Strong Dollar Hurting Auto Parts Suppliers

Autoparts Report, June 18, 2001

The U.S. dollar's current high exchange value is having a negative impact on manufacturing exports, production and employment, according to the Motor & Equipment Manufacturers Association (MEMA). "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 Chris Bates, MEMA president and CEO.

MEMA has joined the National Association of Manufacturers (NAM) and other manufacturing associations in asking 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 Secretary O'Neil, the associations note that the dollar has appreciated by 27 percent since early 1997. In addition to the automotive sector, manufacturing industries such as aircraft, paper and forest products, machine tools, medical equipment steel and other capital goods as well as consumer goods producers are being significantly affected. "No amount of cost cutting on our members' part can offset a nearly 30 percent dollar markup," Bates said.

Joining MEMA and NAM in the effort are the Aerospace Industries Association, the American Forest and Paper Association, the Association of Manufacturing Technology and the Automotive Trade Policy Council.

"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."