USA: Overvalued greenback hurting parts makers, association claims
"MEMA's members " who make motor vehicle components " are among the growing number of U.S. manufacturers affected by the growing burden of an overvalued dollar," said president and CEO Chris Bates.
MEMA has joined the National Association of Manufacturers (NAM) and other manufacturing associations to ask U.S. treasury secretary Paul O'Neill to make it clear that the dollar's value should be consistent with economic reality and market conditions.
In a letter to O'Neil, the associations note that the dollar has appreciated in value by 27 percent since early 1997. They claim that, in addition to the automotive sector, other manufacturing industries such as aircraft, paper and forest products, machine tools, medical equipment, steel and other capital goods are being significantly affected.
"No amount of cost cutting on our members' part can offset a nearly 30 percent dollar mark-up," Bates said.
"The associations are calling on the Treasury for a commitment to further reductions in interest rates and to cooperating in exchange markets as appropriate," Bates said.
"In addition, the Treasury should not condone currency manipulation by
U.S. trading partners seeking to make their exports more competitive."
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