If the U.S. decides to stop subsidize Boeing’s exports, the company will find another country that will, according to a spokesperson.
Scott Scherer, head of regulatory strategy at Boeing Capital, told The Financial Times Sunday that Boeing would “not sit idly by” if Congress allows the Export-Import Bank’s charter to expire on June 30, as appears increasingly likely. (RELATED: Is the Export-Import Bank Done?)
“Boeing is not going to let itself be hurt by the lack of an Ex-Im Bank,” Scherer said. “If it means sourcing … to other countries who will support us we may have to look at that. Other countries have more aggressive export policies. We will find an alternative.”
Ex-Im provides financing to American exporters, mostly through loan guarantees. Supporters say the bank facilitates deals that the private sector cannot or will not finance on its own, but opponents claim its primary function is to provide corporate welfare in the form of subsidized loans.
Boeing factors significantly in the debate as the largest beneficiary of Ex-Im financing. In 2014, about 40 percent of all Ex-Im authorizations went to Boeing, compared with just 25 percent for all small businesses combined, according to research by Veronique de Rugy of the Mercatus Center.
“It is sad to see Boeing resort to fear mongering,” Heritage Action communications director Dan Holler told The Daily Caller News Foundation, noting that, “the company is on record that it will be able to adjust and thrive after Ex-Im begins winding down operations.”
Indeed, statements by Boeing and its customers indicate that the aircraft manufacturer would have little difficulty adjusting to Ex-Im’s potential closure. (RELATED: Boeing, Delta Square Off on Export-Import Bank)
In a filing with the Securities and Exchange Commission last June, for instance, Boeing stated that if Ex-Im were to close, or even just run out of funding authority sufficient to meet the demands of Boeing customers, “we may fund additional commitments and/or enter into new financing arrangements with customers.”
Moreover, an official for one of Boeing’s overseas customers, Dubai-based Emirates Air, told Reuters in September that the airline would have no trouble continuing to purchase Boeing planes in the absence of Ex-Im support.
“Ex-Im is not an exclusive tool for Emirates to finance the aircraft,” explained Hubert Frach, senior vice president for commercial operations in the West for Emirates Air. “Our aircraft are financed by various concepts.”
Holler offered a relatively straightforward interpretation of Frach’s comments. “Let’s be honest: the government of Dubai doesn’t need help from American taxpayers to buy Boeing airplanes,” he told TheDCNF.
Boeing’s outsourcing threat parallels similar comments made by David Joyce, president and CEO of GE Aviation, in an op-ed for the Cincinnati Enquirer last week. (RELATED: Aircraft Manufacturers Say Falling Sales Show Need for Ex-Im)
“The Ex-Im Bank is an essential ally,” Joyce wrote, pointing out that, “Almost 60 percent of GE Aviation’s revenues last year were generated from international sales.” Without Ex-Im, he implied, those sales could be lost to firms from one of the 59 other countries that have their own export-credit agencies.
Heritage Action CEO Michael Needham responded Monday with his own op-ed in which he claims that Joyce’s argument was disingenuous, because “just one-third of one percent (0.33 percent) of GE Aviation’s 2014 revenue was ‘supported’ by Ex-Im subsidies.”
Like other companies, Needham says, GE Aviation is required to file periodic reports with the SEC listing the most significant risks faced by the company. However, in its most recent such report, the company failed to include any mention of Ex-Im’s potential closure.
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