Chrysler’s future Phoenix V6 engine has been speculated on for the past several years and now as the company is the midst of merger talks there have been claims that the $3 billion engine project may have been shelved.

The Phoenix V6 was touted to be a world class engine designed for Chrysler’s entire portfolio of brands, including its Jeep SUVs, Chrysler sedans and minivans, and Dodge pickup trucks. Some of its planned features included direct-injection and cylinder-deactivation technologies as well as variable valve timing.

A recent report claimed that workers at one of the plants scheduled to build the engine had been told the project was canned. However, Chrysler vice president Jim Press has confirmed to Reuters that the Phoenix V6 is alive and kicking and that testing of it is well underway.

"The Phoenix engine program is going forward full steam," Press told reporters. "It's a great engine. We're driving the prototypes today."

Chrysler announced development plans for the Phoenix on the cusp of its acquisition by Cerberus Capital Management. With reports of a merger with either General Motors or Renault-Nissan, both of which already build world-class V6 engines, there is now good reason for Chrysler to suspend its own plans for a new V6. Already having canceled plans for a new dual-clutch transmission, there remains a strong chance that the expensive Phoenix project could be disbanded as well.