Ex-Im reauthorization - Good for America
05-28-2014, 02:56 PM
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Ex-Im reauthorization - Good for America
Export-Import Bank more than just the ‘Bank of Boeing’
Posted by Erik Smith
In this Washington, the idea that a federal agency helped Boeing sell 106 airliners last year might have us doing handstands, especially when we learn that it didn’t cost taxpayers a dime. The Export-Import Bank of the United States did it by offering $7.9 billion in loans, loan guarantees and credit insurance to foreign purchasers of Boeing aircraft, the same sort of thing it has done for the last 80 years.
Leave it to the other Washington to turn things upside down. Critics in Congress say this represents failure. They are leading a crusade to shut down the bank, on grounds that its lending to large corporations represents “corporate welfare” and crony capitalism.”
Somehow conservative rhetoric has been harnessed for a cause that will hamper America’s ability to compete in markets abroad, and the argument is so lofty it drifts in the direction of outer space. But here’s what counts. If Congress fails to reauthorize the bank by Oct. 1, the little guy gets whacked just like Boeing does. It’s not just the Bank of Boeing.
The Times editorialized recently in favor of the bank’s reauthorization, and certainly its support of Boeing transactions are reason enough. Last year Boeing accounted for a little over a quarter of the bank’s book of business, though some years it has exceeded 40 percent. Boeing’s position as top beneficiary is easily explained, as airliners are high-dollar items, Boeing is really the only major domestic producer, and there just aren’t a lot of commercial banks clamoring to lend to airlines in sub-Saharan Africa. Boeing calls on 15,000 suppliers, so there is an indirect impact on small business. But there also is a direct one.
Just talk to Jason Speer, vice president for sales at PEXCO, a Fife-based manufacturer of traffic cones, reflective traffic lane markets and other highway control gear. It just concluded a deal to sell $125,000 worth of equipment to Denmark, financed through Ex-Im. Without it, the deal could not have been done. The bank’s demise “would definitely hinder our growth,” he says.
There are plenty of cases like that – international deals too small for commercial banks, advocates say. And maybe it demonstrates how statistics can be used to prove any point. Critics say 60 percent of the bank’s business supports exports from 10 large companies that may not need any help. Advocates, like U.S. Rep. Denny Heck, D-Wash., who is leading the fight for re-authorization in the House, point out that 89 percent of the bank’s transactions support small business.
Here in this trade-dependent state, the bank has quite an impact. Since 2007 the Ex-Im Bank has supported $110 billion in exports from Washington. Most of it was for Boeing, of course. But of the 183 Washington companies that have received support, 133 of them are small businesses. Heck notes that the number-two company in Washington state to avail itself of the Ex-Im Bank’s services is Chateau Ste. Michelle winery — an indication of the wide range of products the bank supports. He says:
“When we talk about the impact of the Export-Import Bank, we aren’t just talking about the big companies. This helps the little guys too, like a boot manufacturer in Spokane. But the bigger transactions, like an order for tractors, often include parts produced by small manufacturers. The beginning to the end of the supply chain is a part of the export ecosystem.
“We must not purposefully remove ourselves from these global markets that want quality, American-made products. These small businesses work hard to expand their reach. We can’t abandon tools that allow them to thrive and hire more people by competing on a global scale, either directly or indirectly.”
Normally re-authorization is about as non-controversial a vote as can take place in D.C., but last time out, in 2012, there were 93 votes against the bank in the House, all Republican, and critics are gearing up for an even stronger push to kill it. Last week, House Financial Services chairman Jeb Hensarling, R-Texas – a man some consider House-speaker material — outlined the case against Ex-Im in a speech to an enthusiastic crowd at the Heritage Foundation. Theoretical was the word for it. He called demise of the bank “an achievable victory” for “our movement,” for a Main Street vision of business over a “political insider” vision of business. But he never did get around to explaining the good it will do America to lose business to foreign competitors with functioning credit agencies. Every other country of the developed world has such an agency – 59 countries in all. Hensarling was dismissive: “It kind of sounds like the argument I hear from my 10 and 12-year-olds, “ he said. “’Everyone else is doing it, daddy. ‘”
It’s hard dealing with argumentation of that sort, Heck says. “Welcome to my world.” He looks forward to a battle over the next four months in which he will have to convince lawmakers Ex-Im is worth their attention. Last time out, all members of the Washington delegation voted yes, Republican and Democrat. Might be easier if they would all help Heck make the case.
