The Latest Low-Cost Country

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A recent tongue-in-cheek article on Spend Matters about the U.S. becoming the low-cost country source for Europe due to a falling dollar looks like it may have substance as well as humor on its side. Rolls Royce has announced that they are establishing a manufacturing and assembly facility in Virginia to service the growing corporate jet engine market and the sophisticated manufacture of Blisk components for the U.S. Joint Strike Fighter F136 engine. These components are bladed discs machined from large solid titanium forgings, and Rolls Royce gained acceptance for their use on the F136 project two years ago in collaboration with DutchAero. Could the strength of the Euro against the dollar be the prime motivation behind this move to Virginia? Rolls Royce certainly states the exchange rate as one of three principal reasons for the move.

Meanwhile, Bloomberg has reported that U.S. exports are surging on the back of the weak dollar and cited aero engines as a specific example. With the credit crunch, volatile equities, and a slumping housing market, it would appear technology exports are the one bright spot on the horizon for the U.S. economy.

–Stuart Burns

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