Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.
TEXT OF INTERVIEW
Scott Jagow: This morning, the dollar is weaker against the euro — $1.47 buys one euro. Not much fun for American tourists visiting Europe, but it’s serious business for European companies. The strong euro is killing their export business. There are rumblings that European companies like Airbus might build a factory in the U.S. And now, the car maker Fiat is saying that.
Joining us our European Correspondent, Megan Williams, from Rome. Megan, what exactly is Fiat saying exactly?
Megan Williams: Well, the head of Fiat announced that Fiat is now considering moving, opening a factory in the United States. And the most obvious reason is that the dollar is so much cheaper compared to the euro now, and it’s very expensive for Europe to produce in Europe and then sell to the United States. The prices are just too high. So that’s the main reason. And factory workers in Europe, Italy on average earn about $10 an hour more than factory workers in the U.S.
Jagow: But why Fiat? We don’t hear that name much here in the United States anymore. My dad used to have one of those little sports cars, but I don’t think they sell many of those here anymore. So why would they want to come here?
Williams: Yeah, well Fiat is, you know, used to be famous for, what did Fiat stand for? “Fix it again, Tony.” You know, those days have changed. It was in trouble for many, many years, and about four years ago it had a tiny share of the European market, a miniscule share of the American market. Then, Sergio Marchionne took over, he introduced much better models, and planned, had planned to introduce the Alfa Romeo back into the U.S. It hasn’t been there for 13 years now. But, you know, he also realized that if he’s going to introduce the Alfa Romeo into the U.S., he’s probably going to have to switch production there.
Jagow: We already have some plants here in the United States for BMW and Mercedes Benz in the South. Is the currency thing possibly a driver for more European car makers to think of building plants here?
Williams: Well, certainly Volkswagen in Germany is thinking about it. They’ve announced that they’re scouting for a plant right now, and they’ll decide sometime next year. I mean, it’s all part of the geographical diversification that car companies are doing. They’re opening up factories all over the world, and you really have to in order to keep the prices down.
Jagow: All right, Megan Williams reporting from Rome. Thank you.
Williams: Thanks, Scott.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.