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First Ex-Im Casualty: Boeing Loses Deal Due To "Credit Woes"
Before Congress left town for the August recess, the Senate passed a three-month transportation spending bill designed to keep the Highway Trust Fund solvent for another 90 days. This means construction on roads and bridges didn’t immediately grind to a halt last Friday and it also means Congress - which recently has demonstrated a remarkable inability to legislate anything - will need to come to an agreement on a longer-term solution at the end of October. Expect that to be a fight, and one bone of contention will be the Export Import bank whose charter expired at the end of June.
The Depression-era institution provides financing for US exporters and their customers, and when the three-month Highway Trust Fund patch didn't include a rescue plan for the bank, beneficiaries were up in arms. "We’re at a loss how Congress can literally go on vacation and just say, 'Good luck, guys,'" Tyler Schroeder, a financial analyst at the Texas-based Air Tractor told Politico.
Conservatives - notably the Tea Party - claim the bank essentially represents a welfare program for corporations. Those corporations, the bank’s supporters argue, may move jobs overseas if the bank is relegated to the annals of history.
Boeing has been particularly vocal about its plans to go offshore.
"We’re actively considering now moving key pieces of our company to other countries, and we would’ve never considered that before this craziness on Ex-Im," chairman Jim McNerney said last Wednesday.
By the time he made that statement, McNerney had already been given a preview of what this "craziness" may mean for Boeing, because as Reuters reports, the company lost a deal worth "several hundred million dollars" in mid-July after the buyer backed out citing Export Import Bank concerns. Here’s more:
Boeing 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.
Boeing first announced the ABS contract in June, saying the new satellite, scheduled for delivery in 2017, would expand broadcast and enterprise services to Australia, New Zealand, the Middle East, Russia, South Asia and Southeast Asia.
GE last week said it was also taking steps to shift some manufacturing work overseas now that the bank will be shuttered at least until September.
So while opponents will likely continue to claim the private sector can step in to provide the same financing and assistance as that provided by the bank, and that ultimately, ExIm is nothing more than a "vast, well-funded network of consultants, lobbyists and big-government interest groups" (to quote Heritage Action Chief Executive Officer Michael Needham), those arguments aren't likely to go over well with workers who lose their jobs when the corporate management teams at Boeing and GE decide it's time to remind Congress of who is really in charge by laying off Americans and moving the jobs overseas, which is why suspect it's just a matter of time before the "bring back our jobs, bring back ExIm" rallies begin.
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I blame John Kerry for not being able to get a war properly started in Syria. Nice going.
Bill Clinton should have seen this coming....but he had other things coming on his mind....Monika Lewinski comes to mind.
June 26, 2015
Ex-Im Bank has received numerous questions about what will happen if its authorization is not extended. Naturally, we understand that this uncertainty is causing serious concern among businesses and their workers across the country as thousands of entrepreneurs try to make long-term plans to grow, hire, and invest in innovation.
A lapse in authority beginning on July 1, 2015, will mean the Bank and any of its delegated authority lenders cannot authorize any new transactions. All preexisting loans, guarantees, and insurance policies will continue in full force and effect. We will process and close all previously approved transactions, which will also continue in full force and effect according to their terms. The Bank will continue to manage all transactions in its portfolio until maturity, including issuing waivers and amendments (other than those which increase the Bank’s exposure).
We are fully appropriated through FY2015 and will be able to continue operating after July 1, 2015.
If you have any questions, please call your Ex-Im business representative or call 1-800-565-EXIM, or 202-565-EXIM.
http://www.exim.gov/lapse-information
...and the White House's commentary on the matter:
FACT SHEET: The Export-Import Bank: Supporting American Exports and American Workers in Every State Across the Country
Because Congress Failed to Act, the Export-Import Bank’s Authorization Lapses at Midnight for the First Time in History, Hurting Businesses and Workers in Every State
https://www.whitehouse.gov/the-press-office/2015/06/30/fact-sheet-export...
Our Competitors Will Fill the Void Left By Ex-Im’s Expiration
When Ex-Im lapses, China and other foreign rivals will pick up the slack, putting American businesses and American workers at a disadvantage. In fact, a senior official from one of China’s versions of the Export-Import Bank told reporters recently that Ex-Im going away would be “a good thing” for China.
_______________________________________________
The people should instead see Ex-Im for what it really is: The International Bank of Clinton.
Starting at the top: Ex-Im President Fred Hochberg was a President Bill Clinton appointee. He and his mother stayed in the White House (she got the Lincoln bedroom). Hochberg in 2008 was a "Hillraiser" — an elite class of bundlers who raised six figures for her failed presidential bid. Hochberg is also a five-figure donor to the Clinton Foundation.
