US ExIm financing under attack again; killing it would aid Airbus

US Export-Import financing is under attack again by Delta Air Lines and Republicans.

We understand why Delta is opposed. It believes that ExIm financing of Boeing aircraft to competitors puts it at an economic disadvantage.

But fees charged by ExIm made financing more costly and “market rate,” a move intended to remove the financing advantages. Some airlines, in fact, chose alternative financing as a result.

Delta claims ExIm hasn’t taken into account the impact on losing American jobs. We find this a stretch, since Boeing out-sources thousands of jobs with its industrial partnerships (particularly on the 787) and supply chain contracts. At one time, we seem to recall Delta out-sourced jobs to non-US locations.

Be that as it may, at least Delta has its self-interest at stake and one can’t truly fault the airline for this. But the Republicans are another matter. Although ExIm finances a variety of US industries, Boeing is the prime beneficiary and some Republicans claim this is nothing more than corporate welfare.

ExIm, which has been around since the Great Depression, provides financing that is similar to European export credit support offer to Airbus customers. If Republicans succeeded in killing ExIm (or if Delta does), then Airbus will have a clear advantage.

This falls into the category of “what are they thinking??”


16 Comments on “US ExIm financing under attack again; killing it would aid Airbus

  1. I like the torpedo idea. Although I would have liked it better if I had been able to see a P-8 do an attack run at 100 ft or less…

    Here’s an idea for innovation. Some people suggested jettisoning malfunctioning batteries from the 787 to prevent aircraft damage. Maybe the future military version of the 787 could have a launch mechanism for multiple failed batteries (returned from ANA) to carpet-bomb an area? That should keep cost (and heads of the targets) down.

  2. “killing it would aid Airbus”

    is better for the ear then

    “killing it would reduce state subsidies to Boeing”

    all the same 😉

    • All’s fair in love and finance. The export-import bank makes money for the federal government (at a time when it needs all the revenue it can get) and promotes the export of American goods, promoting economic recovery. I fail to see why a reasonably intelligent person who could add and subtract and has a vested interest in the success of the USA would be opposed to such an institution. Then again this is the congress we’re talking about, so I guess I’ve answered my own question.

    • I’m all for ending “corporate welfare,” but the Republicans should start with farm subsidies to corporate agriculture.

  3. “what are they thinking??”

    No it falls in category of less corruption, less fascist politics and less taking others people money but i guess that is too much for one more industry that can’t live without tax payers money.
    So i don’t have any double question mark, i get the the picture easily.

    • …So…wait, loans to overseas businesses count as fascism now? Yikes. Though I suppose that would explain why Germany is so interested in keeping Eurozone banks afloat 😉

      • Loans are part of the financial market. If a company wants a loan should go to the banks. The State should have not anything to do with it.
        The more links between business and the State more Fascist is the State. In the limit the private property is purely nominal and the State is co-opted. A further step there and it will be Communism.

    • aerospace is not the lucrative market that housing once was, and that banks look for. Banks only look at making money and they can do that better by not lending their money to airlines. The gov’t has additional interests: a vibrant aerospace industry to supply the noxt generation bomber in a few years for example. Or do you propose the US should buy their bombers overseas?

      I fully agree no gov’t has any business getting into area’s covered by commercial businesses. But this, an institution issuing revenue generating loans to support the sale of domestic products – something that benefits both the government and business. Why would you oppose. Banks don’t want this work, so why not let the gov’t supply it?

  4. So much for market where the best product wins.^^ Keesje, in my eyes, you have a point.

    Besides, I only recall those subsidiary fights from the (soon) decade-long WTO hearings. I couldn’t really tell who’s side right or wrong, good or bad. Now to establish and maintain a system which rewards customers for buying certain manufacturers may, as seen, establish an unhealthy dependency at all ends. Back to the opening sentence, what’s so bad with just competing at quality levels? Idealism.

  5. Competing at quality levels is fine while you have best quality.

  6. I would be curious if anyone knows the details of Delta and its purchases of bombardier regional jets. Don’t they receive EDC financing which is similar to ExIm? If so, it would seem really hypocritical of Delta to oppose ExIm financing.

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