Boeing CEO Dennis Muilenburg urges Trump to keep Ex-Im Bank or risk losing foreign sales
Boeing CEO Dennis Muilenburg urged the new Republican administration of President-elect Donald Trump to preserve and reopen, not abolish the U.S. government's Export-Import Bank.
Muilenburg said if Trump gets rid of the Ex-Im Bank, as he vowed to during the 2016 election campaign, Chicago-based Boeing (NYSE: BA), a maker of commercial and military jet aircraft, will lose foreign customers — and big contracts — to rivals in other countries, including Airbus.
Boeing CEO Dennis Muilenburg says 75 percent of the aircraft maker's order backlog now comes from outside of the United States, more than double the figure such orders represented in 2000.
Enlarge
Boeing CEO Dennis Muilenburg says 75 percent of the aircraft maker's order backlog now… more
DANIEL ACKER / BLOOMBERG
That could put more than 1.5 million aerospace industry jobs in the U.S. at risk, the Boeing CEO suggested in a major public policy speech to the Illinois Manufacturers' Association in Chicago on Friday.
"Many of our customers look to Ex-Im when they can’t secure financing in the commercial market," Muilenburg explained to the audience. "If international customers of tractors, turbines, airplanes or satellites can’t get financing from the United States, they’ll simply take their business elsewhere to one of the dozens of other countries with similar export-credit assistance."
The Ex-Im Bank provides billions of dollars in financing and loan guarantees to many foreign buyers of Boeing commercial airplanes. Boeing alone received at least $5.4 billion in loan guarantees from the bank in fiscal 2015, according to an analysis by George Mason University— Mercatus Center.
A supermajority in Congress voted to fully reauthorize the bank just over a year ago. But the Ex-Im Bank remains effectively closed for big customers like Boeing because it lacks a quorum on its board, which prevents it from approving new financing for sales of more than $10 million.
During the campaign, Trump said he doesn't support Ex-Im Bank, created in 1934. He also questioned its existence in an interview with the The National Review in 2015.
“I don’t like it because I don’t think it’s necessary. It’s a one-way street also. It’s sort of a feather bedding for politicians and others, and a few companies. And these are companies that can do very well without it ... I think it’s a lot of excess baggage,” Trump told the magazine.
Muilenburg suggested Trump is mistaken, describing the Ex-Im Bank as one of "the tools" companies like Boeing need "to compete in the global economy."
In 2000, only about 35 percent of Boeing's commercial order backlog was from customers outside the U.S., Muilenburg said.
"Today, that number is nearly 75 percent," he said.
"Last year, we delivered 495 737s from our factory in Renton, Washington, to customers around the world," he continued.
One in every three of those 737s were bound for China, Muilenburg said, and about a quarter of all of the company's airplane deliveries last year — including wide bodies such as the 787 Dreamliner, 777 and 747 — were bound for Chinese customers.
"This phenomenon would have been unimaginable when I started at the company in 1985," he said.
Ex-Im Bank helped Boeing secure several huge Chinese deals, including $1.43 billion in loan guarantees in 2014 and 2015 for jet sales to three airlines: Hainan, China Eastern and China Southern airlines, public documents show.
He also outlined other key public policy issues he said will impact Boeing and the aerospace and manufacturing industries in 2017, including free and fair global trade, increased defense spending, and business tax and regulatory reform. He urged companies and CEOs to make their voices heard in Washington, D.C.
http://www.bizjournals.com/seattle/news/2016/...-keep.html
Boeing CEO Dennis Muilenburg urged the new Republican administration of President-elect Donald Trump to preserve and reopen, not abolish the U.S. government's Export-Import Bank.
Muilenburg said if Trump gets rid of the Ex-Im Bank, as he vowed to during the 2016 election campaign, Chicago-based Boeing (NYSE: BA), a maker of commercial and military jet aircraft, will lose foreign customers — and big contracts — to rivals in other countries, including Airbus.
Boeing CEO Dennis Muilenburg says 75 percent of the aircraft maker's order backlog now comes from outside of the United States, more than double the figure such orders represented in 2000.
Enlarge
Boeing CEO Dennis Muilenburg says 75 percent of the aircraft maker's order backlog now… more
DANIEL ACKER / BLOOMBERG
That could put more than 1.5 million aerospace industry jobs in the U.S. at risk, the Boeing CEO suggested in a major public policy speech to the Illinois Manufacturers' Association in Chicago on Friday.
"Many of our customers look to Ex-Im when they can’t secure financing in the commercial market," Muilenburg explained to the audience. "If international customers of tractors, turbines, airplanes or satellites can’t get financing from the United States, they’ll simply take their business elsewhere to one of the dozens of other countries with similar export-credit assistance."
The Ex-Im Bank provides billions of dollars in financing and loan guarantees to many foreign buyers of Boeing commercial airplanes. Boeing alone received at least $5.4 billion in loan guarantees from the bank in fiscal 2015, according to an analysis by George Mason University— Mercatus Center.
A supermajority in Congress voted to fully reauthorize the bank just over a year ago. But the Ex-Im Bank remains effectively closed for big customers like Boeing because it lacks a quorum on its board, which prevents it from approving new financing for sales of more than $10 million.
During the campaign, Trump said he doesn't support Ex-Im Bank, created in 1934. He also questioned its existence in an interview with the The National Review in 2015.
“I don’t like it because I don’t think it’s necessary. It’s a one-way street also. It’s sort of a feather bedding for politicians and others, and a few companies. And these are companies that can do very well without it ... I think it’s a lot of excess baggage,” Trump told the magazine.
Muilenburg suggested Trump is mistaken, describing the Ex-Im Bank as one of "the tools" companies like Boeing need "to compete in the global economy."
In 2000, only about 35 percent of Boeing's commercial order backlog was from customers outside the U.S., Muilenburg said.
"Today, that number is nearly 75 percent," he said.
"Last year, we delivered 495 737s from our factory in Renton, Washington, to customers around the world," he continued.
One in every three of those 737s were bound for China, Muilenburg said, and about a quarter of all of the company's airplane deliveries last year — including wide bodies such as the 787 Dreamliner, 777 and 747 — were bound for Chinese customers.
"This phenomenon would have been unimaginable when I started at the company in 1985," he said.
Ex-Im Bank helped Boeing secure several huge Chinese deals, including $1.43 billion in loan guarantees in 2014 and 2015 for jet sales to three airlines: Hainan, China Eastern and China Southern airlines, public documents show.
He also outlined other key public policy issues he said will impact Boeing and the aerospace and manufacturing industries in 2017, including free and fair global trade, increased defense spending, and business tax and regulatory reform. He urged companies and CEOs to make their voices heard in Washington, D.C.
http://www.bizjournals.com/seattle/news/2016/...-keep.html
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