Sign o' the Times?
The BBC reported on Monday that the German car manufacturer BMW will increase production at its Spartanburg, South Carolina factories. The move would create about 500 new jobs in America. The move is on the heels of an announcement by BMW that it would shed 7.5 percent of its German workers.
The falling value of the American dollar has hurt European companies that pay labor and other costs in euros, but generate revenues in dollars. Basically, BMW will save money by manufacturing more cars in South Carolina, thereby reducing euro-based labor costs and also saving money by contracting with American suppliers for parts.
In short, the value of the American dollar has fallen to the point that America has become a source of cheap(er) labor for BMW. Imagine that; Europe is looking not only to India and China for cheaper labor, but now they are also turning to America. This begs the question: Is this a sign of the times, or a sign of things to come?
