economy which has led to an unpreceden ted decline in
the automotive sector since our December 2 nd plan submission, in addition to the $7 billion original request, $4 billion of which has been received, Chrysler is requesting an additional $2 billion, for a total of $9 billi on to support ongoing operations.3 The availability of credit for automotive custom ers and dealers is the single most important element of Chrysler’s viability. Because of the cr edit market crisis and subsequent rating agency actions, restrictions were placed on Chrysler Financial’s credit conduits. Because of these restrictions, Chrysler Financial was forced to greatly reduce the level of retail and wholesale financing support for customers and dealers in th e U.S., Mexico and Canada. Most significant was the complete discontinuation of lease fina ncing in the U.S. and Canada in August 2008, which led directly to reductions in total sales volumes of 20% and 50% fo r the U.S. and Canada, respectively.

Chrysler Financial received a U.S. Treasury loan of $1.5 billion in mid January, 2009 to support retail financing, and it was estimated that this amount would provide ade quate financing capacity through March 31, 2009. However, this is not a long-term solution. Because of the continued lack of liquidity in the credit markets, se veral follow-on proposals have been submitted by Chrysler Financial to the U.S. government for a long-term solution to ensure its financing capacity. It is critical that these requests be resolved, as adequate retail and wholesale financing capacity for Chrysler Financial is a re quirement for Chrysler’s viability.

The Company’s standalone restructuring plan de monstrates viability which could be further enhanced with a strategic alliance that more effectively utilizes its manufacturing capacity and positions the Company for growth. Chrysler and Fiat S.p.A. have signed a non-binding letter of intent that is conditioned upon Chry sler meeting all restructuring ta rgets set forth in Chrysler’s U.S. Treasury Loan Agreement Department. If completed, this partnership would greatly improve Chrysler’s long-term viability.

It is essential that Chrysler achieve the con cessions and planned bala nce sheet restructuring identified in its restructuring plan, including the receipt of in cremental government funding. If the requisite concessions are not achieved by the government’s March 31 st funding deadline, management believes the only alternative would be to immediately plan for an orderly wind down of all operations through a court-supervised liq uidation. This is clear ly not an alternative Chrysler would prefer, but is one that the Co mpany is prepared to implement if required.4 Chrysler has had discussions with each of its constituents and believes that it has made substantial progress in seeking conce ssions from its dealers, suppliers, 2 nd lien lenders, shareholders and the UAW. In order to comple te its restructuring plan, the Company requires further concessions of $5 billion of additional liability and interest burden relief from its creditor
groups 1

.
The Company has engaged in disc ussions with it s creditor groups 1 and believes it is possible to reach agreement on the terms and conditions of required concessions. With the continuing participation and diligent e ffort of all creditor groups 1 , and support from the President’s Designee and the Presidential Task Force on Autos, Chrysler will be in a position to finalize its restructuring plan and receive addi tional government funding, by March 31, 2009. 

### 1) Restructuring Plan Assumptions and Key Metrics

Due to the continued lack of c onsumer credit, which has preven ted interested customers from purchasing new vehicles and has prevented dealer s from securing financing to support continued wholesale orders, Chrysler has revised its S easonally Adjusted Annual Rate (SAAR) forecast covering the next four years. Chrysler’s rest ructuring plan is base d on conservative SAAR assumptions that reflect the rea lity of a declining automotive i ndustry. The restructuring plan projects, commencing in 2009, a SAAR level of 10.1 million units, and for years 2009 through 2012, an average SAAR level of 10.8 million units. This represents a reduction from the Company’s original December 2, 2008 submi ssion to Congress of 7.2 million units, or on average, 1.8 million units annually over the four years.

