Detroit Diesel Corporation talks more about its 2002 Series 60 program

| 4/5/2002

Today Detroit Diesel Corporation (DDC) released additional information about its 2002 Series 60 engine program. DDC Vice Chairman and CEO Lud Koci made the following statement, "Because of recent and, to some extent, conflicting comments which have been made in the heavy-duty diesel engine industry regarding the October 2002 emission changes, we at DDC wish to assure our customers regarding DDC plans going forward.

"At the time we signed the consent decree in 1998, DDC was concerned that the time allowed to meet the new standards was minimal in comparison to normal development and testing. But consistent with our initial commitment, we have met our objectives. Having said that, we still believe the industry would be well-served by a longer period of time for customers to test our new engines and prove to themselves that the 2002 Series 60 continues the engine's long tradition of excellent performance, fuel efficiency and low cost of operation. Unfortunately, given the compressed development schedule, it is apparent that our industry will face another up and down cycle due to pre-buying and delayed buying. DDC wants to reassure our customers of our long-term commitment to them, and our near-term commitment to provide engines in October 2002 that meet EPA requirements without penalties or aftertreatment devices, while giving our customers the best product.

"Our engines will use Exhaust Gas Recirculation (EGR), which is the same technology chosen by almost all engine manufacturers worldwide to meet 2002 emissions levels. EGR adds some cost due to the additional hardware involved. However, we believe there are similar and substantial costs also involved in the one other alternate technology considered.

"DDC remains committed to support its customers who have made the Series 60 the number one selling heavy-duty engine model for an unprecedented 10 years in a row, and we are confident the EGR technology we are using is the best approach."

Early in 2001, in-use durability testing began on DDC's next generation of EGR engines designed to meet the emissions standards scheduled to take effect October 1, 2002. Since that time, six test vehicles have each run over 1,000 miles per day, at 80,000 pounds gcw. An additional test vehicle has been dedicated to cross country runs between company-owned assembly plants. This testing program is building on Detroit Diesel's ongoing experience producing EGR-equipped, heavy-duty engines.

DDC first began production of heavy-duty cooled EGR engines over two years ago for the NAFTA transit industry. Development work on those engines began in the late 1990s, and a number of pilot models were put in service in 1999. In the last two years, DDC has placed over 2,500 heavy-duty cooled EGR engines into service.

On February 8 and 15, 2002, two additional prototype Series 60 units were placed into revenue service at one of DDC's largest customers. These are 12.7 liter engines, rated at 430 hp and 1550 lb/ft torque. This is a truckload operation with each unit running 2000-2500 miles per week. Additional 2002 Series 60 pre-production test engines are being released to other customers for evaluation and are being installed by a number of OEMs on their standard assembly lines.

As previously announced, DDC will initially make approximately 95% of its current ratings available in October 2002. As is its customary practice, DDC will submit applications for 2002 emissions certification to the EPA approximately 30-60 days in advance of scheduled production.

As part of the development process for the 2002 engine, the Series 60 -- already the lightest of the "big bore" engines -- will become lighter still.

"As we put the finishing touches on the 2002 Series 60 engine, we had the opportunity to reduce overall weight," said John Morelli, Vice President - 2002 Engine Program. "While the EGR cooler adds a few pounds, an enhanced gear train configuration allows for a reduced size gear case cover and next generation air compressor.

"The air compressor is more efficient, requires less horsepower, and also saves weight," Morelli continued. "We have six months before production ramps up so there is still time to enhance the design of some of these components. The goal is to have the 2002 Series 60 engine, in final production trim, weigh less than the current configuration."

Morelli added, "We established many goals for the 2002 Series 60 engine during the initial concept phases. The first priority was to meet the new emissions standards, but, at the same time, we did not want to sacrifice any of the other product features that have made the Series 60 engine so popular. We wanted to maintain its reputation for excellent fuel economy and recommended oil change interval. We also wanted to reduce engine noise, improve performance of the engine brake, reduce weight, and maintain the overall drivability that drivers currently enjoy. We are meeting those goals in the relatively limited time we have. We know, however, that the 2002 Series 60 engine is going to continue to build on its own tradition of excellence.

"Some fleets have raised concerns about the limited time they have had to test these engines themselves, and while different customers have varied expectations for in-use testing of new engines, we have advised the EPA that new technology engines should have adequate time for in-use demonstrations to meet industry standards. However, with the progress made to date we will be ready to deliver engines."

Currently, the first production versions of the 2002 Series 60 engine are scheduled to be available in September 2002.

Detroit Diesel Corporation, headquartered in Detroit, Michigan, is engaged in the design, manufacture, sale and service of heavy-duty diesel and alternative fuel engines, automotive diesel engines and engine-related products. The company offers a complete line of engines from 22 to 13,000 horsepower for the on-highway, off-road and automotive markets and is a QS-9000 certified company. Detroit Diesel services these markets directly and through a worldwide network of more than 2,700 authorized distributor and dealer locations. Detroit Diesel is a subsidiary of DaimlerChrysler AG, the world's leading manufacturer of heavy-duty diesel truck engines. Within DaimlerChrysler AG, DDC is part of the Powersystems Business Unit.