The Clinton-Ex-Im revolving door is well used, as Bill Clinton acknowledged at the 2012 Ex-Im conference. "This audience is full of people who once worked for me," Clinton said, naming a handful of Clinton White House alumni who now worked at — or profited from — Ex-Im.
Clinton particularly praised Kevin Varney, who worked in the Clinton White House, then at Ex-Im. Now Varney is at Boeing, the top recipient of Ex-Im financing, along with Tim Keating — another old White House appointee that Bubba mentioned from the stage.
Does Ex-Im cover this deal as well?
http://www.bloomberg.com/news/articles/2015-06-17/boeing-s-747-jumbo-boosted-by-7-4-billion-order-from-russia
I find it more than just a little amusing and ironic that EX-IM Bank is where we finally decided to draw the line on corruption and corporate welfare. Absolutely astounding.
Assuming the drawn line isn't moved...
Kinda like the GMAC of the air.
MIC MIC MIC MIC MIC MIC MIC MIC MIC
Whooo, I am a little out of breath.
MIC MIC MIC MIC MIC MIC MIC MIC MIC
I hope I have made my point. Just like the banksters they do business with government but not satisfied with that, extort as much as possible from them.
The only goddam manufacturing left in the US is weapons manufacturing.
I bet if you shutdown Boeing, Lockheed, Grumman, Raytheon, America's ENEMIES would suffer more than America would. Figure it out.
I don't get what one has to do with the other. They wouldn't send jobs offshore to save money, if they did get cheap financing? "Gee, that financing sure helped our profitability this quarter. We're making enough now, no need to make more."
and yet: "(we) lost a contract worth several hundred million dollars last month"
does this sound like tarbaby bullshit to anyone else?
even if true, let Boeing leave and simply announce that you will Tariff the mickeyficken shit out of them on the way back in....
Eric Cantor and the Ex-Im......give us these two little wins.
It's not like we're leaving you with nothing.
I need Moar
"Bill Clinton should have seen this coming....but he had other things coming on his mind....Monika Lewinski comes to mind."
Monica sure saw Bill coming.
More welfare or else!
Bingo! Boeing and GE are two of the biggest welfare queens in US history.
Their threats to move 'american' jobs offshore ring hollow, as they've already done that. I think the only 'american' jobs left between them are comprised of the GE legal department, which writes the tax laws that congress rubber stamps.
And what exactly wll be gained by moving their operation off shore? Will their customers have better finance opportunities if Boeing vacates the US?
I agree with the notion of lost jobs being a political sledgehammer and little else.
I disagree with Boeing's, GE's, etc. reliance on the bank for financing commercial transactions. Boeing has a very healthy balance sheet. Why could the company not have funded the ABS satellite deal out of working capital and then collect on its A/R? This is the way other widget makers across the land have to do it. To boot, there are plenty of financing companies that take A/R as collateral...
Of course the short answer is: cost of capital. Boeing's chairman is worried his quarterly EPS would be (semi-)permanently impaired by a few pennies per share if Boeing had to self-finance large deals. Cry me a fuckin' river.
The only halfway decent defense of Ex-Im's existence is that "all the other kids are doing it." EU, China, etc. all have their own versions of Ex-Im, which give foreign-domiciled multinationals an advantage over Boeing et al. This is actually a legit concern if you want to preserve decent-paying American jobs at companies without AAA balance sheets.
"This is actually a legit concern if you want to preserve decent-paying American jobs"
There's other ways around that little problem than corruptly feeding our own little fatlings
"Good luck"
We are at the point where every American job must be bought and paid for by taxpayers...today and evermore.
bingo...Boeing represents some of America's Finest Fascists.
If you are hamstrung by credit woes, you can always try NSA blackmail
All this free money floating around and a customer can't find a couple hundred million worth of private money to borrow? If they can't get a loan for private money, why the hell would I want my tax dollars being loaned to them.
#losingbet
Perhaps ABS isn't such a good credit risk? So they're going to walk from Boeing...because everyone makes satellites and they'll just go down the street.
Why doesn't Boeing supply their own financing? GE does for jet engines and a lot of other stuff they make.
If this satellite was economically viable, someone would have financed it. Just saying.
.
Don't forget that Jeffrey Immelt is one of the fair-haired CEOs, and GE received huge amounts of free money from the gub'mint around 2009.
They also earned an "investment" from Warren Buffet the loan shark.
This.
Are you telling me they can't partner with a big bank to finance this deal? If a few basis points is enough to kill it, it didn't deserve life in the first place.
