Don’t mistake a booming global economy for a weak currency. I still believe that the dollar is not falling, rather, other currencies are rising and that will help us in the long run.
The euro’s seemingly inexorable drive toward the $1.50 mark may have slowed down for now, but companies in Europe seem to have sped up their search for strategies in dealing with the newly weak dollar. European jet-maker Airbus and auto manufacturer Volkswagen both have decided on a solution: The two companies are actively looking into building factories in the United States.
According to a report in the Monday edition of the Munich daily Süddeutsche Zeitung, Airbus is looking into building a final assembly plant in Mobile, Alabama. The prerequisite for such a move, the paper reports, is a contract for 180 refueling aircraft the United States Air Force has tendered. Airbus is competing against Boeing for the sale, and a final decision won’t be made until the beginning of next year. Airbus is targeting the relatively poor state of Alabama in an effort to win political support for its bid.
Meanwhile, Volkswagen is also looking to build a factory in North America in order to minimize the hit it might take should the euro remain strong. “Our scouts are looking intensively for possible sites in the US and Mexico,” Jochen Heizmann, VW’s head of production, told the industry weekly Automobilwoche over the weekend. He said the company needed to develop production capacity outside the euro zone.
The move had been hinted at in mid-November by the head of Volkswagen of America, Stefan Jacoby. He said that the factory would likely be built in the Eastern Time Zone to facilitate communications with the mother ship in Germany, but no concrete plans have been mentioned. Jacoby said at the November Los Angeles Auto Show that an announcement on a North American factory would be made within the next six months.
