Export Import Bank Annual Conference 2011 Opening Remarks
As Prepared For Delivery
Fred P. Hochberg
Mar 31, 2011 – Washington, D.C.
Innovation, quality, outstanding service, and the most productive and resilient workforce in the world: That is America's competitive edge. And I see it at company after company that I visit from coast to coast.
Let's start with this motorcycle. It was built by Zero in Scotts Valley, California. It is electric powered, high performance, lightweight, and very, very fast.
And it produces 90 percent less emissions than a conventional motorcycle.
Zero has 62 employees at their California facility. A year ago they had 30. The year before that just eight.
How were they able to grow so fast? Through exports.
Today, exports are about 30% of their sales. And with the backing of Ex-Im Bank—they are now aggressively expanding to customers in: South Africa, Brazil, Mexico, and Singapore.
Going forward, Zero estimates that exports will grow to about 60 percent of sales--and we're going help them to get there. And -- just like this motorcycle - get their FAST.
Our next company makes more airplanes than Boeing, Airbus, Embraer and Bombardier combined. You heard that right more than all four of them combined.
And they sell these aircraft around the globe. Now I know Jim McNerney had to leave, but before the folks here from Boeing get too nervous. Most of the planes happen to be this size.
Pacific Miniatures, or PacMin, is a California company that specializes in aviation and aerospace models. Their customers are travel agencies, airports and aviation companies around the globe.
And while their planes may be small, there is nothing small about their export sales. In fact, when I visited this family-run business in October, they had recently completed more than $200,000 in orders for Ethiopian and Saudi Airlines. We help finance both the models and the real planes.
PacMin has 75 employees - and has worked with Ex-Im since 2005 to successfully sell their products worldwide. Today, about 35 percent of their sales are exports. And they continue to look for more global sales opportunities.
Now let's take a look at this solar module built by Suniva in Norcross, Georgia.
Suniva - as you learned earlier today - is a case study for how you take an innovative idea--and build a successful business venture.
Suniva grew out of a Department of Energy-funded program at Georgia Tech. And it's become a successful operation that melds modern robotics with good-paying, secure jobs.
When I visited Suniva last month, I met Soloman, Darrell, Mun and David. They built this module. And in talking to them I heard how excited they are to be part of an innovative and forward leaning company like Suniva.
With the assistance of Ex-Im, Suniva has become a leader in providing affordable, innovative and highly efficient solar technology to customers in Europe, Australia and Asia.
This morning we heard from CEO, John Baumstarck. From what I saw in Norcross and from what I've learned about their business, I'm confident they are going to double their sales this year. No pressure John. Just my prediction.
I could go on and on highlighting American companies that are building innovative products---and offering outstanding services.
I love these companies. They are proving each and every day how you take good ideas and bring them to market.
The fact is America's competitive edge is as strong as ever. I see it at companies across the country. I see it when I walk the shop floor at Ford, John Deere and Caterpillar. I see it at mid-sized companies like Vermeer and service providers like Black & Veatch. I see it when I meet small business owners at our Global Access events, which you will hear more about in a moment.
When I meet the individuals running these companies—when I talk to the workers building these products—I come away inspired by America's long-term competitiveness and our innovative spirit.
And by the vital role these men and women are playing in President Obama's plan to: Win the Future.
Creating a climate where American exporters—and American workers—can grow, thrive, compete---- And win the future.
That is our top priority at Ex-Im. And we measure our progress not just by how many exports we finance or the size of a transaction.
We measure it by lives changed---and communities transformed. By opportunities and jobs created for workers like Jim Bauer. Jim is a long-time member of the United Steelworkers Union.
He worked as a crane operator at the U.S. Steel plant outside of Philadelphia for 25 years before his plant faced layoffs and eventually closed. Jim was 48 years old, not an easy age to be looking for work.
Then one day he answered an ad in his local newspaper for a position at a company called Gamesa--a Spanish company that set up shop in Pennsylvania because of the skill base of the local workforce and the market access the region provides.
Jim got the job—and, for the last five years, he has put his experience to work building wind turbines.
I had the opportunity to visit Jim's plant in February. Gamesa invested $34 million to transform a plant—which stands just 500 yards from where Jim had worked for 25 years—into a modern wind turbine factory.
The new plant also is a union shop. And these workers are acquiring the skills needed to help make the U.S. a leader in the renewable energy sector.
Some of the turbines that Jim and his co-workers are building will soon be part of one of the largest wind farm projects in Central America.
Thanks to a $159 million direct loan from Ex-Im Bank. And by September it will be powering up homes, streetlights and businesses in Honduras.
What's so promising about this project is that in addition to the environmental benefits, wind power is actually cheaper than traditional power sources in Honduras.
So they are utilizing cleaner power and saving money.
We look forward to working with Gamesa as they grow their business in this region.