Table 1 – Revenue Impact of U.S. SAAR Levels (millions)
2009 2010 2011 2012
December Submission 11.1 12.1 13.7 13.7 Current Restructuring Plan 10.1 10.6 11.1 11.6 Change (1.0) (1.5) (2.6) (2.1) Cumulative Change (1.0) (2.5) (5.1) (7.2) Estimated Revenue Impact on Chrysler (a) $ (2,500) $ (6,250) $ (12,750) $ (18,000) Estimated Cash Impact $ (500) $ (1,250) $ (2,550) $ (3,600) (a) Based on assumed market share of 10%

Footnote 1: Creditors include the 1 st lien lenders, the U.S. Government and the UAW-VEBA5 For Chrysler, this represents a sales d ecline of approximately 720,000 units, assuming a 10% market share, and approximately $18 billion in lost revenue and a $3.6 billion decline in cash inflow over the four years.

As the Company indicated in its December 2 nd Congressional testimony, the availability of credit to automotive consumers and dealers is the single most important element of Chrysler’s viability.
The continued credit market turmoil has resulted in rejection of consumer loan applications and lost sales to dealers, which in turn has led to reduced wholesale orders for Chrysler vehicles and further vehicle production cuts.

This chain of events has created a rapidly dec lining SAAR trend which di rectly and immediately
reduces cash inflow in a manner that cannot be addressed adequately through even the most aggressive restructuring actions . These softer-than-expected market conditions during the 4 th quarter have continued into the 1 st quarter of 2009 resulting in an industry-wide decline in
automotive sales . As a result, Chrysler now requires an additional $2 billion in cash beyond that anticipated in Chrysler’s December submission, bringing its total request to $9 billion.

Table 2 below summarizes Chrysler’s initial and current funding request:

Table 2 – Request for Government Loan Funding To Date ($Billions) Funded to Date $ 4 Remaining $ 3 Total Original Requested $ 7

Additional Request $ 2 TOTAL Funds Requested $ 9

Chrysler proposes to repay the U.S. Treasury Loan with interest, fees and out-of-pocket expenses beginning in 2012. The fees to be paid are in lieu of warrants, given Chrysler is a private
company.6 Chrysler’s restructuring plan includes the benef it of restructuring actions and concessions that management believes will be reached with its co re constituents including: the UAW, dealers, suppliers, shareholders, 2 nd lien lenders and other creditor groups. These benefits are reflected in the restructuring plan in fixed costs sa vings, improved EBITDA and improved cash flow.

The restructuring plan shows that the Compa ny will have adequate liquidity throughout the planning period while making si gnificant loan amortization payments. The chart below summarizes the key operating metrics of the re structuring plan on the pro forma basis and reflects what the Company believes to be a conservative outlook.

Table 3 - Key Operating Metrics of the Restructuring Plan

The restructuring plan shows that Chrysler achie ves a positive net present value of $17.3 billion after taking into account all exis ting and projected costs, including repayment of 100% of the U.S. Treasury Loan and implementati on of the restructuring plan.

*For the seven years prior to the 2008 industry turn down (2001-2007) Chrysl er’s market share was flat compared to GM and Ford whose market share declined 17% and 25% respectively 2008 Unaudited 2009 Plan 2010 Plan 2011 Plan 2012 Plan 2013 Plan 2014 Plan 2015 Plan 2016 Plan U.S. Industry SAAR (Mills) (Light Duty Only) 13.2 10.1 10.6 11.1 11.6 12.1 12.6 13.1 13.7 Worldwide Shipments (000 units) 2,065 1,618 1,775 2,085 2,120 2,175 2,227 2,281 2,345 U.S. Market Share (Retail & Fleet) 10.8% 10.4% 10.7% 10.7% 10.7% 10.7% 10.7% 10.7% 10.7% U.S. Dealer Inventory (000 units) 398 355 312 306 306 306 306 306 306 Material Cost Savings (1.1%) 0.25% 0.25% 0.25% 0.25% 0.50% 0.50% 0.50% 0.50% Net Pricing (1.0%) (0.5%) (0.5%) (0.5%) (0.5%) (0.25%) (0.25%) (0.25%) (0.25%) Capital Expenditures (Bils) $2.3 $2.3 $2.3 $2.6 $2.6 $2.6 $2.5 $2.5 $2.5 Fixed Cost excluding VEBA (Bils) $10.9 $10.2 $10.2 $10.2 $10.2 $10.1 $10.1 $10.1 $10.1 EBITDA (Bils) $0.3 $2.9 $5.0 $3.9 $3.9 $4.4 $4.7 $5.2 $5.6 Cash - Year End Balance (Bils) $2.5 $9.0 $10.6 $10.8 $11.4 $11.3 $11.4 $12.2 $13.4 *7 Table 4 – Net Present Value

