2014 Export-Import Bank Annual Conference
As prepared for delivery
Chairman and President Fred Hochberg
Apr 24, 2014 – Washington, DC
Good morning, and welcome to the 2014 Export-Import Bank Annual Conference.
I've had the opportunity to welcome you here for five years running, and I couldn't be more excited about this year's program and the direction Ex-Im is headed. I'm particularly delighted to welcome Secretary of State John Kerry, who will be joining us at lunch today.
I want to begin today by talking to you about money.
No, not what's inside this bag—I want to talk about the dollar sign itself. Everybody in the room knows what this symbol means, but I'm willing to bet not many of you know where it came from.
Historians differ on the exact source of the dollar sign, but the theory I like best traces it back to the Strait of Gibraltar.
Long before Columbus and others set sail for the New World, legend held that on each side of the Strait of Gibraltar was a pillar. And the story goes that on those pillars was an inscription meant to warn sailors who tried to venture out west: Nec Plus Ultra.
Translated from Latin, it means “nothing further beyond.”
For centuries, most Europeans believed that there was nothing out there beyond the water's edge. Of course, that all changed when Columbus reached the Americas—on what I would call ‘Europe's first trade mission.'
After word got out about this new discovery, King Charles decreed that the old saying—Nec Plus Ultra—would be changed simply to Plus Ultra: “further beyond.”
Those pillars became one of the world's most enduring symbols. A symbol that still reminds us that opportunity and prosperity aren't confined within our own borders. They can be found further beyond—if we're willing to venture out.
And that's exactly what I want to talk to you about today.
At Ex-Im, we want to be the wind in your sails, equipping you with the tools you need to venture out to new frontiers—and to create new jobs here at home.
Now, it wasn't so long ago that American businesspeople—myself included—only turned to exports after the U.S. market was exhausted. Many entrepreneurs were once like those 15th Century Europeans—they didn't see a lot of value beyond their own shores.
This telescope is what the explorers used—it's not great for discovering new markets, but it does let me see who's using Twitter during my speech.
Back in the 1950s, U.S. exports made up only about 4% of GDP. But today, that number has more than tripled. As the world continues to globalize, exports are increasingly vital to economic success and job growth.
Since President Obama announced the National Export Initiative on this very stage back in 2010, we've made historic progress. Just last year, 16 states set new records for export sales—and America set a new export record for the fourth straight year. America has added almost 9 million new private sector jobs since 2010. And at the rate we're going, April is poised to be the 50th straight month of U.S. job growth.
That momentum is only going to grow stronger in the years ahead.
Now, despite that tremendous progress, we still have more to do if we want to match our overseas competitors. U.S. exports have reached nearly 14% of GDP—but Germany and Korea's exports represent more than half of their GDP. In fact, Korea's export financing amounts to about $100 billion—that's nearly four times what America supports, for an economy less than one tenth our size.
And they're not alone. When I travel around the world, I see government after government looking to strengthen their economies through exports. Everyone is putting their foot on the gas, trying to win the race for leadership in the global marketplace.
Last year, we pulled ahead of Germany to become the world's number two exporter. We're right behind China—and as far as I'm concerned, there's no reason we can't top them. It was only a dozen years ago that we were number one. And we can get there again.
So this is a time to drive forward. That's especially true now, when more than a billion people are poised to join the global middle class over the next five years.
Demand is going to skyrocket for transportation, infrastructure, power, high tech services, and every other consumer and capital good you can imagine.
The countries that seize these opportunities won't just be benefitting the nations they export to. They'll be generating new jobs and a stronger economy back home as well.
So we know the ground is fertile. We know the opportunities are there. But we also know that our foreign competition has never been more intense. If you're an American exporter and you feel like you're wearing a big target, guess what: you're not paranoid.
Everybody wants to top the United States. So they're pulling out all the stops to win trade deals and boost exports. Sometimes, for countries like Russia and China, that can even mean throwing out the rule book. U.S. businesses don't have that luxury—you play by the rules.
So on an uneven playing field—facing relentless competition—how can America succeed on the global stage?
First—and most importantly—by continuing to ensure that the U.S. produces the highest quality, most innovative goods and services in the world. Make no mistake: America's success begins with you.
The second way we ensure success is by leveling the global playing field, so that U.S. goods have the opportunity to succeed on their own merits.
Your focus should be on coming up with the next breakthrough product or game-changing idea—not on financing. You may lose out to a competitor on pricing or scheduling, but you shouldn't lose a deal just because you were steamrolled on financing by an aggressive foreign government.
