Businesses Across the Country: Killing the Export-Import Bank 'Would be Devastating'
U.S. manufacturers say major industrial contracts in developing countries, from rail links in Africa to power plants in Eastern Europe, will be in jeopardy if the U.S. Export-Import Bank closes its doors when its charter expires at the end of the month.
Officials at companies such as Boeing Co. , General Electric Co. , and Westinghouse Electric Co. also warn that competition for water, transportation, and electricity deals is so cutthroat that they would be forced to move manufacturing overseas if the Ex-Im Bank isn't open to guarantee financing.
"We may continue to develop the technology in the U.S., but we may have to move our factory overseas just so I can get a foreign country to give me financing for goods and services made in that country," said Danny Roderick, chief executive of Westinghouse, which is based in Cranberry Township, Pa.
Already caught up in the Ex-Im Bank's uncertainty are deals that include up to $1 billion for rail, refinery, and power equipment in Angola. The locomotive deal, led by GE, is worth $350 million and is expected to generate 1,800 jobs in 12 states…
The bank's backers believe they have the votes needed to renew the 81-year-old agency…
…Without Ex-Im guarantees, loans might trigger certain charges under international bank-capital rules known as Basel 3. In other cases, they're not willing to extend the type of long-term financing that other state agencies will offer.
Business executives say the fight risks eroding American dominance in global trade at a time when companies in China, South Korea and Europe aggressively use state-backed export-credit agencies of their own. Since its founding, the Ex-Im Bank has lent or guaranteed some $590 billion.
Ricky Muloweni, who runs an equipment wholesale firm based in Dallas, is currently working to buy $5 million in equipment and fertilizer for an Angolan commercial landscaping company. But the uncertainty over Ex-Im means the next phase of construction likely won't go to an American supplier.
…The company estimates that suppliers in 16 states and 2,500 jobs would be lost if the Ex-Im Bank isn't able to guarantee financing.
The renewal of Ex-Im Bank is particularly important to utility and transportation component manufacturers because some countries won't even consider offers that come without credit lined up from an export agency, said James Stouch, vice president of business development at Precision Custom Components in York, Pa. "You need a loan guarantee going in, to even submit a proposal," he said.
And all the while GOP Financial Services Chairman Hensarling says the job-creating Export-Import Bank is "corporate welfare," Rachael Cox, Vice-President of Business Development for Conway Machine, Inc. and Republican witness before Chairman Hensarling's committee, told her hometown newspaper, the Northwest Arkansas Democrat-Gazette, otherwise:
I am a small-government advocate, but the fact is that there are a lot of small businesses and large businesses that need the bank right now, and to pull that rug out from under them would be devastating. There's too many people relying on it. [6/7/2015]
Instead of listening to extremists, far-right groups highly influential in the Republican Government Shutdown of 2013, Mr. Hensarling should listen to Ms. Cox, the thousands of businesses, Mayors, Governors and people whose jobs are on the line in his own district.