By Liz Segrist
Published Oct. 29, 2015
The independent federal agency helps finance the export of U.S. products and charges fees and interest to cover its operating costs and loan-loss reserves.
The bank, which has been defunct since July when Congress failed to reauthorize it, has been a topic of divisive debate among legislators and corporations. The bank’s future might not be determined until December, when a Senate vote is expected.
“The House bill now goes to the Senate, which approved a similar bank reauthorization measure as part of an unrelated transportation bill,” the Times report said. “While the Senate majority leader, Mitch McConnell, Republican of Kentucky, opposes the bank bill, the bipartisan House vote is expected to strengthen the hand of the bank’s proponents in negotiations over the transportation bill’s provisions.”
The bank is the U.S. version of an export financing entity. Boeing’s airplane programs, including the 787 Dreamliner facility in North Charleston, and General Electric’s businesses, such as its gas turbine production plant in Greenville, use Ex-Im financing when selling to international customers.
Proponents of the bank said its closure could lessen S.C. manufacturers’ overseas competitiveness. Several large manufacturers have said the loss of Ex-Im financing will hurt international sales, create job loss in the United States and impact their supply chains.
Opponents say the agency provides companies with corporate welfare and exhibits crony capitalism. Many have said major manufacturers’ announcements that they will move jobs out of the United States are only threats to pressure reauthorization of the bank. Others said that companies choosing to send jobs overseas would have made those decisions regardless of the bank’s status.
Beverly Wyse, general manager and vice president of Boeing South Carolina, has said reauthorization is critical to support Boeing programs and hundreds of S.C. companies within Boeing’s supplier base. Lack of funding also could result in loss of market share to Airbus, which receives similar financing in Europe.
GE has already announced some relocation and expansion decisions outside of the U.S. to take advantage of other countries’ export financing options, such as plans to close a manufacturing gas engine plant in Wisconsin and move 350 jobs to a new factory in Canada.
“Our competitors all have access to this financing,” S.C. Manufacturers Alliance President Lewis Gossett said recently. “It makes it incredibly difficult for us to compete on the international level without it.”
The Ex-Im Bank faced closure last year as well, but Congress approved a nine-month extension as part of the plan to prevent another government shutdown. The bank has historically received approval for five-year stints.
The Export-Import Bank has provided loans, loan guarantees and credit insurance to U.S. exporters and foreign buyers since the 1930s. During the 2014 fiscal year, ended Sept. 30, the bank approved $20.5 billion in financing and guarantees.
Small business deals accounted for nearly 90% of the 3,700 Ex-Im transactions conducted in fiscal 2014, according to the bank’s annual report.
Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.