Let me give you one more example:
Together, these companies sold 121 American-made firefighting vehicles and equipment to the Ghana National Fire Service. As part of a $41 million loan from Ex-Im Bank.
This guaranteed loan played a critical role in protecting and sustaining the jobs of highly skilled American workers through tough economic times.
And it also helped equip Ghana with the high quality, reliable tools it needs to protect its citizens, homes and way of life.
That is what we strive for at Ex-Im: Building an export-focused 21st century American economy, driven by innovation, inspired by American entrepreneurship and fueled by competitive financing.
That's how we strengthen our economy and improve the lives of working families across our country. And, that's how emerging markets around the globe will obtain the goods and services to build and strengthen their economies.
To do this, we must capitalize on opportunities throughout the world.
One of the most promising areas we see is global infrastructure development. The world is building, and rebuilding itself every day, particularly in emerging economies. And I want American companies and American workers to do the building.
Global infrastructure spending is expected to be $2.1 trillion a year for the next ten years.
You have that right: That's more than $21 trillion worth of opportunities for American companies and their workers.
Let's take a closer look at these opportunities, and let's start in India.
India alone plans to spend $1 trillion on infrastructure between 2012 and 2017, double what they spent in the previous five years.
As part of these investments, India needs to build: One million square miles of new paved roads. And about 4,600 miles of new metros and subways.
And that rail system and those roads mean billions of dollars worth of capital goods and services---from trains to rails to engineering services to paving equipment.
In addition to infrastructure demands, India also has growing power needs. Today, nearly 400 million people in India have never seen a light bulb.
India is powering up. And they are working to do it responsibly. India recently announced its National Solar Mission, a far-reaching plan to add 20,000 megawatts of solar power by 2020. That is enough to power nearly 10 million homes with renewable energy.
At Ex-Im, we are working with U.S. solar companies to make sure they have the competitive financing they need to be part of these projects.
One of these companies is Infinia, which is based in Washington State. Ex-Im recently authorized a $30 million direct loan to finance a solar project in Rajasthan.
The project is using Infinia's PowerDish technology. This was Infinia's first major sale for foreign delivery. And their largest sale to date.
I recently spoke to JD Sitton, the CEO of Infinia. This is what he had to say about working with Ex-Im:
“Ex-Im Bank defied everything I thought about a government agency. They were focused, timely, responsive, and came back with solutions fast.”
So let me quickly recognize the team at Ex-Im who worked on this transaction:
John Schuster, Craig O'Connor, Michael Sams, Ashok Pasricha, Steven Mayo, Timothy Kim.
All of them helped make this deal happen. And while I am at it, let me also recognize all of the wonderful and dedicated staff from Ex-Im, who helped us break records everyday.
In many emerging economies, the need to build power capacity and infrastructure is critical to meeting the needs of their emerging middle class.
And it is not just India. For Brazil, this challenge is especially acute.
With the World Cup in 2014 and the Olympics just two years later, boosting power production and building out infrastructure are two of the country's critical priorities.
Brazil will invest more than $200 billion on everything from roads and public transportation, to airports and sports stadiums.
Ex-Im will support American companies—and American workers— exporting to these projects. That's why just a few weeks ago, President Obama announced $1 billion in Ex-Im financing. Its purpose is to finance the purchase of more American-made goods and services.
All around the world we are seeing similar opportunities for American companies.
Whenever I travel to emerging economies—whether it is Turkey, Indonesia, Vietnam or South Africa—I hear the same thing from local officials and business leaders: they want to do more business with more American companies.
And the power of Made in U.S.A resonates around the world. They appreciate your transparency - and the outstanding quality of your goods and services.
We make the things the world wants to buy. And despite misconceptions: We are the number one manufacturer in the world. The U.S. makes more than China, Germany, and Japan.
However, when it comes to selling overseas, we fall to number three behind China and Germany. And that is unacceptable. There is nothing third rate about American products and American business.
And there should be nothing stopping us from selling more of the products and services we make into the global marketplace.
By ensuring that more American companies—big and small—go after our share of this global business, we can build the type of export powerhouse that is at the heart of President Obama's plan to win the future.
At Ex-Im, our goal is to provide the financing to make this a reality. And to do it we are working to ensure that our bank moves at the speed of business.
As a long-time business executive I focus on performance.
And I'm proud with the results we turned in to the American taxpayer this year.
For Fiscal Year 2010, we had our second consecutive record-breaking year, with:
· $24.5 billion in financing · This supported $34 billion in export sales
· And about a quarter million jobs at 3,300 companies
And one the things my new and somewhat surprising friend Tom Donohue, head of the U.S. Chamber of Commerce, likes to remind people about Ex-Im: “The Bank makes money.”
In fact, we generated $3.4 Billion in the last 5 years. And for those of you not at our Global Access launch in January, Tom must have said that 10 times that day.
And we are building on this momentum in 2011.