Posted by Erik Smith
In this Washington, the idea that a federal agency helped Boeing sell 106 airliners last year might have us doing handstands, especially when we learn that it didn’t cost taxpayers a dime. The Export-Import Bank of the United States did it by offering $7.9 billion in loans, loan guarantees and credit insurance to foreign purchasers of Boeing aircraft, the same sort of thing it has done for the last 80 years.
Leave it to the other Washington to turn things upside down. Critics in Congress say this represents failure. They are leading a crusade to shut down the bank, on grounds that its lending to large corporations represents “corporate welfare” and crony capitalism.”
Somehow conservative rhetoric has been harnessed for a cause that will hamper America’s ability to compete in markets abroad, and the argument is so lofty it drifts in the direction of outer space. But here’s what counts. If Congress fails to reauthorize the bank by Oct. 1, the little guy gets whacked just like Boeing does. It’s not just the Bank of Boeing.
The Times editorialized recently in favor of the bank’s reauthorization, and certainly its support of Boeing transactions are reason enough. Last year Boeing accounted for a little over a quarter of the bank’s book of business, though some years it has exceeded 40 percent. Boeing’s position as top beneficiary is easily explained, as airliners are high-dollar items, Boeing is really the only major domestic producer, and there just aren’t a lot of commercial banks clamoring to lend to airlines in sub-Saharan Africa. Boeing calls on 15,000 suppliers, so there is an indirect impact on small business. But there also is a direct one.
Just talk to Jason Speer, vice president for sales at PEXCO, a Fife-based manufacturer of traffic cones, reflective traffic lane markets and other highway control gear. It just concluded a deal to sell $125,000 worth of equipment to Denmark, financed through Ex-Im. Without it, the deal could not have been done. The bank’s demise “would definitely hinder our growth,” he says.
There are plenty of cases like that – international deals too small for commercial banks, advocates say. And maybe it demonstrates how statistics can be used to prove any point. Critics say 60 percent of the bank’s business supports exports from 10 large companies that may not need any help. Advocates, like U.S. Rep. Denny Heck, D-Wash., who is leading the fight for re-authorization in the House, point out that 89 percent of the bank’s transactions support small business.
Here in this trade-dependent state, the bank has quite an impact. Since 2007 the Ex-Im Bank has supported $110 billion in exports from Washington. Most of it was for Boeing, of course. But of the 183 Washington companies that have received support, 133 of them are small businesses. Heck notes that the number-two company in Washington state to avail itself of the Ex-Im Bank’s services is Chateau Ste. Michelle winery — an indication of the wide range of products the bank supports. He says:
“When we talk about the impact of the Export-Import Bank, we aren’t just talking about the big companies. This helps the little guys too, like a boot manufacturer in Spokane. But the bigger transactions, like an order for tractors, often include parts produced by small manufacturers. The beginning to the end of the supply chain is a part of the export ecosystem.
“We must not purposefully remove ourselves from these global markets that want quality, American-made products. These small businesses work hard to expand their reach. We can’t abandon tools that allow them to thrive and hire more people by competing on a global scale, either directly or indirectly.”
Normally re-authorization is about as non-controversial a vote as can take place in D.C., but last time out, in 2012, there were 93 votes against the bank in the House, all Republican, and critics are gearing up for an even stronger push to kill it. Last week, House Financial Services chairman Jeb Hensarling, R-Texas – a man some consider House-speaker material — outlined the case against Ex-Im in a speech to an enthusiastic crowd at the Heritage Foundation. Theoretical was the word for it. He called demise of the bank “an achievable victory” for “our movement,” for a Main Street vision of business over a “political insider” vision of business. But he never did get around to explaining the good it will do America to lose business to foreign competitors with functioning credit agencies. Every other country of the developed world has such an agency – 59 countries in all. Hensarling was dismissive: “It kind of sounds like the argument I hear from my 10 and 12-year-olds, “ he said. “’Everyone else is doing it, daddy. ‘”
It’s hard dealing with argumentation of that sort, Heck says. “Welcome to my world.” He looks forward to a battle over the next four months in which he will have to convince lawmakers Ex-Im is worth their attention. Last time out, all members of the Washington delegation voted yes, Republican and Democrat. Might be easier if they would all help Heck make the case.
