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EMPLOYEE FAQs

(U.S. Non-bargaining unit employees)
(Note: Chrysler reserves the right to amend, suspend or terminate all or any provision of its employee benefit plans and programs. )

General
1. Should Employees come to work tomorrow?
Yes, employees and contractors should continue to report to work, as scheduled, unless they have been specifically notified not to do so by the company. As part of the restructuring, all manufacturing operations will be temporarily idled effective Monday, May 4, 2009. Normal production schedules are expected to resume when the transaction is completed.

2. How will the recent announcement impact me?
All employees will transition to the new company. Your salary will be, at least initially, equal to your current base salary.
Under the proposed transaction with Fiat, employee benefits will initially be provided on terms no less favorable in the aggregate than the benefits provided under the current benefit plans.

3. What happens during the period after filing and before we transition to the new company?
Normal payroll practices will continue after the filing date. Benefits will generally continue for active employees without interruption, though the Company reserves the same right to amend or terminate benefit plans at any time that it had prior to the filing date.

4. Can I continue to charge my business expenses?
Yes. The approval process, guidelines and procedures regarding business expenses have not changed. You may continue to submit any qualified business expenses in accordance with company policy.

5. Where should employees go to get more information about the restructuring process?
Chrysler will provide regular updates via scoop.chrysler.com, Client Home, or by calling our restructuring information line at 1-877-271-1568 (United States and Canada) or +1-503-597-7708 (International).

6. How long do you anticipate plants to be idled?
Most manufacturing operations will be temporarily idled effective May 4. Normal production schedules will resume when the transaction is complete, which is anticipated within the next 30 to 60 days.
Compensation/Healthcare

7. What happens to my Retiree Health Care Account (RHCA)?
The RHCA is a qualified Voluntary Employees’ Beneficiary Association (VEBA), and your account assets are not subject to creditor claims. Your account balance will be available for reimbursement of qualified health care expenses in retirement.

8. Will severance and benefits be provided to those who lose their jobs going forward?
Under the proposed transaction with Fiat, severance benefits will initially be provided on terms that are no less than the severance benefits employees would have received under the current severance benefit plans.

9. Will paychecks still be delivered in the same way?
Yes. Employees who have previously elected EFT via Dashboard will not be affected. If you receive paper checks there could be a one or two day period in which checks may not be honored. For future pay elections, employees can continue to elect EFT via Dashboard to avoid any delays in pay, however, an EFT election today cannot take effect until at least the next pay cycle.

10. If I’m laid off after the filing will I get a check for the period from my last paycheck immediately before filing through the time I was let go?
Court approval will be sought to pay for this time worked.

11. What is the status of our money in dependent care and health care savings programs – is it safe?
The funds in these plans are not subject to creditor claims and remain available for you under the terms of the applicable plans.
Retirement/401(k)

12. What happened to Daimler’s commitment to provide a $1 billion guarantee if the pension plans are terminated?
As announced on April 27, Daimler reached an agreement on its separation from Chrysler where it has agreed to pay $200 million into Chrysler’s pension plans on the date of the execution of a definitive agreement, and in each of the next two years, for a total contribution of $600 million. The existing pension guarantee of $1 billion to the PBGC will be reduced to an amount of $200 million and remain in place until August 2012.

13. Are Chrysler’s pension plans protected from creditor claims in Bankruptcy proceedings?
Yes. Federal law protects the funds in qualified pension plans from creditor claims.

14. Will the Chrysler qualified pension plans be assumed by the new company?
Under the proposed transaction with Fiat, Chrysler’s qualified pension plans will be assumed by the new company.

15. What happens if the defined benefit pension plans are terminated?
In the event a plan is terminated it will be administered by the Pension Benefit Guaranty Corporation, which is an independent agency chartered under federal law. For more information about the PBGC insurance protection and its limitations, you may visit Pension Benefit Guaranty Corporation (PBGC).

16. What will happen to the accounts of employees in the 401(k) plan?
The assets in all 401(k) plans are completely separate from Chrysler and are held in a trust administered by Merrill Lynch. These funds are protected from the claims of the Company’s creditors.

17. Now that Chrysler has filed for bankruptcy can I withdraw my 401(k) assets in a lump sum?
Regular plan terms and IRS regulations still apply to all 401(k) distributions. Please contact a financial advisor for more information regarding your particular situation.

18. Are employees still responsible for any loan payments they have related to their 401(k) plans?
Yes. At present, the normal terms of the plan remain in place.

19. May I continue to make deferral contributions and “catch-up” contributions (pre-tax contributions if age 50 or more), if applicable, to my 401(k) plan?
Yes. If you continue in the employ of Chrysler, you will be allowed to continue to contribute to the 401(k) savings plan to the extent allowed by the plan and IRS regulations.

20. Will I still be eligible to receive my 401(k) Company Match allocation?
Amounts previously deposited into your 401(k) savings account under the Company Match program are vested and available for distribution in accordance with regular plan terms and IRS regulations. Please contact a financial advisor for more information regarding your particular situation.