The price is super inflated to cover all the payouts and kick backs to keep the goon network going...
Big wheels needs a lot of grease.
Ex-Im Bank fits right into Perkins NSA Confessions of an Economic Hit Man.
Financing shit that third world countries do not need....at the end of a gun, blackmail or a bribe.
So, what's this have to do with Dancing With the Stars?
I'm calling bullshit on this. Boeing wants to continue suckling at the government teat.
"Boeing wants to continue suckling at the government teat."
More like a gay 69.
Boeing will suck any appendage of any pol or lobbyist. This is a real cunt org
Boeing will suck any appendage of any pol or lobbyist. This is a real cunt org
Boeing, GE, don't let the door hit you in the ass on the way out.
Fetch my violin...
The rich are the mortal enemy of the American People.
why do they still get this summer break? I don't get a summer break? WHo do they think they are - teachers??
I bet half of them don;t even know why the summer break was given to congress in the first place.. It's not like any of them are actually farmers doing a civic duty...
We all should get a month off paid in the summer. Or for us who don't worship the sun, in the autumn or winter.
So here I am. On the same side of this issue as the Tea Party. Politics makes strange bedfellows indeed.
I echo many of the above sentiments. This fascist piece of garbage must go away forever. If Boeing and GM are for it, then I'm against it.
Like they wouldn't offshore anyway. Hell, Let em go with the rest of the lunatic corporations that put profit ahead of loyalty to the nation and people that gave them their start.
Might as well impoverish the remaining 20% of Americans that still produce... As for the government,,, that POS,,, it's not worth the time to write about.
Go on vacation you assholes. Enjoy the fruits of the country you destroyed. Not to worry, Diebold will get you re-elected.
Hopefully I will live long enough to see you get your just rewards.
Never heard of the American Export Import Bank before until I read this thread!
That hole in the bucket your money disappears into.....now you know what to call it.
I ain't a US taxpayer.
Never mind just keep your head down and keep paying
I new very little about the EIB before reading this article, but right now I am 100% sure it is a complete fucking scam. Fuck Boeing.
Isn't the Export-Import Bank just a government guarantor of loans nobody in their right minds would make. Some yahoo country wants some 777s they don't have a chance in hell of paying for gets the loans and down the pike the US taxpayer gets screwed? Don't forget Boeing is a big, big supporter of Hillary.
American banks won't make the loans because it becomes much harder to collect bad debt from overseas. The government however does not have that problem in collecting the bad debt. All EX_IM participants are heavily screened before they are allowed to partipate in the program. I worked for a business who relied heavily on the program as most of their business was done in S. Korea. That business is no more since Ex-Im has been shut down.
The governement has never had to reach into it's pocket to cover bad loans from this program. It is dead now simply because most people do not understand it. We live in very stupid times.
slightly, soo sorry your raping american jobs to s korea is doing poorly..funny we have been propagandized how off shoring is just economic destiny, that it should depend on fiat from the fed via EIB, for your business er racket to thrive...and for covering bad loans? you mean like AIG and GS and 2008 bailouts, .gov / fed never reached into it's pocket that's what printers are for..cut your throat and bleed you shit.
Fuck everyone of these unamerican companies searching wage arbitrage. Fuck you
Exactly. It's like the Fannie Mae of foreign corporations. That's another program that was supposed to be revenue neutral (or even revenue producing). All these programs are amazingly helpful...until they aren't.
I think of IEBank as a big fire hydrant to gush fed printed fiat to a select few, you know the first in line at CBanks windows- and a wonderful tool to funnel to favored business - coal co's need not apply.
They have a "program" to bail out everyone except the taxpayers...
Remember what Carlin said, it's a club and you're not in it.
Go ahead, move those jobs overseas. Also, don't forget that defense spending cuts and revisions are always possible.
This is absolutely bullshit. No way the buyer cancels the order due to Boeing getting financing from ExIm. Only Boeing would cause this deal to go south tomake a point.
E-zactly. This is about leverage.
Another reason why I like and support Bernie Sanders for President.
http://www.sanders.senate.gov/newsroom/press-releases/sanders-votes-agai...
And not Corporate Shillary.
http://dailysignal.com/2015/05/22/hillary-clinton-announces-support-for-...
Yep, let's put a Jew in the White (shit) house so the takeover of Amurikka can be complete.
/SARCASM
Well, all of those WASPs we've had have done so well for us, haven't they?
Twit.
Realize those who pull the strings of the WASP puppets you speak of.
Ignorant dolt, how's that for an ad hominem attack for you?
EDIT: Don't forget we've had the HAAMC (Half African American Muslim Communist) for the past 6 1/2 years! Not a WASP yet still the same results. Critical think much?
