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June 18, 2009

Cummins negotiating new Chrysler deal


Cummins has slowed the retooling of the main engine plant in Columbus as bankrupt Chrysler renegotiates a diesel supply contract, Cummins spokesman Mark Land said today.

Cummins had been equipping the plant near downtown Columbus with machines to make a new light-duty diesel ordered by Chrysler and Nissan.

On late Wednesday, Chrysler filed papers in U.S. Bankruptcy Court to reject the contract for the light-duty diesel.

Cummins executives expected the move by Chrysler and had been negotiating a new supply contract for the light engine, Land said.

Cummins expects Chrysler will purchase the diesels for light-duty trucks scheduled to reach dealers in 2010 or 2011, Land said.

Chrysler’s contract remains in place for the 6-liter diesel produced in Cummins’ Walesboro plant for the Dodge Ram pickup truck.

The Walesboro plant has been closed since Chrysler suspended vehicle production throughout North America following its April 30 bankruptcy filing.

Chrysler is presently merging with Italian automaker Fiat.

LINK:Cummins negotiating new Chrysler deal | IndyStar.com | The Indianapolis Star
 

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Cummins loses important Chrysler contract

Cummins loses important Chrysler contract
Thu. June 18 - 2009

Columbus-based Cummins Inc. has lost a major contract to produce diesel engines for a new line of pickup trucks for Chrysler, the Cleveland Plain Dealer reported today.


Cummins anticipated producing the engines for the automaker’s Dodge Ram 1500 line starting next year, but Chrysler canceled the contract as part of its bankruptcy reorganization and upcoming acquisition by Italy’s Fiat, according to court papers filed today.

Cummins hasn’t disclosed how much the contract was worth, but the company had expected to reopen a plant in Columbus and make $250 million in upgrades, the newspaper said.

The company announced in 2007 that it would develop the new light-duty diesel engine for Dodge and other customers. Chrysler said in January that it would delay introduction of the 1500 Ram pickup with Cummins' new engine until 2011.


Cummins spokesman Mark Land told the Plain Dealer that the cancellation was expected. The companies have been renegotiating with the new Chrysler group, and the engine could still make it into Dodge vehicles, he said.


Last month, Land told IBJ, "We also have other customers for that engine." Cummins previously announced a deal with Nissan, and Land said the company is working on others.

Chrysler’s ongoing struggles have been bad news for Cummins. Cummins announced May 7 that it would temporarily close its Columbus MidRange Engine Plant and idle at least 610 workers as a result of the automaker’s reorganization.

The plant in Walesboro, just south of Columbus, is the sole manufacturer for the 6.7-liter turbo diesel engine used in the heavy-duty Dodge Ram pickup truck. The facility closed May 15.

"The engines we produce for Chrysler make up virtually all the demand at CMEP, and without the Chrysler production it is not economically feasible to operate the plant," Jim Kelly, president of Cummins' Engine Business unit, said in a written statement to IBJ at the time of the closing.

Chrysler said in its bankruptcy filing late last month that it owed Cummins $43.9 million, placing Cummins among its top unsecured creditors.

Cummins expects some of that money will be covered by the U.S. Treasury Department's new Supplier Support Program, which the company entered earlier this month.

Sales for the Dodge Ram declined throughout 2008. Cummins shipped more than 66,000 heavy-duty engines for the Ram last year, compared with about 170,000 in 2006.

Article:ibj.com Indianapolis Business Journal Cummins loses important Chrysler contract
 

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No Ram 1500 diesel!

Chrysler drops plans to build diesel-powered pickups
Saturday, June 20, 2009


If you were expecting to buy a diesel-powered light pickup within the next year or two, it's time to give up.

Chrysler, the last company that had plans to offer such a truck, filed papers to cancel its contract with Cummins Inc. that called for the Indiana company to produce engines for its Dodge Ram 1500 line starting next year.


The contract was one of a large group of supplier deals that Chrysler filed to cancel in bankruptcy court late Wednesday.

Popular in heavy-duty pickups, diesel engines provide as much as a 30 percent boost to fuel economy while offering the towing and hauling power that pickup owners seek. On the down side, they're more expensive that gasoline engines, adding as much as $8,000 to a vehicle's sticker price.

Chrysler's plans follow recent announcements by Ford Motor Co. and General Motors, both companies that had also planned light-duty diesels. Toyota Motor Co. and Nissan Motor Co. have also backed away from plans to make heavy-duty trucks featuring diesel engines, said Paul Lacy, an analyst with IHS Global Insight in Detroit.

"From a business case, I don't think anyone can make one right now," Lacy said.

Cummins spokesman Mark Land said the company had been expecting the contract cancellation because of the poor state of the auto industry and Chrysler's bankruptcy.

While they are abandoning light diesels for now, automakers are working on other fuel-saving technologies for trucks.

GM is pushing hybrid systems for trucks, and Ford next year will offer a Brook Park-made EcoBoost engine in its F-150. The EcoBoost is a 3.5-liter V-6 engine that uses turbocharging and direct fuel injection to increase power. Ford expects the V-6 to offer the power of its V-8 truck engines while using less fuel.

Lacy said he does expect the diesel engines to make their ways to U.S. streets eventually. New fuel economy regulations call for massive increases in efficiency by 2016, and automakers will have to offer some diesels by then if they want to continue offering pickups, he said.

"I don't think they're forever gone. I don't think they'll just throw all of this investment money away," Lacy said. He added that he expects to see most of the engines in trucks by the 2016 model year.

Land agreed, saying Cummins has high hopes for diesel in consumer vehicles in the long term.

"Especially with the new [federal] standards, diesel will play a big part" of the future, Land said.

Article:Chrysler drops plans to build diesel-powered pickups - Cleveland.com
 

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Dodge Ram Engine Production Restarts!

July 3, 2009

Cummins recalling 400 workers


COLUMBUS, Ind. -- Cummins Inc. is recalling 400 laid-off workers as it resumes production of the Dodge Ram engine at a central Indiana factory.

The company shut down its Columbus MidRange Engine Plant and laid off 720 employees in May after Chrysler stopped vehicle production during its bankruptcy proceedings. Cummins plans to restart the plant with one shift beginning July 13.

Cummins spokesman Mark Land says the plant will produce engines for the 2009 model Ram through mid-August, but that the plant would be idled again until Chrysler starts building the truck's 2010 model. He said that workers were expected to be called back again in October.

Land says Cummins has "solid commitments" from Chrysler for the 2010 Dodge Ram.

LINK:Cummins recalling 400 workers | IndyStar.com | The Indianapolis Star
 
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