21. Are there any non-vested assets in the 401(k)? How are they affected?
No, all 401(k) funds vest immediately.

22. Am I still entitled to amounts contributed to the “New Hire” Employee Managed Retirement Plan)?
Yes, the Employee Managed Retirement Plan is a qualified pension plan whose assets are protected from creditor claims. Vested amounts are available to plan participants in accordance with plan provisions. For further information please contact Merrill Lynch at 1-800-483-7283 or via web at http://www.benefits.ml.com/
Supplemental Workers

23. How are contract workers affected? Should they come to work?
Contract workers should come to work unless instructed to do otherwise. For specific questions, contract workers should contact their contract firm.
Locations outside of the U.S.

24. How are expatriate employees impacted?
Expatriate employees should continue to report to work, as scheduled, unless they have been specifically notified not to do so by the company.

25. Will plants in Canada/Mexico/outside U.S. be impacted?
All plants will be idled. However, our Canadian and Mexican subsidiaries did not file for bankruptcy.

Retiree Questions

26. Are Chrysler’s pension plans protected from creditors’ claims in the bankruptcy proceedings?
Yes. Federal law protects the funds in qualified pension plans from creditor claims.

27. Will anything happen to Chrysler pension plans as a result of the bankruptcy?
Chrysler’s pension plans are governed under the provisions of the Employee Retirement Income Security Act (ERISA). Under the proposed transaction with Fiat, Chrysler’s qualified pension plans will be assumed by New Chrysler.

28. Will there be any impact on retiree medical benefits as a result of the bankruptcy filing?
While no immediate changes to retiree medical benefits have been made, benefits may change in the normal course of business and in accordance with bankruptcy laws as Chrysler reserves the right to amend, suspend or terminate all or any provisions of its employee benefit plans and programs. As always, if any changes are planned in the future, there will be information provided at that time.

29. What happens if the defined benefit pension plans are terminated?
No decision has been made to terminate the defined benefit pension plans. In the event a qualified plan is terminated, it will be administered by the Pension Benefit Guaranty Corporation, which is an independent agency chartered under federal law. For more information about the PBGC insurance protections and its limitations, you may visit ww.pbgc.gov.

30. As a retiree, what will happen to my monthly PTD disability or survivor benefits?
While no immediate changes to your monthly PTD or survivor benefits have been made, benefits may change in the normal course of business as Chrysler reserves the right to amend, suspend or terminate all or any provisions of its employee benefit plans and programs. As always, if any changes are planned in the future, there will be information provided at that time.

31. What will happen to the accounts of employees in the 401(k) plan?
The assets in all 401(k) plans are completely separate from Chrysler and are held in a trust administered by Merrill Lynch. These funds are protected from the claims of the Company’s creditors.

32. Now that the Company has filed for Bankruptcy, can I withdraw my 401(k)/Pension assets in a lump sum?
Regular plan terms and IRS regulation still apply to all distributions. Please contact a financial advisor for more information regarding your particular situation.

33. Will I still be eligible to receive my 401(k) Company Match allocation?
Amounts previously deposited into your 401k savings account under the “Company Match” program are vested and available for distribution in accordance with regular plan terms and IRS regulations. Please contact a financial advisor for more information regarding your particular situation.

34. Am I still entitled to amounts contributed to the 401(k) retirement plan (Employee Managed Retirement Plan)?
Yes, the Employee Managed Retirement Plan is a qualified pension plan whose assets are protected from creditor claims. Vested amounts are available to plan participants in accordance with plan provisions. The vesting schedule remains and is not impacted by filing for chapter 11. For further information please contact Merrill Lynch at 800-483-7283 or via web at http://www.benefits.ml.com

35. Are employees still responsible for any loan payments they have related to their 401(k) Plans? Yes. At present, the normal terms of the plan remain in place.

36. I have been collecting layoff benefits. Will that change? For employees laid off prior to the filing date, the lay-off payments will stop as of the filing date.

37. Where should retirees go to get more information?
We will continue to provide updates as appropriate through our regular channels of communication. In addition, please visit Chrysler Retiree Web Site for updates.
Company Cars

38. What should I do with my Chrysler Employee/Retiree Lease vehicle?
For now, your lease arrangement will continue.
Chrysler has an agreement with outside entities that own the vehicles that Chrysler employees and retirees drive as lease vehicles. For now, Chrysler will continue to collect payments from your pay, pension check or other method, and will forward the appropriate amount to the outside entity.
As has been previously communicated, the lease program had already been scheduled to end later this year.
In the meantime, Chrysler continues to offer very favorable terms for purchase of new vehicles under the Employee Advantage Plan (Dashboard Anywhere/Cars & Trucks channel). Also, in partnership with Chrysler, Met Life and the Sterling Insurance Agency offer competitive group insurance rates for auto and other coverage (Dashboard Anywhere/Pay & Benefits channel/Optional Insurance).
 
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