2009 2010 2011 2012 2013 2014 2015 2016

Free Cash Flows to Equity 6.5 $ 1.7 $ 0.1 $ 0.6 $ (0.1) $ 0.1 $ 0.8 $ 1.2 $

Terminal Value EBITDA at 2016 5.6 $ Multiple 5.0 Terminal Value (Before Debt) 28.0 $ Less Debt: (13.7) 5% 10% 15% 20% Terminal Value (Net of Debt) 14.3 $ 9.7 $ 6.7 $ 4.7 $ 3.3 $

NPV of Free Cash Flows at 1/1/2009 9.7 8.7 8.0 7.5 NPV of Net Terminal Value 9.7 6.7 4.7 3.3

NPV of Chrysler Cash Flows 19.4 $ 15.4 $ 12.7 $ 10.8 $

Plus: Cash at 1/1/2009 1.9 1.9 1.9 1.9

NPV per Section 7.20 of UST Loan 21.3 $ 17.3 $ 14.6 $ 12.7 $ NPV Discount Rates



### 2) Restructuring Actions

Upon becoming an independent company on Augus t 3, 2007, Chrysler took immediate action to redesign its business model, enhance its product portfolio and create a more competitive cost structure. In response to deteriorating ec onomic conditions, Chrysler initiated additional measures to reduce costs and improve competitiveness which included:

• Workforce reduction of 32,000 • Discontinuation of 4 models

• Capacity reduction of 1.2 million units (over 30% of total capacity) • Sale of $700 million in non-earning assets

• Reduction of 12 manufacturing shifts8 12 Figure 1: Status of Restru cturing Actions (2008 and 2009)

In developing its restructuring plan, Chrysler ha s worked closely with a ll key constituents to explore additional concessions. The identified concessions that management believes can be implemented by March 31, 2009 include:

• Executive/Management Concessions – Chrysler will fully comply with the restrictions established under section 111 of EESA relative to executive privileges and compensation. In addition, the company has suspended th e 401K match, performance bonuses, merit increases, and eliminated retiree life insurance benefits.

• Dealer Concessions – Chrysler will achieve cost savings and improved cash flow through a number of initiatives including reduced dealer margins, elimination of fuel fill reimbursement, and reduction of service contract margins.

• Union Concessions – The term sheets for the Labor Modifications and VEBA modifications fundamentally comply with the requirements of the U.S. Treasury Loan and once realized, will provide Chrysler wi th a workforce cost structure that is competitive with the transplant automotive manufacturers. The VEBA modifications term sheet however is conditioned on, among other things, further due diligence and satisfactory debt restructuring. Chrysler will continue to work diligently with its labor unions and retirees’ class couns el in structuring and negotia ting concessions necessary to In-Process 1.3M

$1B 13 35,000

7

Capacity Cuts

Sales of Non-Earning Assets Shift Reduction Workforce Reduction

Mod els Discontinued

Complete 1.2 Million Units

$700M 32,000

4

1 29 the Company’s continued viab ility and look forward to th e assistance of the U.S. Treasury in that effort.

• Supplier Concessions – The Company has initiated a di alogue with its suppliers and believes that it will be able to obtain substantial cost reductions from suppliers that will result in achieving targeted savings. Chry sler also supports the supplier associations’ proposals which would provide a governme nt guarantee of OEM accounts payables.

• 2 nd Lien Debt Holders Concessions – The holders of the 2 nd Lien Debt have expressed a willingness to convert 100% of their debt to equity.

• Shareholders – Current shareholders have also indi cated a willingness to relinquish their current equity position to support Chrysler’s viability plan.

