Rolls Royce Blames the Dollar and Procurement Costs for Job Cuts

I recently picked up on this little tidbit from European Leaders that Rolls Royce is planning on cutting "2300 jobs worldwide as it looks to slash costs and offset problems caused by the weak dollar and high raw materials costs ... Back in July, Rolls Royce said that the declining strength of the dollar had added £40m to the company's procurement costs and announced its intention to overhaul its supply chain practices in an attempt to improve efficiency." Without question, Rolls Royce is not alone in the European market when it comes to the impact of the falling dollar and rising material costs. But who will be next to slash jobs or give earnings warnings as a result? I reckon European automakers and other industrial companies are most likely to follow in Rolls Royce's steps. Of course, there are probably those who hedged their overall exposure and risk either by buying and selling in local currencies in local markets or through financial instruments. But it's my guess that most European manufacturers still have significant exposure.

- Jason Busch

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