05-28-2014, 04:36 PM
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Originally Posted by Typhoonpilot
Export-Import Bank more than just the ‘Bank of Boeing’
The Export-Import Bank of the United States did it by offering $7.9 billion in loans, loan guarantees and credit insurance to foreign purchasers of Boeing aircraft, the same sort of thing it has done for the last 80 years.
The Export-Import Bank of the United States did it by offering $7.9 billion in loans, loan guarantees and credit insurance to foreign purchasers of Boeing aircraft, the same sort of thing it has done for the last 80 years.
05-28-2014, 04:41 PM
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Originally Posted by Typhoonpilot
Export-Import Bank more than just the ‘Bank of Boeing’
Posted by Erik Smith
...
Last year Boeing accounted for a little over a quarter of the bank’s book of business, though some years it has exceeded 40 percent. Boeing’s position as top beneficiary is easily explained, as airliners are high-dollar items, Boeing is really the only major domestic producer, and there just aren’t a lot of commercial banks clamoring to lend to airlines in sub-Saharan Africa.
...
I don't mind Boeing selling all the airplanes they can build to whoever can buy 'em, but when our foreign competitors are given the advantage of a good financing deal from our federal government, I DO mind.
Maybe good for Boeing, but not so good for the airlines that employ American pilots, or the American pilots they employ.
RHETORICAL QUESTION: Just why AREN'T a lot of commercial banks clamoring to lend to airlines in sub-Saharan Africa?
.
05-28-2014, 10:20 PM
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Originally Posted by TonyC
How many of those Boeing airliners are financed for purchase by AMERICAN airlines, and how many of the discount finance deals are given to our FOREIGN competitors?
I don't mind Boeing selling all the airplanes they can build to whoever can buy 'em, but when our foreign competitors are given the advantage of a good financing deal from our federal government, I DO mind.
Maybe good for Boeing, but not so good for the airlines that employ American pilots, or the American pilots they employ.
RHETORICAL QUESTION: Just why AREN'T a lot of commercial banks clamoring to lend to airlines in sub-Saharan Africa?
.
I don't mind Boeing selling all the airplanes they can build to whoever can buy 'em, but when our foreign competitors are given the advantage of a good financing deal from our federal government, I DO mind.
Maybe good for Boeing, but not so good for the airlines that employ American pilots, or the American pilots they employ.
RHETORICAL QUESTION: Just why AREN'T a lot of commercial banks clamoring to lend to airlines in sub-Saharan Africa?
.
I'm sure we can go round and round debating the relative merits of the Ex-Im financing versus alleged damage to U.S. carriers, but the fact of the matter is that they are helping the one major manufacturer of aircraft left in America to compete against a subsidized European company ( Airbus ). That provides tens of thousands of high paying of jobs to American workers.
U.S. majors are buying the heavily subsidized Airbus products at lower cost to compete just as much as foreign airlines are buying Boeing products with good finance rates.
Those sub-Saharan Africa carriers buying Boeings sure aren't a threat to U.S. majors, are they? It's not like DAL, UAL, and USAirways are serving Khartoum, Addis Ababa, etc.
Can you detail for me how a Middle Eastern carrier ( Emirates, Etihad, Qatar ) transporting passengers from secondary cities in India via their hubs in the Middle East are hurting U.S. carriers; their pilots; or their alliance partners who never served those cities?
Also detail how using Ex-Im financed Boeings to fly passengers from Lagos, Accra, Abidjan, Conakry, Luanda via Dubai to Beijing, Shanghai, Guangzhou, Hong Kong is in any way hurting U.S. pilots or U.S. airlines.
Typhoonpilot
05-29-2014, 04:57 AM
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Ex-Im pledges $2B for exports of business jets, helicopters
By: Stephen Trimble
Washington DC
Source: Flightglobal.com
27 May 2014
The US Export-Import Bank has announced a goal to double financing support for business aircraft and commercial helicopters this year, even as it faces the threat of being shut down after 30 September.
The independent federal agency is known mostly in the aviation industry for financing billions of dollars worth of Boeing sales every year, but it has recently been expanding into business aircraft and helicopters.
As of December 2013, the Ex-Im Bank had provided $1 billion to support exports for manufacturers such as Beechcraft, Gulfstream and Sikorsky. It has already authorised loans for another $740 million in sales so far this year, and now plans to reach $2 billion by the end of the year.
The Ex-Im Bank’s broadening reach in the US aviation industry comes as a powerful faction in Congress works to strip the agency of its legal power to authorise such loans by the end of the fiscal year.
