Some Cleveland Firms Buoyed By Dollar Drop The decline in the dollar's value is helping some small businesses in Cleveland that compete with companies that sell in euros.
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Some Cleveland Firms Buoyed By Dollar Drop

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Some Cleveland Firms Buoyed By Dollar Drop

Some Cleveland Firms Buoyed By Dollar Drop

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And I'm Renee Montagne. We've been looking at how global economic trends are affecting towns across the U.S. It's part of an occasional series that we call The Money Map. Today's stop is Cleveland, Ohio, where some old-line manufacturers say that the falling dollar and rising oil costs are actually helping business. Mhari Saito at member station WCPN has been talking to small manufacturers around Cleveland. And Mhari joins us now to guide us through some of those conversations.

The manufacturers who are benefiting, what are they making?

MHARI SAITO: Renee, these manufacturers are making everything from solar panels to very specialized industrial parts. Here in this part of the country, we have hundreds of these 50- to 200-person shops that make these kind of parts on contract for larger, big-name manufacturers.

I talked to one Cleveland company, Superior Products Inc., which makes gas fittings - valves for oxygen tanks and things like that. The company's CEO, Don Mottinger, showed me around his factory. He told me he's been busy recently, responding to new demand from overseas customers.

Mr. DON MOTTINGER (CEO, Superior Products Incorporated): You wouldn't have seen a lot of these products before. This is a group that does all kinds of manifolds and pig tails. These handle 12,000 pounds of pressure.

SAITO: The steady fall in the U.S. dollar means that Superior Products' valves are now significantly cheaper than many of those sold by its foreign competitors. And even though the company now pays 40 percent more for the raw materials it uses to make its products, company vice president Greg Gens says they're still having a good year.

Mr. GREG GENS (Vice president, Superior Products Incorporated): When we go overseas now, a dollar-denominated price is something that's much more competitive if you're competing against companies that are selling in euros, for instance. So that there's an advantage as we set up and try to get product into Europe or into Southeast Asia.

SAITO: You know, Renee, other manufacturers are reporting similar gains. Miles Free represents 500 U.S manufacturers at the Precision Machined Products Association. He says last year, the automotive industry made up nearly 20 percent of his members' sales. But even though car makers are now slashing jobs, his manufacturers' total sales are down only about 3 percent from last year.

Mr. MILES FREE (Precision Machined Products Association): A lot of our industry's customers are finding that there's not a real savings by going overseas. So some parts are coming back. Some assemblies are coming back, and we're getting some new jobs as well.

MONTAGNE: We're talking to reporter Mhari Saito, who's been visiting manufacturers in the Cleveland area.

And, Mhari, we're talking here a lot about the falling dollar. But I also mentioned at the top there that higher oil prices figure in all of this. How do higher oil prices help manufacturers where you are?

SAITO: What's happening is that the rising price of oil is increasing the cost of shipping cheaply made products across the ocean. And so companies here in northeast Ohio are starting to rethink bringing the stuff in from overseas. So we have the possibility, and we're starting to hear about orders and jobs being brought back to this region.

MONTAGNE: So, Mhari, has this translated into cash yet?

SAITO: Actually, because it can take a while for companies to find and formalize new trading relationships, executives say it could take a year or two before we really see these orders impacting earnings statements. That said, Ohio has seen its exports to Europe rise more than 50 percent since 2002. That was a point at which the dollar peaked in value.

MONTAGNE: And then, as you've just suggested, currency markets can be pretty volatile. They go down, but they also go back up. What does this mean long term for these industries?

SAITO: Right. And that's a concern some experts have. You know, right now, the drop in the dollar means that in Europe, American products enjoy a nearly 40 percent discount from European competitors. If the dollar were to regain value, that discount would be erased.

The other concern that U.S. manufacturers have here is that they say they're having difficulty finding highly skilled workers. And that's pretty surprising, actually, considering that Ohio has lost tens of thousands of manufacturing jobs in the past few decades.

MONTAGNE: That's reporter Mhari Saito. Her point on The Money Map is Cleveland, Ohio.

Thanks very much.

SAITO: Thank you, Renee.

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