Small businesses like Elmsford”™s Magnetic Analysis are paying rapt attention to the debate over the reauthorization of the Export-Import Bank of the United States.
Magnetic Analysis is a manufacturer of test equipment primarily used in the automotive and energy industries to test for defects in metal tubes, pipes, and bars using electromagnetic principals. It exports its products all over the world ”“ especially as much of the metalworking industry has left the United States.
“We export products to just about every part of the world ”“ the Americas, Europe, Southeast Asia, India, and China,” said Thomas Ganallo, the vice president and chief financial officer of Magnetic Analysis.
The Export-Import Bank, started in 1934 under President Franklin D. Roosevelt, will vanish Oct. 1 if Congress does not approve measures reauthorizing it before then. A nine-month reauthorization of the bank passed the House of Representatives by a vote of 319-108 as part of a continuing resolution to fund the federal government on Wednesday. The Senate was expected to put the reauthorization of the bank to a vote on Thursday.
Businesses across the country rely on the Export-Import Bank to provide purchase insurance, loan guarantees and other forms of funding to conduct business abroad.
Gannalo told the Business Journal that Magnetic Analysis has benefitted from Export-Import Bank loan guarantees to foreign purchasers of the firm”™s testing products since 2010.
“We”™ve put ourselves in a position to sell products to these areas,” Ganallo said. The guarantees, he said, “enabled us to be competitive with our pricing and be able to produce a product that has a long lead time and is very expensive in terms of manufacturing and fabrication.
“Brazil is a major emerging market in the industrial marketplace, and we have many potential customers in that market,” said Frank Matheis, the director of corporate communications for Mount Kisco-based Curtis Instruments, which manufactures drive systems for electric vehicles for export.
One of the Export-Import Bank”™s major programs is to insure an exporting company against payment defaults by purchasers abroad. “Through the Export-Import Bank, we receive insurance on our receivables, which creates in us the trust and confidence and the mitigation of risk that we need to proceed into that market,” Matheis said.
Rep. Nita Lowey, a Democrat, stressed the economic effects the bank has on Westchester County.
“This really is an important issue for our local economy,” said Lowey, who represents parts of Westchester and Rockland, on a conference call with reporters and local business executives Monday. “It”™s critical in assisting U.S. products reach overseas markets. This not only supports thousands of middle-class jobs, it helps ensure U.S. manufacturing remains competitive with other countries.”
Lowey co-sponsored the Protecting American Jobs and Exports Act, which was introduced June 24 and has been referred to the House Financial Services Committee. The chairman of that committee, Rep. Jeb Hensarling, a Republican from Texas, is one of the most outspoken opponents of the Export-Import Bank.
Hensarling argues that the Export-Import Bank benefits big businesses and banks that have political clout at the expense of smaller businesses and working Americans.
“Overwhelmingly ”“ and indisputably ”“ it”™s some of the largest, richest, most politically-connected corporations in the world ”“ like Boeing, General Electric, Bechtel and Caterpillar,” Hensarling said in an opening statement to a June 25 Financial Services Commitee hearingk. “In fact, in 2013, over half of Ex-Im”™s financing went to a handful of Fortune 500 companies.”
Lowey, however, said that the Export-Import Bank helps those companies maintain American jobs too.
“There are 59 other export credit agencies that help support foreign companies export to new markets,” Lowey said. “All of our companies”¦they are competing with other companies that are being helped, so in order to be competitive, in order for us to compete, it really does help that all of these companies create and maintain U.S. jobs.”
Since 2007, the Export-Import Bank has insured or financed $136 million worth of purchases from 22 companies in New York”™s 17th Congressional District, which Lowey represents. That $136 million in support resulted in $2 billion dollars of products being exported from the district, according to data provided by the Export-Import Bank.
“If you look at the numbers, over the past five years the Ex-Im bank has assisted in financing more than $188 billion in U.S. exports and supported 1.2 million American jobs across the country,” Lowey said. “We must ensure that businesses in the lower Hudson Valley have the services they need to access foreign markets.”
Matheis noted it was a global marketplace. “And if we say we”™re not going to take a slice of the emerging markets, our balance of trade will suffer and we will forego opportunities to the Chinese and European competitors,” he said.
Matheis and small businesses like Curtis Instruments think opponents of the Export-Import Bank”™s reauthorization need to see the bigger picture.
“We”™ll lose the opportunities on the local basis,” he said. “If our industries aren”™t globally competitive, they”™re not locally competitive, either.”
Click here to see a table of companies in the 17th Congressional District that have been supported by the Export-Import Bank. Shipment values are the amounts directly supported by the bank, while total export values include exports related to the Ex-Im Bank’s financing.
This article was updated with information on the House vote Sept. 17.
This “bank” should be killed immediately. It gives loans to our enemies and competitors. It is wrong. and so is Nita’s support for this “bank”. The math is wrong.