ICYMI: U.S. Businesses Re-think Growth Strategies Due To Ex-Im’s Lapse
Congress’ failure to reauthorize Ex-Im Bank continues to have consequences for job creators and their employees across the country. What’s more, the lasting uncertainty is causing businesses to re-think their global growth strategies for the long-term.
From large manufacturers like Boeing, whose chairman recently stated it might have made a “mis-step in planning to do all its aircraft production in the U.S.,” to small businesses like the Chicago based Howe Corporation that are struggling to find sufficient working capital without access to Ex-Im, companies are being forced to change or alter their global growth plans and outlook.
Please see below for further details on how Congress’ inaction on Ex-Im is impacting U.S. job creators.
Large Exporters, Boeing and GE, Are Rethinking U.S. Production Due To Lapse Of Ex-Im. “Boeing chairman James McNerney recently told a Washington gathering that the company may have made a mis-step in planning to do all of its aircraft production in the U.S., given the failure of Congress to reauthorize Ex-Im Bank. Another big U.S. exporter, General Electric, recently disclosed plans to move aerospace activities to Europe because of the easy availability of export credits there. Unlike in Europe, where export assistance often takes the form of subsidies, Ex-Im Bank costs are covered by fees charged to users, so no subsidies are involved.” (Loren Thompson, “Boeing To Build Its First Offshore Plane Factory In China As Ex-Im Bank Withers,” Forbes, 9/23/15)
Illinois Family Business Owner Says If Ex-Im Is Not Renewed, Her Company Will Be Short Of Working Capital. “For small business owners such as Mary Howe, the potential closure could reduce her access to working capital. Howe’s family business, Howe Corp. in Chicago, exports up to 40 percent of its industrial refrigeration equipment to places including Central America and Canada. And if the Ex-Im Bank’s funding isn’t renewed? ‘Our backup plan is to self-fund; it’s going to get tight,’ Howe said.” (Kate Rogers, “Main Street Awaits Fate Of Ex-Im Bank, Key Lender,” CNBC, 9/23/15)
Orbital ATK Loses Satellite Deal Due To Ex-Im Lapse. “Ted McFarland, senior director for GEOComm at Orbital ATK, said his company lost a competition for the Azerspace-2 satellite with the government of Azerbaijan because Ex-Im could not provide financing after its authorization lapsed July 1.” (Jeff Foust, “Orbital Blames Lost Satellite Deal On Ex-Im Closure,” Space News, 9/22/15)
GE Vice Chairman John Rice Says GE Was Left With “No Choice” But To Move Production To Countries That Support High-Tech Exports. “‘In a competitive world, we are left with no choice but to invest in non-U.S. manufacturing and move production to countries that support high-tech exports,’ said John Rice, vice chairman at GE, in a statement on Tuesday.” (Nick Timiraos, “General Electric Says to Move 500 U.S. Jobs Overseas Blaming Ex-Im Bank Closure,” Wall Street Journal, 9/15/15)
Jay White, President Of South Carolina Based Morrison Textile Machinery Says Ex-Im Support “Very Important To My Business.” “President Jay White says Ex-Im allows the company, which designs, manufactures and installs textile machinery globally, to insure its overseas business on a rolling basis. ‘If I can’t get Ex-Im insurance, I am taking on credit risk myself—the profit on my job would be eaten up if I get commercial credit insurance,’ White says. ‘This overseas credit support is very important to my business,’ he says.” (Kate Rogers, “Main Street Awaits Fate Of Ex-Im Bank, Key Lender,” CNBC, 9/23/15)