Additionally, the viabilit y plan includes a further reduction of outstanding obligations from certain creditor groups by $5 billion. In addi tion to strengthening the Company’s balance sheet for the long-term, this reduction will also provide immediate cash flow via interest savings of between $350 - $400 million annually.10 

### 3) Strategic Alliance The written and oral testimony Chrysler submitted to the U.S. House and Senate in 2008 stated the Company’s intent to seek the benefits of gl obal partnerships and alliances. Chrysler has signed a non-binding agreement to pursue a strategi c alliance with Fiat which represents an attractive opportunity for significant strategic and financial benefits.

Figure 2: Improvement of Fuel Economy Using Po wertrain and Portfolio Opportunities with Fiat

Journey 50% Flex Fuel Vehicles by 2012

MEDIUM/HEAVY

MID/LARGE SUVS PICKUP & LARGE VAN

MINIVAN

LARGE FULLSIZE MIDSIZE COMPACT SUV SMALL / MINI

COMPACT

Fiat Punto

C-EVO Sedan

D-EVO Sedan Alfa Giulia Alfa Milano Small Gas Engine 0.9L

FIRE Gas Engine 1.1L NA – 1.4LNA, Mair, TC

Alfa CUV FAM B Gas Engine 1.8L DI

TC Alfa Mito B Hatch 5 Pass Fiat 500

World Gas Engine 1.8L – 2.4L NA, TC

Phoenix Gas Engine

V6 3.6L NA Multi Air-Efficient Engine Valve Train Technology

High Pressure Common Rail Diesel Technology Dual Clutch Transmission

Efficient V6 Engine Technology

The proposed Fiat alliance would enhance Chrysler ’s restructuring plan, provide customers with access to competitive fuel-efficient vehicle platform s, provide Chrysler with substantial cost saving opportunities and provide Chrysler with dist ribution capabilities in key growth markets. The alliance would also help st abilize the U.S. automotive market and enhance Chrysler’s ability to more quickly repay the U.S. Treasury loan.11 Figure 3: Expansion through Current Ge ographic – Percent (%) Sales by Region

North America

South America Europe

Africa Asia POTENTIAL COMBINED

18.3

39.4

1.7 0.4 40.2 STANDALONE

33.3

65.2 1.0 0.4 0.1 2.5
0.1 1.5 5.5

90.4

Chrysler’s intent is to build on its product allia nces or form global alliances to enhance its viability. The Company has proposed that a percenta ge of its new equity be retained in a trust controlled by the Presidents Designee to facilitate these alliances in the future. This provision will avoid a redistribution and reallocation of Chrysler equity in the future.12 

### 4) Commitment to Energy Security and Environmental Sustainability In 2008, Chrysler offered six vehicles with hi ghway fuel economy of 28 miles per gallon or better. The 2009 product lineup offe rs improved fuel economy with 73% of its vehicles showing improved fuel economy compared with the prior y ear’s model. Fuel economy will continue to improve in 2010 with the introduction of the al l-new Phoenix V-6 engine , which will provide fuel efficiency improvements of between 6-to-8 percent. A two-mode hybrid version of the Company’s best-selling vehicle, th e Dodge Ram is scheduled for 2010.

The first Chrysler electric-drive vehicle is also scheduled to reach the market in 2010. It will be followed by other electric-drive vehicles, includ ing Range-extended Electr ic Vehicles, in order to further reduce fuel consumption and greenhou se gas emissions in Chrysler’s mainstream
vehicles.

Figure 4: Chrysler’s Elect ric Vehicle Product Portfolio

GEM/Peapod Renewal NEV

>200 mpg

HEV 28-30 mpg ENVI #6 ReEV 40-50 mpg Battery Electric Vehicle (NEV, CEV, BEV)

Range-Extended Electric Vehicles

(ReEV) 2009 2010 2011 2012 2013

Dodge RAM 1500 HEV Gen 2 26-28 mpg Dodge RAM 1500 HEV Gen 1 25-27 mpg ENVI #3 ReEV (or HEV)

55-65 mpg 2014

ENVI #1

BEV

> 200 mpg ENVI #2 City EV

> 200 mpg

ENVI #5 ReEV 60-70 mpg Hybrid Electric Vehicles

(HEV)

NOTE: Denotes inclusion in Chrysler’s 10Nov2008 ATVM Loan Program Submission to DOE In DOE Plan alternative

HEV 40-45 mpg ENVI #4 ENVI #4

ReEV >45 mpg

The proposed Fiat alliance would further help the Company achieve fuel economy improvements as Chrysler gains access to Fiat’s smaller, fuel efficient platforms and powertrain technologies.13 This alliance would enable Chrysler to reduc e its capital expenditures while supporting the Company’s commitment to develop a portfolio of vehicles that meet the country’s energy security and environmental objectives.