Last week, Representative Jeb Hensarling, a Texas Republican and chairman of the House Financial Services Committee, said in a speech that the demise of the Ex-Im Bank this year is a “defining issue for our party and our movement” this year.
The Ex-Im Bank survived similar calls in 2012, when a majority in Congress voted to reauthorise the bank to finance US exports for three more years. That authorization expires on 30 September, allowing the bank’s opponents another opportunity to seek its closure.
Hensarling criticizes the government-run bank for meddling in a financing sector that he believes should be reserved for the free market. Government intrusion, Hensarling argues, leads to “crony capitalism” benefiting large corporations at the expense of what he calls the “Main Street economy”.
The Ex-Im Bank says it exists to provide financing for exports where there are gaps in the marketplace at no net cost to taxpayers, as the agency returns a surplus to the US Treasury each year.
In an interview at EBACE, Gulfstream chief executive Larry Flynn expressed strong support for the Ex-Im Bank’s support. The agency’s loans were pivotal, for example, in a recent sale of a jet to a customer in Africa, he says. The Ex-Im Bank not only provided back-stop financing to secure the deal, it helped local banks in Africa understand the private aircraft financing market, he says.
By: Stephen Trimble
Washington DC
Source: Flightglobal.com
27 May 2014
The US Export-Import Bank has announced a goal to double financing support for business aircraft and commercial helicopters this year, even as it faces the threat of being shut down after 30 September.
The independent federal agency is known mostly in the aviation industry for financing billions of dollars worth of Boeing sales every year, but it has recently been expanding into business aircraft and helicopters.
As of December 2013, the Ex-Im Bank had provided $1 billion to support exports for manufacturers such as Beechcraft, Gulfstream and Sikorsky. It has already authorised loans for another $740 million in sales so far this year, and now plans to reach $2 billion by the end of the year.
The Ex-Im Bank’s broadening reach in the US aviation industry comes as a powerful faction in Congress works to strip the agency of its legal power to authorise such loans by the end of the fiscal year.
Last week, Representative Jeb Hensarling, a Texas Republican and chairman of the House Financial Services Committee, said in a speech that the demise of the Ex-Im Bank this year is a “defining issue for our party and our movement” this year.
The Ex-Im Bank survived similar calls in 2012, when a majority in Congress voted to reauthorise the bank to finance US exports for three more years. That authorization expires on 30 September, allowing the bank’s opponents another opportunity to seek its closure.
Hensarling criticizes the government-run bank for meddling in a financing sector that he believes should be reserved for the free market. Government intrusion, Hensarling argues, leads to “crony capitalism” benefiting large corporations at the expense of what he calls the “Main Street economy”.
The Ex-Im Bank says it exists to provide financing for exports where there are gaps in the marketplace at no net cost to taxpayers, as the agency returns a surplus to the US Treasury each year.
In an interview at EBACE, Gulfstream chief executive Larry Flynn expressed strong support for the Ex-Im Bank’s support. The agency’s loans were pivotal, for example, in a recent sale of a jet to a customer in Africa, he says. The Ex-Im Bank not only provided back-stop financing to secure the deal, it helped local banks in Africa understand the private aircraft financing market, he says.
05-29-2014, 05:13 AM
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Originally Posted by TonyC
Exactly how do "US purchasers" qualify for export financing?
.
.
A great question indeed....
Summary of ATLAS AIR WORLDWIDE HOLDINGS INC - Yahoo! Finance
From what I heard, Delta was denied this type of financing.
05-30-2014, 06:15 PM
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Originally Posted by Typhoonpilot
I'm sure we can go round and round debating the relative merits of the Ex-Im financing versus alleged damage to U.S. carriers, but the fact of the matter is that they are helping the one major manufacturer of aircraft left in America to compete against a subsidized European company ( Airbus ). That provides tens of thousands of high paying of jobs to American workers.
I'm all for jobs for American workers. Mostly I'm for pilot jobs for American pilots. I'm not as much for union-busting employers who move those high paying jobs to plants in right-to-work states to keep wages and benefits down. But I digress.
Originally Posted by Typhoonpilot
U.S. majors are buying the heavily subsidized Airbus products at lower cost to compete just as much as foreign airlines are buying Boeing products with good finance rates.
