Ex-Im Bank Helps Maker Of Steam Generators
ProGauge Technologies, Inc. – Bakersfield, California
Located in Bakersfield, California, ProGauge Technologies, Inc. manufactures steam generators, metering systems and manifold equipment necessary for the recovery of heavy oil. These machines inject steam into reservoirs to thin out oil so it’s easier to pump. Founded in 1998, ProGauge began exporting equipment with the help of the Export Import Bank of the United States in 2006. ProGauge’s customers are found at work in oil fields all around the world.
Thanks to Ex-Im support, exports now make up 65% of ProGauge’s revenue.ProGauge uses Ex-Im Bank guarantees. President Don Nelson explains, “The way our business works, we get money from our customers up front and they get a bank guarantee from Wells Fargo. In order to get a guarantee, Wells Fargo requires us to get an Ex-Im guarantee and put up 10% collateral. Without Ex-Im bank, Wells Fargo would make us put up 100% collateral, and we would have no money available for operations.”
ProGauge employs around 100 people in Bakersfield, and exports are critical to their jobs. Likewise, Ex-Im is critical to ProGauge’s export business. “Nobody is going to take the place of Ex-Im,” says Don Nelson. “We’re already working with a private bank. Without Ex-Im, we wouldn’t have the collateral required for our projects.”
Ill-informed critics of Ex-Im charge that it crowds out private-sector finance. However, as ProGauge shows, this simply isn’t true. Private banks require small businesses to get Ex-Im guarantees so they can be granted bank guarantees without putting up 100% collateral. In other words, Ex-Im Bank makes exporting possible for small American businesses.
Without Ex-Im, some large companies may be hurt, but many small businesses, including ProGauge Technologies, Inc., will have to stop exporting entirely. When asked what effect Ex-Im’s closure would have on his business, Nelson replies, “Revenues would go down by about 75% and I’d have to lay off between 50 – 60 people. Ex-Im is critical to our business.”