16 September 1998

Detroit Diesel Corporation (DDC) announced it is increasing production capacity of its Series 60 heavy-duty engine at its Redford, Michigan manufacturing facility in response to record sales orders. The capacity increase will be achieved through the elimination of bottleneck operations and the addition of a second shift on the Company's new Series 60 north assembly line.

The Series 60 engine, which is used in an expanding array of global markets, including heavy-duty truck, off-highway and marine applications, will have a production capacity of 300 engines per day following the production increase. The capacity increase will be available beginning in the fourth quarter of 1998.

DDC indicated that its discussions with the US Environmental Protection Agency (EPA), the US Department of Justice and the California Air Resources Board to address NOx emissions from heavy-duty diesel engines under certain driving conditions are continuing. DDC believes its engines are in compliance with EPA emissions standards. However, the company works with industry and the government to resolve the NOx emissions issues. DDC indicated that an agreement could be reached but is likely to have a material impact on financial results of the company.

Source: DDC