Some good news for supporters of the Export Import Bank, a group that includes a number of aerospace companies that use the institution to help finance their overseas sales.
Senate and House of Representatives negotiators reached agreement on Tuesday on a $305 billion, five-year transportation bill that would fund roads, bridges and mass transit, while also reviving the embattled Export-Import Bank.
The legislation would renew the EXIM Bank’s charter through Sept. 30, 2019, after it expired on June 30 in the face of conservative opposition.
The measure to revive the bank, which helps Boeing Co and other companies with foreign competitors, has wide support in Congress. The agreement would reduce EXIM’s total lending limit by $5 billion to $135 billion and provide a number of reforms aimed at improving transparency and governance.
Statement by Aerospace Industries Association President and CEO David F. Melcher on the passage in the House of a bill reauthorizing the Export Import Bank of the United States.
ARLINGTON, Va. (Oct. 28, 2015) — Today’s passage of Rep. Fincher’s (R-Tenn.) bill in the House marks an important step in reauthorizing the Export Import Bank of the United States. The ExIm Bank is a valuable tool supporting exports in the aerospace and defense industry – the leading export industry in the U.S. manufacturing sector with a trade surplus of nearly $62 billion. We are relieved that common sense has prevailed and the majority has found a way – even using the unconventional “discharge” process – to express its will.
Statement by Aerospace Industries Association President and CEO David F. Melcher on the passage of a discharge petition allowing Congress to hold a vote to reauthorize the Export Import Bank of the United States.
Arlington, Va. — We are delighted with today’s passage of a discharge petition on Rep. Fincher’s (R-Tenn.) bill reauthorizing the Export Import Bank of the United States. The ExIm Bank is a valuable tool supporting exports in the aerospace and defense industry – the leading export industry in the U.S. manufacturing sector with a trade surplus of nearly $62 billion.
So far, American companies have lost three space payload orders, billions of dollars in American commercial airplane sales are at risk, and several companies are talking about moving operations overseas – all because ExIm Bank financing has not been available since July 1. Enough is enough – Congress must hold the vote and reauthorize the Export-Import Bank.
WASHINGTON, D.C., October 6, 2015 (SIA PR) – Satellite Industry Association (SIA) President Tom Stroup today issued the following statement urging Congress to reauthorize the Export-Import Bank of the United States:
“As lost opportunities for domestic commercial satellite manufacturers continue to mount, SIA urges Congressional leadership to reauthorize the Export-Import Bank of the United States (Ex-Im Bank). Without Ex-Im Bank, U.S. commercial satellite manufacturers are increasingly uncompetitive in a global marketplace where foreign buyers account for roughly 75 percent of all commercial satellite sales.
ARLINGTON, Va. (AIA PR) — With the news today that a $1.1 billion order for Boeing jetliners by a South African airline is at risk of cancellation, and the recent announcements of three lost U.S. commercial satellite sales, it is clear that the failure of Congress to re-authorize the U.S. Export-Import Bank is causing the American aerospace industry to lose ground against its foreign competitors, and potentially thousands of workers to lose their jobs.
U.S. companies large and small have been telling members of Congress for months now that overseas customers are going to buy from foreign competitors in the absence of ExIm Bank financing. This is because our industry faces direct competition from other countries that also offer credit financing. By having our own credit financing, we had a level playing field to compete – and when the playing field is level, no competitor stands against the quality of a U.S. made aerospace product. It is incredibly frustrating that all of our warnings have been ignored, and that an ideologically extreme minority can force delay and inaction.
The purchase and payment lead times in our industry are long, and the clock is ticking. The price for delay of the vote to re-authorize the ExIm Bank is going up every second, and our nation will ultimately bear the cost. Hold the vote and reauthorize the Export-Import Bank!
Boeing Co (BA.N) is scrambling to find alternate financing for a satellite contract worth “several hundred million dollars” that was scuttled by privately held commercial satellite provider ABS due to uncertainty about the future of the U.S. Export-Import Bank, three sources familiar with the matter said on Tuesday.
ABS, based in Bermuda and Hong Kong, terminated its order for the satellite in mid-July, citing the expiration of the trade bank’s charter on June 30, according to the sources, who asked not to be named given the sensitivity of the issue.
