EXIM Bank Quarter in Review - Summer 2015



EXPORT-IMPORT BANK OF THE UNITED STATES QUARTER IN REVIEW VOLUME 2

 

// 07.28.2015

Message from the Chairman

A Challenging Time
There is no easy way to say it – it has been a tumultuous third quarter here at EXIM Bank. 
As you probably know by now, as of June 30th at midnight, EXIM Bank lost its authority to approve any new transactions.  While all preexisting loans, guarantees, and insurance policies continue in full force and effect, and work continues on any transaction authorized prior to EXIM’s lapse, we can’t do new deals.
You also probably know our most recent results:

  • EXIM Bank has supported 1.3 million private-sector American jobs over the last 6 years – including 164,000 jobs in FY2014 alone.
  • In FY2014, nearly 90 percent of EXIM’s transactions directly supported American small businesses – and that doesn’t include the thousands of small businesses that are in the supply chain of EXIM’s larger customers.
  • Last year we generated $675 million in profit for American taxpayers.  And over the last two decades, we sent $6.9 billion to the U.S. Treasury for deficit reduction. 
  • All with a default rate that is currently 0.167%.

First 9 months of FY2015
But let me provide you some new numbers – highlighting what we were able to do in the first 9 months of this fiscal year before our authorization lapsed:

  • EXIM has supported approximately $16 billion dollars in U.S. exports – including an estimated $5.8 billion in small business exports
  • EXIM supported approximately 100,000 U.S. jobs.
  • Our small business authorizations were up, signaling that small businesses continue to have a hard time finding support to grow from the private market. 

Let me be clear, while these numbers were promising and signaled strength for American exporters and workers – as of July 1st, we stopped doing new deals.  Bottom line: this has been a benefit to our global rivals, and extremely detrimental to American businesses

Foreign Rivals
Just before our lapse, we released our annual competitiveness report to Congress which showed there are now approximately 85 export credit agencies in countries around the world competing aggressively to win sales and jobs from the U.S. 

In fact, a senior official from China Ex-Im recently stated that EXIM’s shutting down would be “a good thing.” And the head of India’s export agency said that without EXIM, India would have more market share now that U.S. competition will “go away.”


Impact on Small Businesses
And while our global rivals are celebrating, here at home small businesses are already feeling the consequences of an un-level playing field. 
Last week, I was honored to join representatives from 10 small businesses from across the country that had traveled to Washington, DC, to meet with President Obama and talk about the important role EXIM plays in leveling the playing field for American businesses and workers. 

We heard stories from Paul Sullivan, Vice President of International Business Development for Acrow Bridge, a small business that employs around 200 people.  Based in New Jersey, with manufacturing facilities in Pennsylvania, Acrow has designed, manufactured and sold prefabricated modular steel bridges for more than 60 years.  EXIM has helped finance the sale of over one hundred of these bridges to Sub-Saharan Africa.  Since the lapse of EXIM, Acrow’s competitors from China and Europe have been aggressively targeting Acrow’s African customers, emphasizing that while EXIM may not be there for American products, China’s export credit agencies will certainly be there to back Chinese bridges. 


We also heard from Susan Jaime, Founder of Ferra Coffee based in San Antonio.  Susan’s small coffee roaster employs about a dozen people and is relying on overseas sales to grow.  Susan utilizes EXIM to insure her exports and to make sure she gets paid.  Recently a Chinese firm approached her to buy her business.  They told her that EXIM couldn’t be there for her, but China EXIM could be if she sold.  Susan turned down the offer, but she did emphasize that EXIM Bank is the only entity that she can rely on to allow her company to grow and create more jobs.


Also at the meeting was Luis Arguello, Chairman & CEO, DemeTech; Susan Axelrod, President, Love & Quiches; Mary Howe, President, Howe Corporation; David Ickert, Vice President of Finance, AirTractor; Dan Roberts, President and General Manager, Manhasset Specialty Company; Jim Rutkowski, Jr., General Manager, Industrial Sales & Manufacturing; John “Trey” Winthrop, Vice President of Finance, Bob’s Red Mill; as well as Representative Maxine Waters, Representative Denny Heck, and Representative Gwen Moore; Mayor John Giles of Mesa, Ariz.; Mayor Sandy Stimpson of Mobile, Ala.; Valerie Jarrett, Senior Advisor to the President; Jeff Zients, Director of the National Economic Council; and Wanda Felton, Vice Chair of EXIM Bank.

I’m still hopeful that EXIM can get reauthorized so we can support great American success stories like Acrow and Ferra and thousands of others.  Without action, thousands of American small businesses will be left at a disadvantage to their foreign rivals and jobs that could have been created in the U.S. will instead be created thousands of miles away.

FPH


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Export-Import Bank of the United States
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