The Export-Import Bank of the United States, often derided in some circles as the "Bank of Boeing" and an epicenter of crony capitalism, is regaining favor with Jetbahis one of its harshest critics — President Donald Trump.
On the campaign trail, candidate Trump dissed the Ex-Im Bank as "unnecessary," which is actually one of the nicer things he had to say about the federal agency.
Now, however, Trump is signaling he's going to reverse course and liberate the Ex-Im Bank from a politically imposed exile that's severely limited lending and hamstringing its mission to help U.S. companies export more goods and services.
Let's hope Trump moves quickly in the right direction. An Ex-Im Bank comeback is not only good for giant employers, like Boeing, but also for small and midsize Chicago-area and Illinois manufacturers, which are essential to the health and wealth of our economy.
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Essentially, that's what happened recently when Europe's Unilever, a giant maker of food, personal care...
It's the epitome of a rich person's problem: You make a $143 billion offer to buy something, only to have the bid summarily rejected and then, adding insult to injury, you're told to shove off.
Essentially, that's what happened recently when Europe's Unilever, a giant maker of food, personal care...
(Robert Reed)"It's not crony capitalism, it's capitalism that's going on," says Greg Baise, CEO of the Illinois Manufacturers' Association, who contends the Ex-Im Bank's expertise is crucial to his group's estimated 4,000 member companies.
Started in 1934 under President Franklin D. Roosevelt, the Ex-Im Bank primarily backstops U.S. companies trying to compete overseas, often against government-subsidized competitors.
For large companies, the Ex-Im Bank mainly provides U.S.-backed guarantees on higher-risk loans that enable global customers to purchase big-ticket items such as Boeing's jets or Caterpillar's heavy equipment or bulldozers.
For midsized and small manufacturers, the Ex-Im Bank makes loans and handles insurance on contracts with overseas customers, ensuring that U.S. firms selling goods overseas are paid promptly and properly.
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However, the machinist union's ignominious Boeing defeat, where...
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However, the machinist union's ignominious Boeing defeat, where...
(Robert Reed)Like any good bank, it manages risk while making money.
The Ex-Im Bank's annual loan losses are historically well below 1 percent, less than your average commercial lender. By charging for fees and services, it regularly generates annual surplus revenue. Last year it gave back $284 million to the U.S. Treasury, according to Ex-Im Bank data.
Yet in recent years, the agency has come under severe attack from conservative advocates and Republicans, including House Speaker Paul Ryan. While running for office, Trump chimed in last August, telling the press: "It's sort of a featherbedding for politicians and others, and a few companies."
Critics claim the Ex-Im Bank is merely providing thinly veiled corporate handouts to wealthy, multinational companies. They are especially peeved at Boeing, which is among the bank's largest beneficiaries and has enjoyed its support in selling jets to India, Poland and other countries.
Thus, the branding: Bank of Boeing.
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You can't beat jobs and business expansion.
Still, you know what would make global e-commerce giant Amazon an even better neighbor?...
With plans to employ up to 7,000 people at nine Chicago-area and downstate facilities, Amazon.com is well on its way to becoming a solid corporate citizen in Illinois.
You can't beat jobs and business expansion.
Still, you know what would make global e-commerce giant Amazon an even better neighbor?...
(Robert Reed)Chicago-based Boeing argues the Ex-Im Bank is helping to offset a significant price disadvantage the aerospace and defense giant often faces when competing for customers against state-backed manufacturers like Europe's Airbus.
I'd argue that Boeing makes an important point about leveling the global playing field. Moreover, when Boeing wins a contract, that work helps to support, and protect, thousands of U.S. factory jobs while maintaining a nationwide network of 6,000 parts and supply vendors.
As important, Illinois small and midsized manufacturers apply for Ex-Im Bank loans and those insurance policies needed to limit the downside of the exporting business.
Illinois is one of the country's top exporting states, sending an assortment of goods to Mexico, Canada, China, India, Europe and elsewhere.
For many years, the Ex-Im Bank has been active in Illinois.
It supported a total of $5.17 billion of exports from 322 Illinois-based businesses between 2009 and 2014 — with nearly two-thirds of them small businesses — according to data from the agency.
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Right now, a legal dispute is underway that's challenging the president's broadly...
The corporate rage against President Donald Trump's controversial immigration ban is being led by the nation's technology companies, but nearly every business in the Chicago area and elsewhere has a stake in this melee.
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(Robert Reed)Yet due to political wrangling and dysfunctionality that's not worth getting into here, the Ex-Im Bank has been operating at much reduced speed since 2014.
Currently, it has about $30 billion in deals waiting to be authorized by a board that's short-handed with only two acting members from a total of five. A quorum of three is needed to approve bigger deals.
Recently, President Trump told a Democratic senator to spread the word that he was backing the Ex-Im Bank and would soon be addressing those governance issues.
That's encouraging.
For Trump, the hard part is already over. After all, he's put aside his initial antipathy toward the Ex-Im Bank.
Now, his job is manufacturing its much-needed revival.
roreed@chicagotribune.com
Twitter @reedtribbiz
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