And I'm not Shitlery fan either.
In the words of Bugs Bunny.....what a ma..roon!
Let them eat credit default swaps.
The world has never been more flooded with easy money. If they can't find any lender but Uncle Sucker the deal makes no sense and would be doomed to leaving taxpayers on the hook.
Send a black ops team to Boeing executive staff and have a conversation. It's what more developed banana republics do. Then just as a reminder, Any monkey business and your kid gets a flu shot.
Send a black ops team to Boeing executive staff and have a conversation. It's what more developed banana republics do. Then just as a reminder, Any monkey business and your kid gets a flu shot.
Can someone explain how residing offshore will help Boeing's clients finance their purchases. That is just a tad puzzling. So it sounds like Boeing would simply prefer to remain on the government teat of cheap credit... thereby remaining part of the whole international finance problem.
You morons don't understand that it's not the private sector that must step up to finance these huge orders... it's other governments that will step up... as long as the manufacturing takes place in their country. You like capitalism. Welcome to the 21'st century version.
Wanna bet the the Boeing exective cadre housed in Chicago will stay in the USA?
If they're going, kick them ALL out.
Maybe there will be less messing around with our political system on state as well as federal levels
with these welfare suckers out of the country.
"Moving American jobs overseas" is a bit of a faulty impression of what really happens, because you are moving the jobs, but not moving the Americans.
McNerney at Boeing was the genius that offshored the engineering of Boeing 787 components as well as the manufacturer with the result of the sub-assemblies not fitting together at final assembly. It took manufacturing engineers years of working overtime and weekends and holidays to get his mess straightened out. When all was done Boeing had a massive layoff of the manufacturing engineers that had just saved the program. A lot of the engineering jobs that were left have been shipped to Charleston, SC., and St. Louis, Mo. Engineers in Seattle are (sometimes) given the opportunity to apply and interview for their old job at the new location. Their new job pays much less and has less benefits, and how the engineer moves his family is up to him if he gets the job.
+1
Engineers in aerospace get f***ed over massively while the union line guys and top management get all the perks.
I am amazed that the engineers were able to "fix" the 787. If it was a normal company, without endless defense contracts, the 787 probably would have sunk the company.
Satellites? This is not a commodity. Financing probably has little to do with this.
More likely is a strong USD with a weak Euro. Call Boeing out on this.
Our corrupt leaders create policies that precipitate crisis's which can only be addresses through a more greatly enhanced corruption. They are destroying anything that might look like a free market...to save it (while they and their buds get filthy rich). The monopolization of power through the force of LAW.
A President with any nut sack would advise Boeing and GE that if they tried any BS like moving more ops overseas... their companies would be nationalized and sold to another AMERICAN group. They would also be forced, along with ALL major companies... to return ALL manufacturing jobs to the USA within 1 year.
Sure...that will scare them! Those running the corporations could give lass than a shit what becomes of them. They are planning their exit strategy from the day they take their seat of power. Stock buybacks, gutting their companies. THEY DON'T CARE. It is OUR GOVERNMENT who has created this disaster, so to hand them the keys is fait accompli.
Congress did something right here. As subsidies end it will hurt some short term but the markets need to normalize. Lobbying is the #1 problem in the country. Some say the Federal Feserve as #1 issue but Congress can end the Fed whenever they want. Lobbying must be made illegal to have a sound Republic.
And yeah the Fed should be nationalized so the currency is public. We now have over 300 years over history showing far more cons than pros by having a private central bank like the Fed manage money supply and interest rates.
GE and Boeing can fuck off. They outsourced the jobs anyways. Its an empty threat. In an unstable world where governments have to restructure and will always choose themselves in the survival pecking order, where are these companies going to go?
NO, lobbying is not the problem, it is a response, a symptom of the underlying problem, which is government involvement in business. It is the fact that our government has become absolutely integrated into every aspect of business that drives business to seek influence over them. Bribery, yes. But the solution is not to take away influence, it is to punish those accepting bribes. This is not a hard thing to do. We see it every day. It is exactly like illegal immigration where all that is lacked is the enforcement of laws, basic and well understood laws. Instead we see people like the Clintons just raking it in and NO ONE will prosecute them. And look at how they refuse to even pass insider trading restrictions upon themselves. They are blatant in their corruption.
The system is corrupt and there will always be those trying to buy influence. The answer is to remove government power to effect financial outcomes of business and individuals. It is madness to suggest that businesses, many of which are taxed to the heavens, are not allowed to attempt to influence the legislations that directly effect them. Take away our guns for the same reason, right? If we are to fight violence we should look for the causes. Remove the incentives for anyone to try and influence our government, except on grounds of principles and not profit.
