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DaimlerChrysler puts brakes on plans for Georgia van plant

Thursday, July 10, 2003

ATLANTA -- DaimlerChrysler AG has postponed plans for a van factory that would create 3,300 jobs in coastal Georgia, but state officials said they are confident it will get built -- eventually.

Georgia officials had expected DaimlerChrysler's board of directors to meet Wednesday and approve the $754 million plant to be built on a 1,500-acre site in Pooler, 12 miles west of Savannah. It would manufacture Sprinter cargo vans.

"DaimlerChrysler will make the decision on the possible construction of a Sprinter factory in Savannah at a later point in time," said company spokesman Marc Binder in Stuttgart, Germany.

"The company will further review the economic conditions for the construction of another factory for making Dodge and Freightliner Sprinters."

The lackluster economy, excesses in capacity and slowing growth in the market probably weighed on DaimlerChrysler's decision not to commit to the facility, said Kevin Tynan, an analyst for Argus Research Corp.

Pooler Mayor Buddy Carter said he was optimistic a decision on the plant could still come soon. The site for what would be the state's largest factory is ideal because it's close to two interstate highways, a seaport and a railroad, he said.

Not unexpected"Obviously we're terribly disappointed in the delay, but it's not entirely unexpected. All you have to do is look at the economy," Carter said. "I'm still very confident, still optimistic -- we all are. DaimlerChrysler is going to proceed."

DaimlerChrysler has delayed making a decision on the plant since October, when former Gov. Roy Barnes announced during his re-election campaign that the company had already made its decision to build in Pooler. DaimlerChrysler never confirmed it would build the plant.

The company sent over two vans when Barnes made his announcement, but it wanted to wait before making the plans official, said Barnes' former chief of staff Bobby Kahn.

"The company was committed to the project and that location. The question was a matter of timing," he said. "(Barnes) was very confident about it. ... It was all contingent on the economy and other factors in the future."

It could take a while before the time is right for DaimlerChrysler add more workers and more costs, Tynan said.

"There's no rush to build it. Over the longer term, there's definite benefits and cost efficiencies of having a newer plant. It's not necessary to do immediately," Tynan said.

Gov. Sonny Perdue, who defeated Barnes in November, heard from DaimlerChrysler executives Wednesday that the plant was being postponed.

"This type of delay was not unexpected. Pooler is the location of choice, and we remain hopeful of a green-light decision this year," Perdue said.

AT A GLANCE

Some facts about the cost of the DaimlerChrysler van plant:

Georgia, which competed with sites near Charleston, S.C., and Jacksonville, Fla., has offered $320 million in incentives for the plant, amounting to $97,000 for each of the 3,300 jobs.

The incentives include $54 million in tax credits, $30 million for construction of a training center, $32 million for site preparation and $30 million for road improvements.

The state also spent $23 million to buy the site -- 1,500 acres at the crossroads of two interstates and just a few miles from Savannah's airport and shipping ports.


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