Posted By David Brousell, December 08, 2015 at 1:11 PM, in Category: Manufacturing Advocacy
President Obama last week signed legislation that reopened the Export-Import Bank of the United States, but currently the agency’s under-manned board will prevent it from approving transactions over $10 million.
According to a New York Times report, only two of the Ex-Im Bank’s five-member board seats are currently filled, rendering the board unable to conduct key aspects of its business because of a lack of a quorum. The two current seat holders are Fred P. Hochberg, chairman, and Wanda Felton, vice chairwoman. The president has yet to name appointees for the other three seats, which will be filled by one Democrat and two Republicans.
All nominees will have to be confirmed by the Senate before they can take their seats.
Meanwhile, the Ex-Im Bank will be able to accept and review applications for loans, loan guarantees, and credit insurance; provide working capital to small business to buy material needed to fill export orders; and approve transactions that do not exceed $10 million.
What the agency won’t be able to do is approve big orders for deals such as aircraft, satellites, and major manufacturing equipment. General Electric, Boeing, and Caterpillar, for example, warned about the impact bank’s demise would have on their businesses after the bank was closed in late June as a result of the refusal of the Republican-controlled House of Representatives to re-authorize its charter.
Opponents of the bank say the agency is an example of corporate welfare that must be stopped. Supporters of the 81-year old agency say it is essential in a global economy in which competition is rising from countries such as China and India.
During the struggle over the bank’s reauthorization, Boeing said that Asia Broadcast Satellite cancelled an $85 million contract with it because there was no EX-IM Bank financing. And GE said it was bidding on $11 billion worth of projects that require export financing and that it had struck a deal with the French export credit agency COFACE to provide a line of credit for power-related projects. The company said that, in order to obtain required export credit for customers of its aeroderivatives turbines, it will move final assembly of the products from the U.S. to Hungary and China. http://wws.ml100awards.com/blog/its-time-put-exim-bank-back-business/
Yesterday, bank chairman Hochberg said that, since the bank’s closing on June 30, about 200 transactions worth $9 billion were stopped in the pipeline, according to the New York Times.
It is now essential for the White House to act quickly to nominate new board members so that the Ex-Im Bank can conduct its business fully.
Written by David Brousell
Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council