This could be a problem. If the dollar stays low then you will see Mercedes pushing their SUVs more than anything else in America. I think the German plant workers would threaten Daimler if they tried to cut production there and move jobs here. Get ready for a Mercedes CUV/ SUV onslaught

Currency exchange rates run in cycles. By the time they get a C-class production plant built in North America, the dollar will be rebalanced against the Euro.

MB’s real problem is worsening build quality and brand dilution, and building Cs or Es in South Carolina won’t fix that. If the cars were still percieved as highest quality in their class they could charge anything they wanted.

Better SUV/CUV then Tigers and Leopards. That would be bad.

South Carolina? Are they looking here to build another plant? Thought their M-class vehicles were being produced in Alabama. Perhaps you’re confused with BMW’s Spartanburg plant.

I can’t wait for when the Euro/Dollar are rebalanced. I remember 6-7 years ago being able to buy cycling goods from the UK for dirt cheap. Certainly not now!

benefits of a drooping dollar, I suppose.

Time frame is everything. The US dollar could drop another 25 to 30% from here when all is said and done. Shifting production should have already been done by many manufacturers to have had the benefit of a falling dollar since 2001.

I don’t think 6-7 years ago coming back anytime soon. I remember those days fondly – Ilived in Europe for a bit and was making USD salary: life was grand.
I don’t believe dollar has room to drop 25 to 30%, although I’ve been wrong before (especially 6-7 years ago). It should come up to 1.20 – 1.25/Euro. But our economy is definitely beneficiary of a week USD at the expense of Euro.

I can see some factors pressuring the dollar to go weaker, but it is pretty weak right now and that is starting some grumblings abroad by primirily European companies that are strongly feeling competitive pain in the largest single consumer market. On the other hand, the major currencies that have appreciated against the dollar are european (Euro, Pound, Swiss Franc, …), the Canadian Dollar, and the Aussie Dollar. The Canadians are not exactly beneficiaries of a strong CND$ because a lot of their trade with the USA is US$-denominated, so there may be a bit of a pinch there in the long run depending on how long term they are hedged. Other major partners (China and Japan) are more in line with past exchange rates and so it does not hit them much.

Investment in plant is a very long cycle (multi-year) – it does not happen overnight – but for European companies to sink money here now makes a bit of sense. The central banks will intervene if the US$ slips much more because too much of global commerce and banking depends on a decent US$, so property and equipment is not likely to get a lot cheaper in strong local currencies. Add to that there is some mounting inflationary pressure in the USA which could push things up. 5 or 6 years ago the dollar was actually far over-valued (like the Euro today) so comparing it to then is not really fair, and as Autonut said a Euro rate of around 1.2 is about normal (although I peg it more at about 1.10 – 1.15, not much different).

Right now I’m actually a bit more concerned about Europe than the USA because friends there are grumbling about operations moving to lower cost countries, and it’s not like the major Euro economies are that strong to begin with. There is definitely good and bad to a strong currency, as well as a weak currency.

I could spout hours’ worth of reading about the continued collapse of the US dollar. And I really have no interest trying to convince any of you beyond giving you the knowledge that it will fall at least another 20% from here over the next several years. Do what you will with this knowledge.

There is no way a country can continue running the way the US has been forever without being punished. Triple deficits of budget, current account and trade will CONTINUE to crush the value of the dollar. Now that corporate earnings will drop with a slowing economy, where will the country go to help finance its ‘business’?

NOBODY IN THE WORLD WANTS ANYTHING TO DO WITH A FAILING COUNTRY AND ITS WORTHLESS CURRENCY … .50s USDX WILL COME … MARK MY WORDS … IF WE’RE ALL STILL AROUND WHEN IT HAPPENS YOU CAN THANK ME FOR WARNING YOU.

Gotta love those haters! Without them, what can we chuckle at?

Don’t know who you’re referring to as haters, ‘Head-giver’ but the only ones who don’t know the party’s over are those living in ignorance. As of 2001, how much has the average American lost in net worth relative to the rest of the civilized world? Where is the current account deficit going when corporate profits fall and tax revenues plummet? Who is buying t-bills as the I.O.U. it represents plummets in value?

FACTS. But I don’t expect you monkeys here to learn anything.

why is everyone hating on the US… It seem as if the country is interdependent especially EU. They really don’t make any thing more than a couple of cell phones, some over priced cars and some pissed off frogs.

Now England thats a country to respect. Plus all currencies are based on speculation, such as oil. So there may be some basis for your dollar projection, but the US won’t be at war forever….