Dear Employees,

These are truly unimaginable times for our industry. We continue to be in the most difficult economic period any of us can remember. The combination of troubled financial markets, difficult credit, volatile commodity prices, the housing crisis and declining consumer confidence continues to weigh on the economy. Never before have auto industry sales contracted at such a fast rate. Throughout this challenging time for our industry and our company, we have continued to face the realities of our business environment. Working as a team, we have been right-sizing our organization to become as competitive as possible.

As business conditions today continue to decline, and we prepare for economic challenges extending into 2009, additional actions will be needed to re-size our company to remain competitive. Due to the unprecedented conditions in the auto industry, both in our home and international markets, we are targeting a 25 percent reduction in our salaried and supplemental work force. As always, we will strive to do this in a socially responsible way, with respect and gratitude to those who have contributed so much to our company over the years.

Your leadership team will receive the details on new voluntary programs today that will be made available to Chrysler salaried employees beginning in November. These new programs will be available to a broader group than before and will feature enhanced benefits, including both cash and new-vehicle vouchers. Your management will share all the program details with you in the next few days. I hope that every eligible employee takes time to seriously consider these enhanced offerings given the current environment. In addition, it will be necessary to have involuntary separation actions at the end of December, which is why the company is also issuing a WARN act notice today.

We need to work harder and more diligently to control every expense. To that end, we are eliminating in some cases, and cutting back on all discretionary and overhead expenses. Details of this initiative will be communicated through your leadership team. As an additional cost savings measure, we also will be reducing capital expenditures, but I assure you that we are protecting all major product programs.

As we re-size the company to reflect declines in volume, we know we must find new and more efficient ways to conduct our business operations. We recognize that in order to strengthen our competitive capability, and reduce the time and cost to achieve our objectives, we cannot operate as we have in the past. In the near future, we will be making organizational announcements as a result of restructuring actions reflecting the need to find new ways to operate, while still recognizing the importance of focusing on the customer, a relentless commitment to quality and investing in the programs that we need to compete in the marketplace.

I realize the appetite to know what the future holds for Chrysler is tremendous. Media speculation about our fate continues to be rampant. As a matter of company policy, Chrysler does not confirm or disclose the nature of its business meetings, in many cases to comply with legal requirements, as well as protect the integrity of our Company and those with whom we meet. When erroneous reports can be corrected with definitive answers, I support dealing with these issues in a clear and direct manner. I want to assure you that your leadership team is committed to communicating fully and directly to you if, and when, there is something to announce.

The Chrysler team has been through tremendous change over the years through the many ups and downs of this industry. During these tumultuous times, I encourage you to help each other to keep a sharp focus on the important tasks at hand.

Thank you for your continued dedication.

Bob