Fix it Again, Tony

WILLĘTHE NEXT major U.S. automaker expansion come from Fiat or Volkswagen? It could happen. The Euro's strength against the dollar puts European automotive manufacturers in a bind; they want access to the largest single car market in the world, but the export conversion rates are killing their bottom line. (Not to mention that Western European auto workers generally cost more to employ than Americans.) BMW and Mercedes already took the plunge (in South Carolina and Alabama, respectively); Alfa Romeo (a brand belonging to Fiat, the preeminent Italian automotive corporation) has long been planning its U.S. comeback, but lately the climate suggests they'll actually have to start producing here, too, if they want to make money. Volkswagen at one point had a U.S. plant in the Pittsburgh area, but it closed long ago. See this week's article in the New York Times for a full overview.

(One thing that left me wondering: sure, the Canadian dollar is no deal anymore, but isn't Mexico still a cheaper place to make cars to sell in the U.S.? Why would a company not tied down by UAW commitments not choose the cheapest place in which to build? Perhaps it's an image thing: European brands have some cachet to them, and buying a Bimmer made in Hermosillo might cause the customer to question the quality, even though in all likelihood, it would be about the same. Then again, Volkswagen already makes New Beetles in Mexico. The other explanation: it's not really always cheaper to build in Mexico, unless perhaps you plan to export the same vehicle to Latin America as well.)