By CHRISSIE THOMPSON, AUTOMOTIVE NEWS
Chrysler will cancel its contract with Cummins Inc. for the light-duty diesel engine planned for the Dodge Ram 1500
Chrysler disclosed the termination as part of a group of supplier rejections filed Wednesday in U.S. Bankruptcy Court. The engine was originally scheduled for delivery in the 2010 model year.
Cummins had not expected the automaker, which emerged from Chapter 11 last week, to assume the agreement, said Mark Land, a spokesman for the engine maker.
"We're OK with it," Land said, adding the contract was signed in 2006. "Obviously a lot's changed in Chrysler's world and the world at large since then."
In January, Chrysler said it was delaying the introduction of the diesel light-duty Ram until at least 2011. Frank Klegon, then Chrysler's executive vice president of product development, cited stricter federal emissions standards and the high cost of diesel fuel in announcing the change.
Other supplier contracts targeted by Chrysler include those with ArvinMeritor Inc., Continental AG, Delphi Corp., Denso Corp., Lear Corp., Robert Bosch GmbH, Magna International Inc., TRW Automotive Inc. and Valeo SA.
Cummins has been talking with Chrysler for months about changes to the program and will continue to do so, Land said.
"That initial contract is dead, but the program itself is not dead," he said.
Chrysler spokesman Roger Benvenuti declined to comment on the future
"We're just starting up as a new company," he said. "It's too early to say what's going on."