For the first six months of this year, we:
· Authorized more than $13 billion.
· Which supported more than 110,000 American jobs
· This puts us on track for another record-breaking year.
And we are committed to being even faster, more nimble and better-equipped to meet your needs.
That's Government at the Speed of Business
We are: Streamlining our processes. Cutting transaction times. Applying lean practices so you get answers - and get them fast. All of us at Ex-Im are focused on one thing: Getting to yes. And getting there fast
That is why we are focused on better understanding our customers—And making sure you are getting the tools you need, in the timeframe you need them to compete—and to win—in markets around the world.
At Ex-Im, we work closely with many large companies.
These companies already have resources and relationships throughout the world. What they need from us is financing that helps them level the playing field.
Let me give you an example: GE was recently bidding on a $500 million rail project to supply 150 diesel-electric locomotives to Pakistan.
These locomotives are critical to building the infrastructure of Pakistan's economy, so products and commodities can get to market.
GE was told by Pakistani officials that they preferred their locomotives. They were willing to pay a premium for their high-quality and dependability.
There was only one sticking point. And it was financing.
The Chinese government offered below market financing that provided the Chinese manufacturer an advantage that GE could not make up in quality, price or service.
This put the entire sale and more than 700 jobs in Erie, Pennsylvania at risk.
To remedy this, our administration put together a competitive financing package. And for the first time, we went to the OECD, the organization that governs global export financing, to inform them of our decision to match China.
This significant policy change meant an American company could compete solely on the quality and value of its products---and the service it provides.
And they would not be undercut because of unfair terms.
You can see why this transaction marks an important policy change for the United States government and how American companies can now better compete in the world. That is how we are working with large companies. However, for small businesses, the need is different. Small businesses need access to capital - and to people who can help them navigate the global marketplace.
One of the things that President Obama emphasized when he was launching the National Export Initiative was that small business needs to be front and center as we build an export economy.
That is why we created Global Access for Small Business. This program is a model for how government and the private sector can come together to support American business, stimulate private sector jobs, and strengthen our long-term economic growth through exports.
What's stopping many small businesses from selling overseas?
Worry. Fear. Fear of non-payment. Fear of putting their entire business at risk. I hear it all the time.
Small business owners say to me: I know how to collect from my customers in New Jersey, New York and New Mexico.
But what if a customer in New Zealand doesn't pay?
Global Access helps small business owners have the peace of mind and security to sell their products in the global marketplace. By removing the fear of non-payment.
I want you focused on making the best products and competing for sales. If you focus on that, we'll take care of the risk when you sell overseas.
I like to tell people: I'm in sleep business. Because with Global Access, small business owners can sleep better at night. We take the fear out of selling overseas. So you can sleep better.
And our goals for Global Access are both concrete and ambitious.
By 2015, we plan to:
· Approve $30 billion in total small business authorizations
· Double our annual small business volume
· And add 5,000 small businesses to our portfolio
The truth is: We cannot grow our economy without growing exports, and we cannot grow exports without small businesses.
To help more companies, we are holding 20 Global Access forums across the country to build awareness for our products and services.
We are partnering with the Chamber of Commerce, National Association of Manufacturers, and our financial services partners so we have the most impact and the widest reach.
We are coordinating our efforts with the Small Business Administration, the Commerce Department, the US Trade Representative and other government agencies.
Before we close, let's look at the big picture...the total value of U.S. exports.
We have come a long way since President Obama announced the National Export Initiative here last year.
In 2010, exports were up 16.7 percent putting us on track to double them by 2015.
This increase supported more than $1.8 trillion in exports—up from $1.6 trillion— And on our way to the President's goal of $3.2 trillion.
But we have more room to go.
So I just want to close with a few key points:
The power of exports goes well beyond the exchange of goods and services.
It lays the foundation for commerce, security and prosperity.
In today's global economy, what nations' build-- reflect what they value.
It reflects the vision for their countries' future.
Nations that build together—and buy from each other—are invested in ways that go far deeper than just business transactions.
When Ex-Im finances renewable power projects in Honduras and India....
When Ex Im finances the sale of locomotives to Pakistan.
and when Ex-Im finances infrastructure development in Brazil...
It sends a powerful message to the citizens of those countries...
And supports jobs and economic opportunities, not only here but in those markets as well.
Behind the Made in the U.S.A label is our nation's values and our ideals.
It's a brand built by the sweat and toil and pride of the American worker.
Workers like Jim, Keith, Darrell, Mun and David and many others.
And emboldened by the most innovative and creative companies in the world.
That is why at Ex-Im we are committed to working with more American businesses to get more products to more customers in more countries.
For us: Government at the speed of business is not a marketing slogan.
It is an operating principle that we strive for throughout our bank.
So that we can be your competitive edge in the global marketplace.
That is how we approach our work at Ex-Im.
And that's how - together -
We will Win The Future.