The termination marks the first known casualty of the ongoing congressional debate over the future of the trade bank, which lends money to U.S. exporters and their foreign customers.
ABS told Boeing, the largest U.S. exporter, that it would have to consider non-U.S.-based producers to build ABS-8, given the absence of U.S. export credit financing, the sources said.
Statement by Aerospace Industries Association President and CEO David F. Melcher on the Senate passage of the Transportation Bill with Ex-Im Bank Amendment.
Arlington, Va. — The Aerospace Industries Association is very pleased that the Senate has attached an amendment reauthorizing the Export-Import Bank of the United States to the Transportation bill that passed the Senate today. Ex-Im Bank supports roughly 164,000 American jobs across the United States and is an important tool in enabling U.S. exporters to remain competitive in the global marketplace. The aerospace and defense industry is the single largest net exporter among American manufacturers, but we compete against foreign companies receiving much greater support from their home governments, including direct subsidies. Ex-Im Bank helps offset that foreign advantage.
The vote for the Ex-Im Bank amendment demonstrates the majority support reauthorization enjoys in the Senate; that strong support is mirrored in the House of Representatives. We strongly urge the House to include the Senate Ex-Im language and put an end to the acrimonious and unnecessary debate over reauthorization of an institution that House Republicans voted overwhelmingly to reauthorize only two years ago. Enough damage has been done to American businesses at the behest of a small but vocal minority in the House.
Legislators return to work on Monday after their traditional August recess. The House has only 12 working days until it adjourns on Oct. 2 for a six-week break. That recess is needed so representatives can return home to campaign for re-election based on their stellar records of achievement.
With much to do and little time, legislators are expected to pass a continuing resolution that will keep the government operating for a few more months based on the current budget. Foust reports that NASA is unlikely to have a new budget until at least December, and most likely sometime in 2015.
On the plus side, it appears unlikely the government will be shut down again as it was last year when legislators and the White House could not agree on a continuing resolution.
Legislators have a number of other space-related measures to consider, including amendments to the Commercial Space Launch Act, the American Space Technology for Exploring Resource Opportunities in Deep Space (ASTEROIDS) Act, and re-authorization of the Export-Import Bank.
No progress is expected on any of these measures until after the election. In fact, action is likely to be delayed until after the next Congress convenes in January.
Jeff Foust has an interesting analysis about efforts by Rep. Kevin McCarthy (R-Calif.) to prevent the re-authorization of the Export-Import (Ex-Im) Bank of the United States, which has helped to finance the exports of a number of commercial space companies.
Although McCarthy has introduced legislation to streamline commercial spaceflight regulations for commercial spaceflight companies that have yet to fly any passengers, he views government-backed financing of exports that has helped profitable space companies as unnecessary.
In an interview on “Fox News Sunday,” McCarthy said he would vote against reauthorization of Export-Import (Ex-Im) Bank of the United States, which supports financing of exports of products and services created by U.S. companies.
Together with Ex-Im Reauthorization later this year, the Interim Final Rule will open the door to increased international space-related sales.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey
Arlington, Va. — The Aerospace Industries Association applauds the Administration’s issuance of revisions to Category XV of the U.S. Munitions List (USML) that will end excessive restrictions on space systems like commercial satellites and related articles. After a six month delayed implementation, the interim final rule will remove many of these less sensitive technologies from the USML and place them under the more appropriate controls of the Commerce Control List.
Suborbital spaceflight provider Virgin Galactic is bringing on Cozen O’Connor Public Strategies to lobby on issues related to Export-Import Bank financing and export control of suborbital spaceflight. Virgin Galactic is a company within Richard Branson’s Virgin Group, dedicated to the future of the space tourism industry. Howard Schweitzer, a former general counsel for Export-Import Bank, will lobby for Cozen O’Connor. Virgin Galactic hasn’t had a registered lobbyist since 2009, when it ended a five-year run with Alston & Bird.
Looks like Virgin Galactic will be seeking Ex-Im financing for its foreign sales and wants to make sure there are no export barriers to those deals.