Originally Posted by Typhoonpilot
Those sub-Saharan Africa carriers buying Boeings sure aren't a threat to U.S. majors, are they? It's not like DAL, UAL, and USAirways are serving Khartoum, Addis Ababa, etc.
Can you detail for me how a Middle Eastern carrier ( Emirates, Etihad, Qatar ) transporting passengers from secondary cities in India via their hubs in the Middle East are hurting U.S. carriers; their pilots; or their alliance partners who never served those cities?
Also detail how using Ex-Im financed Boeings to fly passengers from Lagos, Accra, Abidjan, Conakry, Luanda via Dubai to Beijing, Shanghai, Guangzhou, Hong Kong is in any way hurting U.S. pilots or U.S. airlines.
I can go to the Emirates website to see more U.S. destinations that it serves. Boston, Chicago, Seattle ... who wants to go there? How about these airports ... when I go to Emirates' website to book a flight, I can choose from these departure airports:
Austin (AUS)
Baltimore (BWI)
Boston (BOS)
Buffalo (BUF)
Burlington (BTV)
Charlotte (CLT)
Chicago (ORD)
Dallas (DFW)
Denver (DEN)
Detroit (DTW)
Fort Lauderdale (FLL)
Fort Myers (RSW)
Houston (IAH)
Jacksonville (JAX)
Las Vegas (LAS)
Long Beach (LGB)
Los Angeles (LAX)
New York (JFK)
Newark (EWR)
Orlando (MCO)
Philadelphia (PHL)
Portland (PWM)
Raleigh (RDU)
Rochester (ROC)
San Diego (SAN)
San Francisco (SFO)
Sarasota (SRQ)
Seattle (SEA)
Syracuse (SYR)
Tampa (TPA)
Washington (DCA)
Washington (IAD)
West Palm Beach (PBI)
It's funny how you didn't mention Ex-Im financed Boeings flying passengers to and from U.S. cities, even though the list is long. That's a lot of U.S. pilot jobs.
.
05-31-2014, 03:08 AM
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Originally Posted by TonyC
It's funny how you didn't mention Ex-Im financed Boeings flying passengers to and from U.S. cities, even though the list is long. That's a lot of U.S. pilot jobs.
How do U.S. pilot jobs get lost when the U.S. majors never served the city pairs?
When was the last time a U.S. carrier served:
Karachi
Islamabad
Peshawar
Lahore
Ahmedabad
Cochin
Trivandrum
Calicut
Calcutta
Dar Es Salam
Nairobi
Addis Ababa
or any of a long list of other places?
U.S. carriers fly people from the USA to: Europe, South America, Asia or within the USA. Do Emirates or any of the Middle Eastern carriers do that?
If anything the argument should be made by the European carriers. It was more them who served those passengers from the USA via their European hubs to those types of places.
If anything the publicity of Emirates and the others has caused more travel to those areas than existed before they became known. Ten years ago neither UAL nor DAL served Dubai, now they both do and their flights are very full. How did that cause the loss of U.S. pilot jobs?
What routes have U.S. carriers had to pull out of because of competition from Emirates, Qatar, or Etihad? Honest question because I can't think of any, can you?
TP
06-17-2014, 11:53 AM
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Originally Posted by Typhoonpilot
How do U.S. pilot jobs get lost when the U.S. majors never served the city pairs?
When was the last time a U.S. carrier served:
Karachi
Islamabad
Peshawar
Lahore
Ahmedabad
Cochin
Trivandrum
Calicut
Calcutta
Dar Es Salam
Nairobi
Addis Ababa
or any of a long list of other places?
U.S. carriers fly people from the USA to: Europe, South America, Asia or within the USA. Do Emirates or any of the Middle Eastern carriers do that?
Maybe I'm missing something, but I'm not concerned about the list of locales not served by U.S. carriers.
What DOES concern me is the picture I see when I pull up FlightAware or FlightRadar24 and filter for EK or UAE call signs. The half dozen or so Emirates flights I see over the U.S. don't represent U.S. pilot jobs. If pilots were leaving major U.S. carriers to fly for them, it might be a different story. On the contrary, the U.S. pilots flying for them are furloughed from U.S. carriers or otherwise unable to find employment, taking foreign jobs as a last resort. U.S. carriers are forced to compete with state-owned airlines operating Ex-Im financed airplanes paying sub-par wages to desperate pilots. That's NOT a level playing field, and I can't help but be frustrated that our own federal government helps tilt it in their favor.
And it's not just Emirates.
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