Last week I wrote about the weak dollar and whether it helps or hurts U.S. small businesses (answer: it all depends).
Here is another side to the story. A New York Times article by Mark Landler profiles the disastrous impact the dollar’s fall is having on European small businesses that export to the United States:
“To get a sense of how fast the falling dollar can ruin a European businessman’s day, talk to Udo Pfeiffer, the chief executive of a small German machinery maker in the industrial Ruhr Valley.
Mr. Pfeiffer’s company, SMS Elotherm, builds machines that forge crankshafts for cars. He exports many to the United States and Mexico, selling them for dollars to manufacturers like DaimlerChrysler.
In recent weeks, the euro has been rising so rapidly against the dollar that Mr. Pfeiffer lost $10,000 in profit in the three days between shaking hands on a $1.5 million deal for a machine and signing the contract. The profit on these machines, he said, will be no more than $30,000.”
Small family businesses that don’t have the resources to do currency hedging have been hit especially hard. Read the whole article here.