At Ex-Im, that's where we come in. By breaking down barriers to financing, we level the playing field for American businesses, and deliver a good night's sleep to entrepreneurs who might otherwise be worried whether they'll get paid for overseas sales.
We've been coming through on that promise for 80 years now.
In the 1930s, our support of U.S. businesses working on the Burma Road meant that the trucks constructing the 700-mile route were Fords, Chryslers, and GMs. And just two months ago—after a 26-year hiatus—we announced that we're beginning to reopen for business in Burma.
In the 1950s, Ex-Im loans backed the construction of some of the first electric power plants in Riyadh and Jeddah, Saudi Arabia. And today, a small business in New Hampshire is working with Ex-Im to transform energy production in Saudi Arabia—and dozens of other countries around the globe.
Let me tell you about that company.
Mike Boyle started Boyle Energy Services & Technology 20 years ago in a rented room in Nashua. For more than a decade, his business struggled to stay afloat due to a sluggish domestic market.
But then his team came up with an idea for a new technology—one that could reinvent the way power plants were cleaned, tested, and certified. With this innovative approach, Boyle now had the ability to service power plants in a way that dramatically reduced costs, hazardous waste, and carbon emissions.
They invented a groundbreaking technology—but they lacked the customers. That all changed when Mike discovered that Ex-Im credit support could help him reach new markets.
Armed with competitive financing, Mike's team has now taken on more than 400 projects in 28 countries. They've doubled their revenue twice in the last six years. And since partnering with Ex-Im, they've been able to grow from about a dozen employees to more than 50. Ten years ago, exports accounted for about 5% of their sales. Today, they account for nearly 90%.
With Ex-Im support, Mike now has the confidence to venture out to new markets, knowing that not only does he have the highest-quality services—he has the most reliable financing to back it up.
Mike went “further beyond.” And we were right there at his side.
I'm glad Mike Boyle could join us here today—could you please stand, Mike?
As exports grow increasingly pivotal to our economic success, America's future will depend more and more on companies like Mike's. And that means the Export-Import Bank will be more vital to the American economy than ever before.
Because when we empower businesses to reach new markets and win deals, the ripples are felt in cities and towns across our country.
The 40 jobs Mike Boyle added after partnering with Ex-Im aren't just a statistic. That's 40 families in New Hampshire and a dozen other states who have gained a little more security. For those families, planning for the future becomes an opportunity to savor instead of a burden to dread.
Exports breathe new life into businesses. They transform whole communities through job growth. And that's what Ex-Im delivers: global tools that reap lasting local benefits.
That's especially true when it comes to our work with small businesses. Last year, we set a record for the number of small business transactions we authorized at Ex-Im. Nearly 90% of our authorizations directly served small companies—another historic high.
Gaining access to global markets is what empowers small companies to grow into big companies.
One of those companies is SpaceX. Tomorrow, you'll be hearing from Elon Musk, their visionary CEO. SpaceX was born in a garage in 2002. Eight years ago, they had fewer than 200 employees.
They were a small business armed with some truly innovative ideas—but with limited financing opportunities, they faced serious competition from France, Russia, and China.
Now, financing rockets is complicated business—it may not be rocket science, but it's complicated! So we partnered with SpaceX to overcome those obstacles.
They got the support they needed to compete on a level playing field—and they won.
Today, those innovative ideas have turned into realities—and nearly 4,000 people are part of the SpaceX team.
Their supply chain—here in America. Their manufacturing—here in America. Their launches—here in America. And those 4,000 jobs—here in America. I think that deserves a round of applause.
The growth of SpaceX from an ambitious small business to a global leader is an inspiring story. And at Ex-Im, it's the type of story we want to make possible for all of our customers. If your ideas aren't bound by gravity, then your sales shouldn't be bound by financing.
Now, as it turns out, not everyone understands the value that Ex-Im provides.
That's despite our 80-year track record, despite supporting more than a million U.S. jobs over the last four years, despite the fact that we run a surplus for the American taxpayers, and despite the work we've done to propel thousands of businesses to new heights of global success.
Maybe these critics aren't out there talking to entrepreneurs like Mike Boyle who have added more and more jobs because of export success.
Maybe they don't realize that other countries salivate at the prospect of a world without Ex-Im. Let me tell you, if we were to shut down, Russia, China, and other countries would gladly snatch up all the opportunities America would be forfeiting.
Whatever the reason, there are a few folks out there who still need some convincing.
