Utility Equipment Maker Grows With Help Of Ex-Im Bank
Vermeer Corp. - Pella, Iowa
Vermeer Corporation, a medium-sized Iowa-based manufacturer of large trenching and utility installation equipment, has been in business for almost 70 years and currently sells its niche products used to install underground water, sewer, telecom, and power installations in about 80 different countries globally. Vermeer’s equipment is helping to improve infrastructure across the world, while providing much needed revenue back here in the states. Daryl Bouwkamp, senior director for International Business Development & Government Affairs, says this is made more possible with the support of the U.S. Export-Import Bank (Ex-Im Bank).
Due to the nature of Vermeer’s highly-specialized equipment, foreign banks are often hesitant to provide funding for a product they don’t fully understand and U.S. banks face steep barriers abroad, especially in emerging markets. However, the Ex-Im Bank alleviates this problem by providing loan guarantees to commercial lenders, enabling foreign buyers of U.S. goods to secure affordable private-sector financing. The Ex-Im insured loans give foreign buyers more confidence and give Vermeer more security when expanding into new markets.
Most recently, Vermeer’s bank Wells Fargo was able to finance an $8.5 million product order in Saudi Arabia for a road construction project. This equates to about three times more orders than would have been possible without insurance provided by Ex-Im—that’s $6 million more in product and about 25,000 additional working hours.
Unfortunately, instead of focusing on facilitating more business like this abroad and strengthening the job market at home, Mr. Bouwkamp is spending his time in Washington, D.C. explaining the need for the Ex-Im Bank to Congress. More harmful than this immense waste of time and resources however, is the negative impact continuous uncertainty around the Bank’s renewal every two years has on Vermeer’s competitiveness.
“A longer-term reauthorization would be very helpful, as uncertainty is never a friend of business,” said Bouwkamp. “There’s enough complexity to deal with in the sales process, but having to struggle with potential customers’ uncertainty over a financial package gives foreign competitors a real advantage.”
The Export-Import Bank levels the playing field for U.S. manufacturers selling their products abroad by ensuring a substantial and competitive financial package is available. Without the certainty Ex-Im provides to foreign customers, American manufacturers will fall behind foreign competition. If the U.S. is serious about regaining its share of the global export market, Congress must renew the Export-Import Bank’s charter.