DaimlerChrysler (DC) on Tuesday said it was scrapping plans to open a new assembly plant in the state of Georgia to build its [Mercedes-Benz-designed] Sprinter commercial vans, Reuters reported.

Reuters noted that DC, which is struggling to nurse its US-based Chrysler unit back to profitability after a $US1.1 billion second-quarter loss, had been delaying construction work on the planned manufacturing facility near Savannah, Georgia, since July.

According to the news agency, state officials had said the $US750 million facility, the largest industrial plant ever to locate in Georgia, was expected to bring at least 3,000 sorely needed jobs to Pooler, a small town outside Savannah, by 2005.

But company spokesmen, citing currency issues and flagging vehicle demand among other issues, told Reuters a business case could not be made for building the plant at this time.

“Right now really all we’re saying is that it’s not going forward. We’re always looking at the market but at this stage of the game it’s not going forward,” a DaimlerChrysler spokesman told the news agency.

Reuters said the plant was to have manufactured the Dodge version of the Sprinter, a boxy, diesel-engined commercial van currently manufactured in Germany.

The cargo and passenger versions, also sold in the US as part of DC’s Freightliner range, are made in Dusseldorf, Germany. Passenger versions are shipped fully assembled while the cargo vans are sent in kit form for assembly in Gaffney, South Carolina.

DaimlerChrysler has previously held high hopes for the Sprinter in the US. In July last year, Bloomberg News reported that DC’s commercial van division would sell the line in the US under the Dodge name, at 2,937 dealers, from the first half of 2003 but planned to keep selling the vans under the Freightliner name in the US to the end of 2006.

Bloomberg noted at the time that DC was trying to share parts, brands and resources among its Mercedes-Benz, Chrysler and Freightliner units and that the Sprinter, used by customers including United Parcel Service, would replace the Dodge Ram van that Chrysler was scheduled to stop building in 2003. Bloomberg News also said last July that all North American versions of the Sprinter would be badged Dodge after 2006.

According to Tuesday’s Reuters report, Hale said the dollar’s weakness was one factor working against the plant as many of the van’s components would have been imported from Europe.