To: Raymond Duray who wrote (5499 ) 2/7/2002 1:41:37 PM From: John Pitera Respond to Hi Ray, the first part of that article reads a lot like a post that Henry mentioned several weeks ago. chief executive officers of the big three US auto makers sent a letter to the White House last week, asking President Bush to express concern about yen weakness during his upcoming visit to Japan . According to Stephen Collins, president of the Automotive Trade Policy Council, which represents U.S. automakers, a weak yen is "creating a competitive disadvantage for U.S. companies and hurting the restoration of the recovery in the manufacturing sector." The market's seeming nonchalance towards the heightened complaints about the competitive disadvantages of a strong dollar is not particularly surprising. Treasury Secretary O'Neill has repeatedly stressed the fact that good companies do not live and die on the back of exchange rate movements, while we remain focused on the ability of a strong currency to mandate reform, as GM recently announced major productivity improvements in the design of new vehicles. A strong currency also provides a tailwind for foreign direct investment, as US automakers have been trying to gain market share in Asia (think GM's planned purchase of Korea's Daewoo Motor Corp.). onus for recovery on the shoulders of the BoJ . Just yesterday, the MoF's Kuroda said that while G7 finance ministers are unlikely to spend much time this weekend discussing the recent bout of yen weakness, they are likely to focus on the efforts of the BoJ to combat deflation longer-term ability to misallocate resources should not be underestimated.
