Weak Dollar Hangs Over US Carmakers

Sluggish auto market and sliding dollar spells red-ink for US auto manufacturers European operations.

Published: 17-Jan-2005

DETROIT (Reuters) - The record rise of the euro against the dollar hangs over the big U.S. automakers, whose returns from European operations in particular have shrunk due to the weaker U.S. currency.

Both General Motors Corp. and Ford Motor Co. , the top two U.S. producers, are predicting another tough year for sales growth in the sluggish European Union economy. The euro's steady gains inflated the losses at GM and Ford's European operations last year.

"It's a multi-pronged issue. On the one hand, it makes life more difficult for the European-based entities," Ford Chief Executive Bill Ford Jr. said last week at the Detroit auto show. "On the other hand, it should make life more palatable for the U.S.-based manufacturing group."

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