Too Good Being Boeing?
During 2007 and 2008, almost $10 billion of the $15.3 billion in long-term loan guarantees made by the federal Export-Import Bank were used for purchases of Boeing-made commercial aircraft, according to a Subsidyscope analysis by the independent Pew Charitable Trusts.
The Export-Import Bank (Ex-Im) is the official government agency assigned to subsidize U.S. exports of goods and services to other nations. According to its charter the work of the Ex-Im is to contribute to the employment of U.S. workers through the provision of direct loans, loan guarantees, working capital guarantees, and export credit insurance to finance and promote U.S. exports abroad. "Ex-Im Bank enables U.S. companies -- large and small -- to turn export opportunities into real sales that help to maintain and create U.S. jobs and contribute to a stronger national economy," states the Ex-Im mission statement.
"The Export-Import Bank helps many American companies be more competitive in the international marketplace," said Marcus Peacock, director of the Pew Trusts' Subsidyscope in press release. "But it is interesting to see such significant support going to a profitable private enterprise."
According to the Subsidyscope analysis, Ex-Im issued long-term guarantees on $8.1 billion in loans made by banks in 23 countries during 2008. Of this amount, nearly $5.5 billion, or 67 percent, supported the sale of Boeing airplanes in nations such as Brazil, Canada, Ireland and the United Arab Emirates, the four largest recipients. In 2007, loans for Boeing aircraft accounted for $4.5 billion, or 62 percent, of $7.2 billion in long-term guarantees. Sales to foreign customers accounted to 40 percent of Boeing's 2008 revenues.
Boeing responded that its support from the Ex-Im is essential to maintaining a competitive edge. "[t]he U.S. aerospace industry repeatedly demonstrates its ability to compete in the global marketplace. But as evidenced by the current global economic turmoil, financing markets are very volatile, and the commercial markets' support for export financing can be unpredictable and inconsistent. To be able to compete under such market conditions, aerospace exporting success hinges on the continuity of crucial export credit financing that Ex-Im and other national export credit agencies provide during market ebbs and flows," Boeing stated in a statement to Subsidyscope.
Also See: Government Contracting Resources
Comments
Hooray for Ex-Im loan guarantees to Boeing!
(My engineer husband works for the manufacturer/supplier of nearly all refrigeration units for Boeing commercial planes, both domestic and international.)