Chrysler cancels Cummins diesel for Ram

Chrysler is canceling its contract with Cummins Inc. for a light-duty diesel engine for the Ram 1500 pickup originally scheduled for the 2010 model year. The notice came today as the automaker filed a group of supplier rejections with the U.S. Bankruptcy Court.

Mark Land, a spokesman for Cummins, said the action was expected.

“We’re okay with it. Obviously a lot’s changed in Chrysler’s world and the world at large…”

A recently as January, Chrysler had said it was delaying the diesel’s debut until 2011 because of tougher emissions standards and the relatively high cost of diesel fuel. The two companies have been talking since then and will continue discussions. Land noted the original contract was dead but the program is not. Chrysler spokesman Roger Benvenuti declined to comment on the subject.

Chrysler also asked to be allowed to dump contracts with ArvinMeritor, Delphi, Continental AG, Denso, Lear, Bosch, Magna, TRW and Valeo SA.