Update #1 March-12-2010 09:29 PDT:
Ram spokesman Dave Elshoff said that even though Old Chrysler's light-duty diesel contract with Cummins was voided last year, it's incorrect to say that discussions between the two companies have been restarted. Elshoff said talks continued throughout Chrysler's bankruptcy proceedings and transition to the new Chrysler Group, LLC organization. I've updated the headline to reflect this.
Chrysler is talking with Cummins to continue development of an all-new light-duty diesel engine for Ram pickup trucks.
“We’re in discussions with Cummins,” said Joe Veltri, Chrysler vice president of product planning, at the 2010 NTEA Work Truck Show. “There’s no contract [with Cummins] but [a light-duty diesel] is in our plan.”
Chrysler’s light-duty diesel program — rumored to be a 5.0-liter V-8 — has a complex past. In January 2009, we were told the program was postponed until at least 2011. Then in June 2009, a light-duty diesel engine development and manufacturing contract with Cummins was voided as part of Chrysler's Chapter 11 bankruptcy restructuring.
Under Chapter 11, Chrysler's assets and liabilities were assigned to two entities: Old Chrysler and New Chrysler. New Chrysler, which partnered with Fiat after emerging from bankruptcy and becoming today’s Chrysler Group LLC, did not assume the light-duty diesel contract, leaving it with the Old Chrysler.
But things appear to be getting back on track.
Veltri said the new oil burner could find a home in both light- and heavy-duty Ram pickups. Cummins has been supplying its diesel engines for Dodge Ram heavy-duty pickups since 1989. Today’s Ram HD Cummins diesel is a 6.7-liter six-cylinder.
“Think about, ‘Could I also put it into a three-quarter-ton truck? Does every guy need a 6.7-liter diesel?’ It could certainly package in a heavy duty,” Veltri said. Both the light-duty diesel and 6.7-liter engine would be offered together in that scenario.
Smaller displacement would mean better fuel economy in both light- and heavy-duty applications, Veltri said.
Chrysler would be unique in the full-size truck segment if it can deliver a light-duty diesel for its customers. GM, Ford and Toyota have indefinitely postponed development of similar programs, citing high engine costs and gasoline engine alternatives.
Veltri agrees that pricing is a challenge, but truck buyers are very familiar with diesel engines.
“The customer really understands diesel technology. The challenge is cost,” Veltri said. “You need to be able to demonstrate to the customer that there’s a benefit. If I can demonstrate lower maintenance costs and [higher] resale value, I can demonstrate a business case. You’re paying for [the diesel] up front. You’re not going to get it back until you sell it.”
A light-duty diesel could also be a quick way for Chrysler to develop fuel-efficient full-size pickups in time to meet aggressive new fuel economy standards that will be phased in between now and 2016. Diesels are up to 30 percent more efficient than gas engines.