Danuta Gasior (left) and Daniela Garcia work for Craftsman Custom Metals, which has been helped by the weak dollar. Chuck Berman/Chicago Tribune

Date published: 4/17/2008

By GREG BURNS

CHICAGO TRIBUNE

CHICAGO--

It's a familiar story, except the workers hail from a Rolls-Royce plant in England, and their work is moving to America's industrial heartland.

Chalk it up to the weak dollar. The Rust Belt industries that usually languish in a recession now face an economic downturn with the unfamiliar advantage of a U.S. dollar standing at its lowest point in more than a decade.

That makes American goods and services much cheaper for those with pounds, euros and Canadian dollars to spend. In addition, U.S. goods are even more competitive against Chinese imports, because China's currency has gained value against the dollar.

The upshot: an opportunity for U.S. companies to cushion the blow of the softening economy.

"Our exports have been increasing, and I'm sure the dollar has something to do with that," said Scot Schroeder, industrial sales manager at Aurora Bearing Co., a 200-employee maker of rod-ends, bearings and bushings that recently doubled the size of its manufacturing plant in Montgomery, Ill., a suburb of Chicago. "We are still extremely busy."

No one expects the anemic dollar to make all the difference. And it may help less than some optimists suppose. Still, for a Midwest manufacturing sector that has lost 20 percent of its jobs since 2000, it's an unaccustomed relief to find a global economic trend finally working in its favor.

"It should help the manufacturing sector in a way it hasn't in earlier recessions," said Bill Testa, economist at the Federal Reserve Bank of Chicago. "It probably will contribute to maintaining production here."

On a broader level, rising exports could help soften the blow from an economy many experts say is already in recession.

For companies positioned to take advantage of their currency edge, the opportunity can translate into new business. Craftsman Custom Metals in Schiller Park, Ill., for instance, received an order for 600 aluminum chassis used in telecommunications equipment.

Though complex to produce and bulky to ship, it's the type of product that factories in China have been slapping together on the cheap. Craftsman hasn't been asked to make a similar chassis since 2002.

It landed the sale, at least in part, because the weak dollar made its bid more competitive, said President Julio Gesklin. "This is the first time we've had this experience," he said. "It opens additional doors."

Gesklin's experience is by no means unique.

Giant companies such as Boeing Co. and Caterpillar Inc. have been feasting on overseas orders. The boom in demand for grain and oilseeds has given an export boost to big agricultural players too, such as Deere & Co. and Archer Daniels Midland Co.

Also prospering: North American steel mills, a symbol of Midwest industrial decay during the Rust Belt-era of the early 1980s, when a strong dollar and a deep recession priced U.S. goods out of foreign markets.

Date published: 4/17/2008