This fall, our charter is set to expire. Unless Congress acts, we'll be forced to close our doors on October 1st. And all the momentum we've built up as an engine for U.S. exports and jobs these last 80 years will grind to a halt.
Now, reauthorizing the Bank never used to be a political issue—and it shouldn't be today.
Supporting American job growth shouldn't be controversial. Keeping America competitive in the global economy shouldn't be controversial.
And that, after all, is what we do. And economists of every political stripe will tell you the same thing.
There's a vocal minority out there who can't stomach the thought that the government might have a role to play in empowering U.S. businesses to compete across the globe.
Of course, everyone is entitled to their own theories and dogmas—but theories don't pay the bills. Business owners like you live in the real world—and for you, those theories can trigger harmful repercussions.
Let me tell you about Steve Wilburn.
Steve's a veteran whose small renewable energy company has created 165 jobs in California—and at suppliers in seven other states—since partnering with Ex-Im.
Two weeks ago, Steve was stunned to hear that he'd lost out on a $57 million project in the Philippines. He'd been told he was the preferred supplier. He'd thought he had it in the bag.
But he lost out because his competitor from South Korea told the buyer that Steve's business might not have the financing to get it done. They pointed to the debate surrounding Ex-Im's reauthorization, and they said, ‘there's too much uncertainty there—you can't rely on America.'
Can't rely on America? That's just wrong. We shouldn't accept that—and we don't have to.
This isn't speculation. This is a real company losing real business and real American jobs because of political games being played in Washington.
So I don't think our critics have been talking to Steve. I don't think they've been talking to Mike Boyle or Elon Musk. I don't think they've been talking to you—or the hundreds of other entrepreneurs I meet with on the road. And I don't think they've been talking to the millions of Americans earning a living through export-backed jobs.
Because if they did, they'd know that Ex-Im has a clear role to play in strengthening our economy.
We can't let rigid ideologies stand in the way of American jobs and American leadership. We simply can't afford it. This is the time to add your voices to this critical conversation.
The President stands strongly behind U.S. entrepreneurs and workers. He's asked for Ex-Im to be reauthorized for five years, with a slight increase in our lending cap.
Those five years would deliver confidence to countless American exporters and their employees—and certainty to buyers abroad. Everyone is counting on Congress to get this done—and done on time.
China is buying U.S. satellites. America now builds and exports more Hondas than we import from Japan. All across the country, innovative entrepreneurs are teaming with Ex-Im to get an edge on their foreign competition and create new jobs.
We cannot pull the rug out from under them. We cannot play political games with those American jobs.
Those jobs drive our economy—and they drive us at Ex-Im.
We've got a team of 400 people with a singular focus: getting deals done so that America can add jobs. Actually, we're now up to 401: thanks to her reconfirmation two weeks ago, we're thrilled to welcome back our Vice Chair, Wanda Felton.
We're sleek. We're nimble. We're entrepreneurial-minded. And we defy every tired stereotype about federal agencies; we deliver government at the speed of business.
The reason for that is simple: we live in the world of business. We've spent 80 years cultivating a record of success in the global business community.
Despite that success, we're not resting on our laurels. We're constantly seeking out new ways to improve. That's why we're cutting red tape and rolling out new tools that exporters can use to connect with us more efficiently. And it's why we always take a responsible approach to risk.
Last year, we supported 205,000 U.S. jobs. We empowered more than 3,000 small business owners to reach out Plus Ultra, further beyond our shores. We engaged with more U.S. companies than ever before—all while maintaining an historically low default rate of less than one quarter of one percent.
And we did it all at no cost to the American taxpayer.
In fact, we ran a surplus of one billion, 57 million dollars. I was so proud of that number, I made it the password to my iPhone. Shhh… don't tell anyone.
The U.S. economy isn't slowing down—and we aren't either, with our small business support coming in at a record-breaking pace so far this year.
That's a testament to the entrepreneurs in this room and around the country. And it's a reminder that America still creates the best products borne of the best ideas.
Your ideas can be deployed to every corner of the globe, to revolutionize industries, to meet the needs of consumers on every continent, to deliver good jobs and revitalize towns across America, to ensure that the U.S. becomes the number one exporter again—and the home of the strongest, most durable economy in the world.
You can be a part of that growth—if you're willing to venture out.
The days of Nec Plus Ultra are over; the world is waiting for you. So set a course for that new market. Reach out further beyond for that next big opportunity.
And when you do, Ex-Im will continue to stand with you: a pillar of support for innovators and entrepreneurs all across the country, guiding the way to opportunity, prosperity, and American jobs.
Thank you, and enjoy the conference.