The U.S. Export-Import Bank, which ceased conducting new business in July after Congress refused to extend its charter, may be back in business this fall. And a relaunch of the bank that provides financing and loan guarantees for exported U.S. goods couldn’t come soon enough for a small Ridgefield company on the cusp of a very big sale to a Saudi Arabia construction contractor.
Burke Industrial Coatings, which sells anti-bacterial coatings used on deck rails and in commercial cooling systems, among other uses, is about to complete a sale of 40,000 gallons of its Silver Bullet coating. The anti-microbial coating will be used in air ventilation equipment at a huge new airplane maintenance facility in Saudi Arabia, said Jim Harris, president of the seven-employee company.
Even with a sale price that is significantly lower than the $12 million list price for the coating, the order is a big deal for a company that generally earns about $10 million annually. Harris expects to double the company’s core staffing, and it will take more than 100 contract manufacturing employees at U.S. industrial plants to fill the giant order.
But with the demise of the Ex-Im Bank, Harris is scrambling to make sure he can craft a transaction that won’t go awry. As part of its foray into foreign markets, his company had won approval to buy Ex-Im Bank insurance just before the bank lost its charter. Now, Harris is meeting with Umpqua Bank, the company’s banker, and others who are helping him close the deal without the insurance protection Ex-Im would have offered.
As companies large and small are adjusting to the loss of Ex-Im Bank services, there is new hope among its supporters that the bank can be brought back to life as early as this fall. On Friday, a majority of House members, including 40 Republicans, signed what is called a discharge petition to force the issue out of committee and onto the House floor. If the measure wins House approval, it heads to the Senate, where it will fall to Majority Leader Mitch McConnell, R-Ky., to decide whether to allow a vote. Sen. Patty Murray, D-Wash., said she wants Senate action on the bank.
“I have heard from so many small businesses in Southwest Washington and across the state who depend on the Ex-Im Bank’s support to ship their goods around the world and create jobs here at home, so I am going to keep pushing to get this over the finish line and signed into law,” she said in a statement.
While press accounts say the measure could come to a House vote Oct. 26, a spokeswoman for Rep. Jaime Herrera-Beutler, R-Camas, said no date had been set. Within the House, “enough members have expressed support to pass the bill,” said Amy Pennington, press secretary for Herrera-Beutler, who supports restoring bank funding.
“It’s important to note that there has been no cost to taxpayers; the initial down payment to establish the bank in 1934 has long since been paid back, and the Ex-Im Bank returned $1.1 billion to the Treasury last year,” Pennington said in an e-mail.
The obscure bank’s reauthorization has been a surprisingly volatile issue, given that the bank does not have a history of controversy. Ex-Im has faced attacks from free-market conservatives and other government critics. The opposition is fueled by Delta Air Lines, which has long contended that the Ex-Im Bank’s loan guarantees to overseas airlines for their purchase of Boeing jets gives its international competitors an unfair advantage.
“There’s always discussions around different definitions of corporate welfare, but I don’t recall in my three decades of trade-related activity that it had become an issue with Ex-Im,” said Scott Goodin, director of U.S. Commercial Service in Portland, which operates within the Department of Commerce.
Boeing has been the bank’s largest customer, and more than one-third of the $20.5 billion in Ex-Im financing approved during fiscal 2014 went toward commercial airplane transactions. But within the state, nearly 200 exporters, including 11 in Southwest Washington, were using Ex-Im Bank services this year. Most are small businesses.
Rick Goode, CEO of the Vancouver concrete products company Columbia Machine Inc., has been the local face of Ex-Im Bank users. Goode participated last summer in a White House roundtable hosted by U.S. Commerce Secretary Penny Pritzker at the invitation of Sen. Maria Cantwell, D-Wash., who had staged a press conference at Columbia Machine earlier in the summer.
Goode said his company doesn’t use Ex-Im Bank insurance and its foreign customers tap the bank’s financing only on a small percentage of sales. But he said the existence of the bank helps U.S. companies compete against companies from dozens of other nations that offer government-backed financing.
“We’ve always been able to say that we have Ex-Im financing,” he said. Not having that option “is just a competitive disadvantage,” he added.
Goode admits to frustration over the long-running controversy, particularly since the bank does not cost the government any money. “Every time I have a conversation about this, I think ‘Why are we having this conversation?’
“It’s just some hard-line conservatives trying go make a point out of it,” he said. “They are trying to take a level playing field and make it an unlevel playing field. It doesn’t make any sense.”