Wither The Dollar

A weak dollar should be good for U.S. exports. But it's already causing pain overseas, and in the long run it could drive up the cost of living at home

At Balder Electric, which is based in Fort Smith, Ark., but sells its industrial motors around the world, these are flush times. After several sluggish years, profit margins are expanding again, revenue is soaring, and earnings will rise 30% this year. Its sales in 70 countries are booming--from Canada to Germany to China. "Our international business is up almost double our domestic business," says CEO John McFarland.

Yet things are very different for manufacturers based in some of the same countries where Baldor is doing so well. Weinig Gruppe, a midsize machinery maker near the city of Würzburg, Germany, has resorted to discounts...