The future of thousands of American jobs is uncertain. Those jobs are tied to companies that depend on exporting, but the culprit isn’t overseas. Our own government holds the future of these workers in its hands as it considers the reauthorization of Ex-Im Bank.
Most Americans probably aren’t familiar with Ex-Im Bank. It’s not the typical depository you see advertised on television touting a smiling family purchasing a new home. Ex-Im Bank is a small federal agency that enables U.S. companies, including small and medium-sized businesses, to sell their products in global markets. Several of these companies are located right here in Wilmington, including Wilmington Machinery, Chemtex International, GE Aviation and many more. That means some of those jobs in the government’s hands may belong to your family or neighbors.
Ex-Im Bank bridges the gap in financing for U.S. exports to developing countries where commercial-bank financing is unavailable or insufficient. Why is this important? Without that financing, exports would decrease. Fewer exports mean fewer jobs, at a time when we need to grow the American economy.
On June 30, 2015, the charter for Ex-Im Bank will expire unless Congress renews the program. There are numerous reasons why Ex-Im is a good program that deserves reauthorization, including:
- In fiscal year 2014, Ex-Im returned $674.7 million to the U.S. Treasury after covering all its expenses. Since 1990, Ex-Im has returned to the Treasury $7 billion more than it has received in appropriations for program and administrative costs.
- Out of more than 3,700 authorizations in 2014, more than 3,300 – or nearly 90 percent – directly served U.S. small businesses, which accounted for one quarter of authorizations by dollar volume.
- Borrowers have defaulted on less than 2 percent of all loans backed by Ex-Im since its inception in 1934, a default rate lower than commercial banks.
- In fiscal year 2014, Ex-Im supported the purchase of $27.5 billion worth of exports that created or sustained approximately 164,000 U.S. jobs.
As a chamber executive, I am routinely approached by area business leaders who are concerned about a particular cause. In this case, I was pleased to find that one of the strongest local voices touting the reauthorization of Ex-Im Bank is Jason Swinny, the Wilmington plant leader at GE Aviation. Jason has taken a leadership role in educating our federal delegation about the impact Ex-Im has in our area, particularly for the small businesses that serve as contractors for GE Aviation. He recently wrote a compelling editorial that states the case from the perspective of someone who feels the results of Ex-Im’s work every day:
As a resident of Wilmington, I'm proud of what GE Aviation means to this community. We employ more than 1,500 workers across the state with locations in West Jefferson, Asheville, Durham and Wilmington. Of my 16 years at GE, I've spent 11 of them in North Carolina. Just last June, we announced that we are investing in all four of our facilities. Since 2012, we've invested $50 million at the GE Aviation facility in New Hanover County and have committed to add 35 new jobs by 2017. This growth is driven by strong overseas demand for the equipment that we manufacture here.
Last year, 58 percent of our revenue was generated by international sales. Over the next decade, this trend will continue. If you look at our order book, which extends out past 2020, international orders represent 75 percent of the total value. We build it here and sell it there – and we want to keep it that way.
We need every tool possible to compete globally. One of those tools is the U.S. Export-Import Bank, or Ex-Im. Right now in Washington, there is a political debate around the future of Ex-Im. The outcome of that debate will have a real-world impact on our plant and this community.
Opponents of the bank are ignoring realities of global competition, and are pursuing their political objectives at the expense of American manufacturers. Small, medium and large companies are being threatened by politics that could negatively impact jobs and exports.
Ex-Im's role is pretty simple. Chartered by the U.S. government, the bank provides financing tools to international buyers of American-made products. Often, this support takes the form of a loan guarantee, supporting the ability of commercial banks like PNC, Wells Fargo or Bank of America to provide loans to international customers of U.S. goods.
In other cases, Ex-Im provides direct loans to those same types of customers, often in developing economies like Latin America or sub-Saharan Africa.
Ex-Im fills gaps where private, commercial banks can't operate. Just like a commercial bank, Ex-Im charges fees for its services. Its income is sufficient to cover all its costs and its default rates are extremely low; in fact, last year, it returned about $1 billion to the U.S. Treasury.
My teams work day in and day out to make sure that we get as much work as possible at our plant – this means safely delivering on time, on cost and on quality.
As we compete for work at this plant to keep GE Aviation in Wilmington competitive, we ask is that our elected leaders do the same. Give U.S. manufacturers the tools they need to compete in a global marketplace; Ex-Im is just one of many.
We are very proud of the superiority of our technology, but without competitive financing, we will lose to our foreign competition. It is that simple.
We can't afford to have Ex-Im fail; we must allow our exporters to compete and win.
When government officials become more concerned about their "rankings" by well-funded political action groups and ideological "D.C. think tanks" than they are about the well-being of the constituents in their districts, it's time to call on them to reconsider their priorities.
Swinny is just one of many locally who have stepped forward to draw attention to this issue. The Wilmington Chamber has signed a letter from the U.S. Chamber supporting the reauthorization of Ex-Im Bank. Please join us by contacting our federal delegation (congressman and senators) to express your support. You can easily do so by visiting the Exporters for Ex-Im website
and clicking on one of the "take action" links.
Please act today to let our legislators know you think saving these local jobs is important. Congress will be considering the reauthorization of Ex-Im Bank in the coming days, before its charter expires on June 30.
The Wilmington Chamber of Commerce is the largest membership-based business association in Southeastern North Carolina. The Chamber’s mission is to ensure economic prosperity throughout our region. This is accomplished by: creating a diverse, inclusive organization that serves as a strong voice for businesses in the Greater Wilmington area; offering unique membership benefits, services and education; and challenging government officials to address long term community and business interests.