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Dollar weakness: Strong euro threatens European industry

Posted April 24, 2008

Blogger’s Note: The record low exchange rate of the dollar against the euro and yen is seen as a harbinger of doom for the U.S. economy. It should be pointed out, however, that the global, export-driven economy favors two things: Cheap labor. And a cheap currency. Accordingly, European businesses consider the low dollar as a vital threat — not to the United States but to their own industrial base. Like the European air and space industry….

Baltimore — (TFN): Never before has the German space industry been so profitable. In 2007, industry revenues increased by 3.8% to 20.2 billion euros—700 million euros more than in the previous year. The heavily export-oriented air and space industry rode out the dollar weakness and the crisis of the industry giant Airbus.

Still, more and more companies intend to move out of Europe. Airbus-chief Thomas Enders, president of the Bundesverband der Luft- und Raumfahrtindustrie (BDLI), considers 640,000 jobs threatened all over Europe.

He blames the strong euro: “At an exchange rate of $1.50-1.60 per euro, the water is reaching the upper edge of our lower lips,” said Enders. For some companies, the weak dollar is an existential threat. They would have to reposition themselves internationally to survive. To secure the economic viability of Airbus, Enders did not exclude further job cuts within the restructuring program “Power8″. There are currently plans for the elimination of 10,000 jobs at the EADS subsidiary…

Depending on how good your German is, continue reading here…

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