Redemption of financing of Chrysler Jeep Wrangler car body manufacturing by KUKA

KUKA AG has reached agreement with Chrysler LLC and the financing banks regarding the prepayment of the financing of the Chrysler Jeep Wrangler car body manufacturing

February 29, 2008

The financing will be prepaid using the KUKA Group's existing net liquidity. Our American subsidiary, KUKA Toledo Production Operations LLC (KTPO), will purchase the buildings and production systems. The purchase will result in an increase in assets and a decrease in net liquidity of about EUR 85 million.

KTPO has been building Jeep Wrangler car bodies at the Chrysler factory site in Toledo, Ohio, since July 2006. The chassis assembly system and paint shop, which are also operated by third parties, are located in this supplier park as well. KTPO has about 250 employees, who were involved in building more than 155,000 car bodies over the course of the 2007 financial year. KTPO production output and earnings were considerably higher than expected in 2007.

The production facility was designed and constructed by the Detroit-based American systems builder KUKA Systems North America Corp. The manufacturing system employs 240 KUKA robots. The company's contract with Chrysler calls for the manufacture of Jeep Wrangler car bodies, with two seven-year terms until the year 2020.

Another option would have been the purchase of the assets by Chrysler. But in this case Chrysler would also have taken over the operation of the plant and KUKA would have had to forfeit
significant EBIT and cash flow contributions. KUKA itself therefore decided to prepay the financing.

The prepayment of the financing by KTPO supports the expansion of the North American business for both KUKA Systems and KUKA Robotics. Operating a flexible production system is a core competence for the automotive industry and other manufacturing sectors. We not only expect the major American carmakers to continue investing in new models and production systems, but also that European manufacturers will construct new plants or expand their existing manufacturing facilities in North America over the course of the next few years.

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