### 5) Compliance with Fuel Economy Regulations Chrysler is committed to meeting Federal Corporate Average Fuel Economy (CAFE) requirements. The restructuring plan supports the company’s compliance with all federal fuel economy standards as set forth in the Energy Independence and Security Act of 2007. Going forward, Chrysler supports the deve lopment of a uniform national st andard that reflects the input
of all constituents.

Included in the main report are estimates of Chry sler’s required minimum CAFE levels in model years 2008 to 2011, based on a pre-publication draf t of the NHTSA Final Rule for model years
2009 to 2015 that became available ea rlier this year. The Appendix contains a series of charts showing the specific technologies to be used in each vehicle to achieve CAFE compliance, along with the timing of the deployment of the technologies. This de scription of specific actions demonstrates that Chrysler will comply with th e CAFE standards throughout the term of the U.S. Treasury loan and beyond.

Pursuant to California Assembly Bill 1493 (“ AB 1493”) the California Air Resources Board (“CARB”) has also adopted vehicle emissions standards to control greenhouse gas (“GHG”) emissions, chiefly carbon dioxide. The GHG sta ndards include sales-weighted fleet average requirements using a formula that requires increases in fuel ec onomy, because the only current available technology to reduce carbon dioxide em issions from gasoline- or diesel-powered vehicles is to reduce fuel consumption. Thirteen other States and the District of Columbia have adopted the California GHG standards. These st ates comprise approximately 50% of the United States vehicle market during model years 2012-2016

.14 If the California GHG standards take effect, Chrysl er will try its best to comply using available technology, however, as a last resort it may be nece ssary to restrict the sa les of certain vehicle models in order to comply with the GHG fleet average requirements in each jurisdiction that has adopted them and that has decided to enforce the fleet average requirements. The ultimate effect of the California standards on Chrysler’s product plan depends on a number of developments as indicated in the Appendix.


### 6) Compliance with Emissions Regulations The United States EPA and the CARB enforce regul ations to control hy drocarbons and nitrogen oxides, the two vehicular air emissions aimed at reducing smog. Chrysler vehicle engine systems and catalytic converters oxidize and redu ce these emissions to regulatory levels, and control emissions of other compounds subject to other EPA and CARB regulations. EPA and CARB also enforce “on board diagnostic” (“ OBD”) regulations governing vehicles onboard computer, which among other things optimize the performance of the catalytic converter and determine if emissions-related comp onents are properly functioning.

Chrysler pre-production and post- production vehicles must pass rigorous testing, after which vehicle certification to a speci fic set of EPA and CARB emi ssions standards is obtained. Chrysler also must warrant that its vehicles wi ll pass such testing when properly maintained
and used.

The Appendix includes materials that show that Chrysler will co mply with emissions standards as expressed, per the regulations , as a weighted average of the various categories of emissions requirements versus fleet sales volumes for cars and trucks esta blished by EPA and CARB for the time period relevant to the loan agreement. The Appendix also shows Chrysler’s compliance with CARB’s “zero emission vehicle” (“ZEV”) re quirements, which are promulgated for model years 2009 through 2010, and Chrysler’s best underst anding of the as yet unpromulgated ZEV requirements for model years 2011 and later.15 

### 7) Achieving a Competitive Pr oduct Mix and Cost Structure As noted above, Chrysler has taken a number of ac tions over the past several years to improve its cost competitiveness. According to the Harbour Report, Chrysler has improved its manufacturing productivity by 32% over the past seven years to equal that of Toyota, making Chrysler and Toyota the most productive automake rs in North America in terms of hours of assembly per vehicle.

