Published March 19, 2012
With eight out of every 10 planes Boeing builds at its new plant in North Charleston headed to foreign customers, Sen. Lindsey Graham, R-S.C., said today it’s important for him to support legislation backing reauthorization of the Federal Export-Import Bank.
The bank, which is self-financing and backs loans that help U.S. firms sell goods overseas, has wound up in the crosshairs of some conservatives in Congress who think the government shouldn’t be in the business of offering loan guarantees.
“This is not a bailout,” the state’s senior senator said. “This is a financing mechanism that will allow transactions to take place between American manufacturers and certain overseas markets. And, those markets are being aggressively pursued by other countries.”
The bank, which was created by executive order in 1934 at the depths of the Great Depression, is up for re-authorization. Advocates also want to raise its cap on loan guarantees — which presently is $100 billion — by 40%.
A vote could take place as early as Tuesday, Graham said.
Such measures usually have not drawn much attention, but this year various factions in Congress are trying to torpedo the bank.
Without the bank, the future of Boeing in South Carolina is in jeopardy, Graham said.
“Long story short, if ex-im banking goes away in America, that ability for a Boeing, a GE and small businesses in our state to get market share in international markets is going to be destroyed,” Graham said. “It means that growth of Boeing in South Carolina ceases to exist.”
In January 2006, Air India signed an order agreement for 68 Boeing commercial jets, the single largest commercial airplane order in India’s civil aviation history, with a value of more than $11 billion at list prices, according to a Boeing press release. The order included 27 787-8 Dreamliners, which are built at the North Charleston plant.
Boeing directly employs more than 6,000 people in South Carolina and has $700 million worth of contracts with 250 S.C. suppliers, Jim McNerney, Boeing president and CEO, said in a letter to Graham.
Without the support of the Export-Import Bank, “many of our customers will choose to purchase airplanes from Airbus, made in Europe, built by European labor, sold with the aggressive banking of multiple European export credit agencies,” McNerney said.
While he supports the concept of open markets, Graham said the Export-Import Bank helps level the playing field for U.S. firms selling products overseas — especially in emerging markets where traditional banks and financing do not exist.
He also noted that approximately 80% of companies that use the agency are classified as small businesses.
Graham added that U.S. manufacturers would be at a disadvantage against competitors in other countries.
“I would love a world without ex-im banks, but that world does not exist,” Graham said.