What would be wrong with that?

Euro vs. Dollar: More factories may be U.S.-bound


How's this for a wake-up call on the state of the dollar: "If the dollar keeps slumping against the euro, the United States could become the next Mexico -- a low-cost manufacturing haven for European automakers and suppliers." With the dollar at $1.38 to the euro as of now, and expecting to drop further, European makes either need to raise prices, move production to "cheaper" countries like the US, become more efficient, or be happy with less profits. Fewer euros in the till isn't really an option, and price wars are already difficult enough to navigate. That leaves relocation or finding cost efficiencies in other markets.

Comment: That's the way the Balance of Trade and Exchange Rate are supposed to work! I remember the fanfare leading up to VW building its first plant in Westmoreland Co, PA ... and the pain when it closed and jobs were lost!

Excerpt: (Time machine ... way back to 1987!):

At its peak in the early '80s, Westmoreland employed 6,000 on two shifts. But VW says the plant has run at less than half capacity for more than five years. Other sources estimate it was at 28% of capacity when the closing was announced.

More than 1.5-million VW cars have rolled from the plant since it opened in 1978 with hoopla and a precedent-setting contract with the UAW. The Big Three domestic automakers complained at the time that the agreement gave the newcomer a significant cost advantage because of hourly rates that were initially lower.

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