There are no good guys in this. We are living in a corrupt world, and if we are to succeed, we are forced to enter the arena that is filled to the rim with corruption. To resist and remove yourself from it is laudable, but far from profitable, and how far down the economic ladder are you willing to go to maintain your principles and values? The answer is to take the power...the temptation away from them. Our constitution gave them very limited power to intercede in business. They have usurped and amended the constitution...always as a response to some crisis of which they had a major hand in, to save us. The commerce clause comes to mind as a camel's nose under the tent if there ever was one.
Lets fix this, not by taking more power away from private individuals and businesses, but instead take it away from our government...who has basically stolen their power, using force, threat and coercion.
"Government is not reason; it is not eloquence; it is force! Like fire, it is
a dangerous servant and a fearful master." -- George Washington
I am so enjoying this charade of American and world capitalism being exposed for the CHARADE it is. Like a snake it is starting to eat its own tail. Dwight D. Eisenhower exit speech on Jan.17,1961. Warning the plebs to beware the Military Industrial Complex. The Americans were told, but instead they have become brainwashed and distracted, into believing welfare queens only exist in the inner cities and trailer parks. Companies like Boeing, G.E, Lockheed Martin et al, have been the biggest parasites and welfare queens sucking on the teats of the states to have ever existed. But they don't count. This industry by its very nature needs agitation and conflicts to survive and hence the trouble caused by the U.S around the globe can be seen in some context.
We all know Obama will acquiesce to their demands. No president post John F Kennedy, has had the balls to say no to the MIC, or Banks. More welfare for Boeing and it doesn't matter if it was a Republican, or Democrat in office. The answer would be the same. Lets keep stroking them tax-payer teats and anyone who objects is a socialist pinko-unAmerican-commie. Gulp Gulp! “That minimum wage tax payer handout sure tastes good”, said the Boeing executive, from his $30 million Manhattan balcony, whilst sipping a $12000, 1920 Bordeaux. To allow this situation to arise falls squarely on the shoulders of Middle America and such fools deserve to be eviscerated and thankfully the banks and big business is taking care of that. The banks and their monetary policy have Kept wages falling and their standard of living since 1973 and Middle America blame the American poor for it. Fucking Retads!
There are plenty of wealthy Progressives who could fund an IM-like "bank". It's time to privatize that mess, if it really is something of value. Get off the public dole. Get a little pocket change from Bill Gates. Larry Ellison, Warren Buffet, Elon Musk (the list is endless). In 15 minutes a small group of those people could set up something with a pot of cash just as large (and unending). Let them show us it is a "good deal". If nobody is willing to do that privately then I think that tells everybody something important...
Just as they could easily fund their progressive social programs yet resist taxation at every turn and insist these policies remain "publicly funded". They set up massive trusts, supposedly to remedy many of the social problems of the world, yet mostly outside of America, and always under their own tight control and discretion. Nothing like what they demand of we taxpayers, being forcibly robbed of our earning with threats of imprisonment, with NO say in how our expropriated funds are spent...actually they are spent for virtually everything WE don't want, but obviously in our best interests whether we appreciate it or not!
lemme see if I have this straight: Boeing, who receives tax dollars from me (albeit indirectly) in the form of credit issued to its customers so that its customer can buy its stuff, will throw a hissy fit and offshore jobs and operations if said tax dollars go away.
I guess someone needs to do a good ole cost-benefit analysis to see if the tax revenue gained from not giving that money to the ex-im is greater than the tax revenue lost to Boeing moving ops and jobs offshore. Simple really.
TPTB are not particularly good with math. I have been arguing this for years with the Chamber of Commerce. They have been pushing trade deals for an eternity, bragging about their huge gains, yet we see our trade situation continually worsening. Look at today's numbers. Every trade deal has winners...winners predetermined by the trade deal. There have obviously been lots more losers but they have no say with the Chamber....or government. Smart people looking out for us. Besides, they were all jobs that we are told we are too good for anyway. Good riddance, right?
Where do I sign up for my benefits??
Fascism is hot until y'all run out of other peoples money
The Government of the United States of America cannot support the RISK on loans to EM due to the fact that the United States of America is presently shorting the FUCK out of EM, motherfuckers. This means that ExIm rallying won't have any demonstrable effect on USA decision making given that these dudes know that that would be sending good money after bad. This means that GE et al can take a long walk off a short peer until their collective hats start to float.
Sorry McNerdly, if the deal needed government subsidized financing, it should not happen! Curious. Why doesn't Boeing carry it's own paper???