GOP's Ex-Im Shutdown: A Blow to U.S. Companies
The refusal of House Republican leaders to allow a vote on legislation to reopen the Export-Import Bank is harming U.S. businesses and will cost hardworking Americans their jobs. Here's an update of the latest impacts of the GOP's shutdown of the Bank:
WSJ: Shutdown of U.S. Ex-Im Bank Puts Companies in a Financing Bind
“Amid a clash over spending priorities, congressional Republicans effectively shut down the U.S. Ex-Im Bank by failing to reauthorize the agency at the end of June.”
“The shutdown was a blow to many companies in the U.S. and abroad that are fighting for revenue in a sluggish global economy. Many foreign companies like Ethiopian Airlines are looking to do business with trusted American suppliers, while U.S. companies are searching abroad for new customers.”
“Declining exports, combined with a lack of U.S. Ex-Im Bank funding, is ‘a double-whammy,’ said David Ickert, finance chief of Air Tractor Inc., which makes small aircraft for the agriculture industry.”
“Ethiopian Airlines’s Mr. Gebremariam said he hopes to buy more than two dozen planes from Boeing in coming years, but will consider going to European rival Airbus Group SE if the U.S. Ex-Im Bank stays out of business.”
“‘There’s definitely an impact on our expansion and growth,’ he said. ‘Some economies in Africa are considered high risk, so banks wouldn’t be able to finance us directly without Ex-Im backing.’”
“Boeing said such sentiments reflect private conversations it has been having with customers for months. ‘They want to keep buying American, but the uncertainty over the future of the Export-Import Bank is forcing them to consider other options,’ said a company spokesman. Boeing, a strong proponent and major beneficiary of the bank, expects it to reopen. But an extended shutdown would prompt Boeing to consider moving work offshore to compete for contracts that require Ex-Im backing, Chairman Jim McNerney said last month.”
“General Electric Co. is already doing so, to make it easier for its customers to use Ex-Im funding from other countries, such as Canada, France and Hungary.”
“Meanwhile, small U.S. companies, which can’t relocate or move jobs overseas, are feeling the brunt of the bank’s closure. W.S. Darley & Co., a maker of firetrucks and related gear, said the shutdown already has cost it a contract worth about $7 million.”
“‘We might be losing projects we’re not aware of,” he said. “If a buyer knows that Americans don’t have an open Ex-Im, they might not even knock on the door, or invite us to the bid table.”
And as if you needed more proof that Republicans’ politically-motivated shutdown is hurting U.S. businesses, take a look at these stories from American workers across the country:
South Carolina: “We are now seeing the results of Congress’ failure. General Electric (GE) is shutting down U.S. plants to move 500 high-paying jobs overseas from South Carolina, Texas, Florida, and Maine plants to China, Hungary, and France because those countries provide the Ex-Im function. Two of the affected GE divisions, Aviation and Gas Turbines, have Greenville factories. South Carolina cannot afford to lose 100-200 high-paying jobs!” [Greenville Online Letter to the Editor, 10/3/15]
Missouri: “Al Moresi, Semi-Bulk’s controller, said the company hasn’t had any export transactions since July. ‘It will be problematic if they never approve the Ex-Im Bank again, because we would have to go to somebody who charges higher fees,’ he said. Even companies that don’t deal directly with the Ex-Im Bank are concerned about its inability to lend. ‘If Boeing does start to lose aircraft sales, we start to lose business,’ said Dan Korte, chief executive of LMI Aerospace in St. Charles.” [St. Louis Post-Dispatch Column, 10/4/15]
North Dakota: “Now that the Ex-Im Bank is unauthorized, [Justin] Flaten [president of JM Grain] said his company is ‘a little more conservative in going after business.’… As long as the Ex-Im Bank is off the table, [Dean] Gorder [of the North Dakota Trade Office] said those smaller businesses that have used it to compete in the international market will experience negative effects. ‘The big companies have more resources at their disposal, but it’s the small companies that are taking the brunt of it,’ he said.” [The Dickinson Press, 10/2/15]
Connecticut: “[Beauty Enterprises Inc.], with about 30 percent of its business overseas, uses the bank's insurance to secure accounts receivable on some of its overseas accounts, said Larry Sussman, vice president of finance, who said the insurance is a means of getting new business. With EX-IM not doing any new business, ‘It certainly curtails any potential existing customer to increase insurance for now until our policy expires, which is in March, and it precludes new customers who would want to get credit with us through EX-IM Bank to obtain it,’ Sussman said.” [HartfordBusiness.com, 10/5/15]