Copyright ©2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

JOHN YDSTIE, host: This is WEEKEND EDITION from NPR News. I'm John Ydstie.

The dollar has been falling relative to other currencies. That makes buying imported goods more expensive in the U.S. but it also means goods made here are more competitive on the world market.

NPR's Sonari Glinton reports, that's good news for U.S. manufacturers, especially the auto industry.

(SOUNDBITE OF VEHICLES)

SONARI GLINTON: If you want to know where the falling dollar makes a big difference, all you have to do is come to a car dealership. I'm at Victory Honda in Plymouth Michigan. And I'm going to talk to Michelle Krebs. She's an analyst with Edmunds.com

MICHELLE KREBS: (Analyst, Edmunds.com) The weak dollar is good for manufacturers in the U.S., whether they're the big three or German or whatever, because they can export at an advantage.

GLINTON: It makes the U.S. a good place to manufacture goods. That's after decades of manufacturing fleeing abroad.

KREBS: Well, I think it surprises that the U.S. is a good manufacturing base, because look at all the industries that we've lost. But the automobile manufacturing base is still very strong here, and, in fact, we're, attracting automakers from around the world to make cars in the United States.

GLINTON: Not only is the dollar weakening, currencies such as the Yen have been gaining strength, furthering the imbalance. BMW, Toyota, Subaru, Honda and others are expanding production in the U.S. Volkswagen just opened a plant in the Chattanooga this summer.

And Krebs says not only are BMW and Volkswagen building cars here to sell here, they're exporting cars from here.

KREBS: Even if the dollar shifts against other currencies, you're not going to just stop manufacturing because these are multi-billion dollar investments that they make. They've set up supplier networks and export logistics. So they're not just going to just tomorrow change that.

GLINTON: So that's probably a good thing, at least for the industry.

KREBS: Right, and it's for the long term; its good for American workers. It's good for the American economy, because all that money is generated here.

GREGORY DACO: Well, the bad thing about having a weak U.S. dollar is that import prices are more expensive.

GLINTON: Gregory Daco is an economist with IHS Global Insight.

DACO: I think that what we're seeing right now is that when you look back over the last, say, 30 years, the dollar is at a historically low level.

GLINTON: The lower the U.S. dollar, the lower the buying power for U.S. consumers. The more expensive those usually cheap imported products you get at your friendly neighborhood big box store. Also, that trip to Europe might not be so attractive now.

But Daco says, as the U.S. limps its way through a sluggish recovery, the economies in places like Brazil Russia India and China are still growing, and our products are getting more and more attractive to them.

DACO: Which is helping the U.S. economy because it's providing further source of demand, further source of revenue from these sales to foreigners.

GLINTON: Daco says as Americans confidence ebbs and flows, demand for U.S. good elsewhere in the world can keep the American economy going.

You could say that the dollar is one the last plugs that keeps the boat afloat.

Daco says he thinks that plug in the leaky boat will hold - for now at least.

Sonari Glinton, NPR News.

Copyright © 2011 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.