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Chrysler Cancels Light-Duty Diesel Contract with Cummins

June 25, 2009

Cummins is in talks with Chrysler to make light-duty diesel engines for the automaker, reports the Associated Press. 

As part of its bankruptcy proceedings, Chrysler canceled the contract it previously had with Cummins. However, now that most of Chrysler's assets were sold to Fiat Group SpA, Cummins believes it can negotiate a deal with the new company. 

Despite the contract cancellation for light-duty diesel trucks, Cummins still makes engines for heavy-duty Dodge Ram pickup trucks. The plant that produces those engines closed in May; however, once Chrysler resumes truck production, the plant is expected to reopen. 

The plant that makes engines for light-duty trucks is separate from heavy-duty engine plant. Production has been slowed until the contract situation has been clarified, according to AP.

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