THE PLANK DECEMBER 7, 2009
My eye was drawn to the provocative headline, “Alcoa head says weak dollar is bad for US industry.” How could that be? Aren’t American manufacturing firms being hurt by an overvalued dollar that increases the price of their goods made here relative, say, to imports from China? That may be true, I learned, but that is not what bothers Klaus Kleinfeld, the CEO of Alcoa. He is worried because a weaker dollar makes the products that Alcoa manufactures outside the United States more expensive inside the United States. “It is actually hurting us substantially,” Kleinfeld told the Financial Times. “Most [US manufacturing firms] have an even larger manufacturing base today outside of the U.S.”
The German-born and educated Kleinfeld, who until recently headed Siemens, said he had been discussing the matter with officials in Washington. And what, I wonder, was their response? “Yes, Mr. Kleinfeld, we know it’s a big problem. We’ve been trying for years to get American manufacturers to ship their jobs overseas, and now this decline in the dollar is undermining our efforts." I wonder what Ron Bloom would have said.