Figure 5: 2008 Harbour Repor t (Manufacturing Efficiency)

44.28

40.60

32.90

30.37 37.42 35.85
33.71

25 30 35 40 45 50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 44.59

40.53 37.59

30.88

29.54 8.3%

7.8% 4.2%

6.0% 2.4%

7.7%

not released

Having achieved world class hours of assembly time per vehicle, assuming the implementation of new wage rates consistent with the governme nt mandated labor modifications, Chrysler will be on par with transplants from a manufacturing cost perspective.

Since becoming a standalone company on August 3, 2007, Chrysler has made quality a major focus. In its first 60 days as an independent automaker, Chrysler management approved more than 260 product enhancements representing an investment of $500 million. Hundreds of additional engineering improvements were made in the following months to enhance the interior quality, fit and finish, and the dr iving performance of many Chrysl er products. In the 2008 J.D.16 Power and Associates Initial Quality Survey, the Company’s vehicles improved scores by an average of 5 points. In addition, in 2008 Chrysler achieved the lowest warra nty claim rate in its history – a 30% improvement co mpared to the prior year. A nd, among the seven major auto manufacturers, Chrysler had the lowest number of vehicles recalled in 2008 as measured by NHTSA.

Figure 6: Chrysler Total Quality Improvement

Chrysler was the first company in the industry to appoint a Chief Customer Officer devoted to improving real and perceived quality. As part of this initiative, Chrysler has formed crossfunctional customer satisfaction teams that act as problem solvers on new vehicles as they are being developed and launched.

Figure 7: Customer Promoter Score (CPS) Confirms Consumer Appeal of New Dodge Ram

Chrysler’s product line is a key co mponent to its restructuring pl an. Next year Chrysler will
launch revisions to four of its previously highly successful pl atforms: Jeep Grand Cherokee, Dodge Charger, Dodge Durango and Chrysler 300. The Chrysler 300C has become the most 2009 Dodge Ram Truck

• First vehicle tested with customer promoter score system

• First 700 customers contacted

• 99.8% positive comments

• 12 awards received in 2009 2001 2007 2008 2009 2010 2011 2012Warranty Failure Rate 2001 -2007 Average Annual

Improvement Rate was 2.4%

.........................Better 30%17 awarded car in automotive histor y since its launch in 2005. This launch will be followed by a new, bolder, more intimidating Dodge Ch arger and an all new unibody Dodge Durango.

Chrysler will continue to work with its dealer body to rationalize the num ber of dealerships to enhance the long-term profitability of all de alers. Through Project Ge nesis, Chrysler is committed to facilitating the ability to offer each of Chrysler’s three product brands under one roof, creating an enhanced buyi ng and service experience for th e consumer and supporting the viability of Chrysler dealers in communities acro ss the country. The proposed alliance with Fiat would allow Chrysler to broa den its product offerings – brin ging the American consumer a
broader selection of cars to meet their needs - and providing Chrysler d ealers with an expanded product line and opportunity fo r improved profitability.18 

### 8) Conclusion

We believe Chrysler’s restructur ing plan, as approved by its Boar d of Directors, demonstrates that, with constituent concessions, adequate retail and wholesale capacity for Chrysler Financial, a restructuring of our lia bilities resulting in a $5 billion re duction in debt and debt service requirements and additional governmental assistance, Chrysler can achieve and sustain long-term viability, international competitiveness and energy efficiency. The Company’s viability can be further enhanced through strategi c alliances and partnerships. Ho wever, in order to weather the current economic crisis, in addition to the orig inal $7 billion, $4 billion of which has been received, Chrysler is requesting an additional $2 billion, for a total of $9 billion, to support ongoing operations due to the continued deterior ation in the economy, which has led to an unprecedented decline in the automotive sector since the Company’s December 2 nd plan submission.

While this is a substantial inve stment of taxpayer funds, Chrysler believes the requested loan is the least costly available altern ative and will provide an important stimulus to the U.S. economy that will eventually deliver positive returns for the American taxpayer.

Respectfully submitted,

Chrysler LLC