U.S. Chamber of Commerce Leadership Series
As Prepared for Delivery
Fred P. Hochberg
Oct 22, 2009 – Washington, D.C.
Thank you David. As he mentioned, David knows Ex-Im Bank very well having spent 12 years working for the Bank earlier in his career. Let me start by saying President Obama has been and continues to be very focused on addressing the economic crisis facing our nation and he has given me an exciting opportunity-- to lead Ex-Im in the most important time in the Bank's 75 year history. The President has supported the financial services industry, the housing industry and autos, and he is focused on addressing climate change by growing the economy in part through encouraging green technology. He continues to push for health care reform -something he and I believe is essential for our long term prosperity.
Through all these actions, our Administration is working to stabilize and improve the economic fundamentals so American business can maintain its global economic pre-eminence.
Now, according to some recent newspaper accounts, there are apparently some disagreements between the Chamber and the White House,
And although there are things about which the Chamber and the Administration disagree, we all can agree on one very important issue: we want to get our economy back on track, and we know that increasing exports is critical to accomplishing that goal.
Recently the President said:
“In difficult economic times, it is even more important for American industry to take advantage of every opportunity for export-driven growth…. he went onto to say and
I will work to open more markets to U.S. exports...
President Obama has personally told me he is looking to Ex-Im to have an increased impact and make a difference -
And that's what we did in the year that just ended.
I'd like start by sharing our results for 2009, and my thoughts on our opportunities going forward.
2009 was the biggest year in the bank's history:
- we authorized over $21 billion in transactions -
- that represents a 50% increase over 2008.
- In small business, we authorized $4.3 billion worth of transactions - also a record.
- And equally important, we added over 500 new customers this past year.
- Our transactions were diverse in size, structure and industry.
- Ex-Im Bank financed airplanes in Egypt - for the first time in 25 years,
- helped export solar technology to Korea,
- created a capital markets facility that was lauded by the Chamber and first employed in a transaction for an airline in the UAE,
- and provided credit support for a small company in Brooklyn, NY, Lee Spring, a high quality spring manufacturer exporting to China.
All that took place in a context in which U.S. exports declined by approximately 30%.
Ex-Im Bank stepped in and increased financing by 50%.
As you may know, U.S. exports account for only 13% of GDP. The U.S. is the world's largest manufacturer, but we are only the 3rd largest exporting nation -- so we need to and can do better.
U.S. consumption, which has driven growth in recent decades, will not be enough to ensure the competitiveness and health of our domestic industries. Exports will increasingly be a key component of ensuring further economic growth. For many years, 70% of our GDP has been fueled by consumer demand --I don't believe this is sustainable for us, or the global economy.
So, my vision for Ex-Im Bank is straightforward: to expand the number of exporters and increase the number of countries they export to.
As a part of my efforts to implement that vision, we are in the midst of a series of eight “Exports Live” seminars that kicked off in New York and Boston two weeks ago.
Representatives from Commerce, TDA, OPIC, USTR, and SBA joined with us to expand the number of companies that are exporting their way to increased sales and profits. Together we are providing tools and techniques to help American companies compete in the global marketplace.
So far I have been very encouraged by what I have learned at these events. For example, Demetech, a Florida-based manufacturer of surgical supplies now exports to over 80 countries. In fact, company after company in NYC and Boston told me that they were optimistic about their export prospects in 2010. Granted that is not a scientific sample, but indicative of the positive impact that exporting is having while domestic sales suffer.
On Monday, I travel to Miami, then on the Houston for the next two events, and then on to Chicago, LA, Seattle, and Detroit. I hope you'll encourage your colleagues to join us there, where we are working to build awareness and increase exports.
As I mentioned, our vision for Ex-Im Bank is to expand the number of exporters and increase the number of countries they export to.
What does that mean?
- It means we will expand the number of banks that offer Ex-Im Bank products
- It means we are adding resources to those countries where we see even greater opportunities for Ex-Im Bank:
- countries, with growing economies,
- countries with infrastructure projects,
- countries where we can make a difference—
- countries such as : Brazil, Columbia, India, Indonesia, and Vietnam.
We also see potential for financing greater numbers of exports in specific industries where there is great demand for U.S. goods and services, industries where American made products have a distinct and competitive advantage--
- construction machinery,
- medical equipment and supplies,
- turbines and power transmission to name a few with high demand worldwide.
We are also constantly working to find innovative solutions to the financing challenges facing American exporters. Most recently, as the Chamber acknowledged in its supportive press release, we provided credit support for a bond offering to finance the purchase of three Boeing 777 aircraft by Emirates Airlines. This transaction accomplished a number of goals:
- It provided an additional source of liquidity in a period of tight credit.
- It provided incentives for commercial banks to offer competitive rates.
- It diversified sources of funding available for Ex-Im Bank guaranteed transactions.
- The result: the buyer achieved a fixed interest rate that was over 100 basis points lower than traditional bank financing - which made our exports more competitive.
- And this morning, we closed on a similar transaction with GOL Airlines of Brazil.
I want all of us at the bank to search for ways to make it easier to do business with us.
We are listening to our customers, constantly gathering information from business and government leaders both at home and abroad.
I recently returned from a trip to China and Korea:
What did I hear? Over and over again? “People want to trade with America” They want the quality, the innovation and the value that U.S. goods and services provide.
For example, remember Lee Springs, the company I mentioned earlier today? Well, they are successfully selling into China despite the existence of over 2,000 Chinese spring manufacturers. We see additional potential in China, particularly in healthcare and infrastructure. And China - along with many countries, are building and rebuilding their infrastructure every day. Between now and 2012, China expects to spend $428 billion on rail expansion alone. Harsco and GE are just two companies that are benefitting from China's stimulus program.
In Korea, I saw first hand the potential for U.S. exports of solar energy. Ex-Im Bank has been instrumental in U.S. businesses establishing a foothold in solar power in Korea where we are a leading supplier. It is a growing and profitable market.
A few days ago, I was standing on the roof of a factory outside Seoul with a young woman, Gina Yoon, who owns a solar energy company, KC Energia. THAT is the 21st century: a woman running a company in male-dominated Korea. But here, up on top of it all - there are quite literally many, many rays of hope for the American economy. The sun was shining down on American-made solar panels bringing solar power to a factory.
It's how American industry is adapting. And Ex-Im Bank is right there with you.
As I mentioned, we want to help companies large and small increase exports into new markets. We help companies such as Boeing, GE, and John Deere sell into markets where conventional finance won't go - tough markets - competitive markets -markets where we make a difference between making a sale and losing a sale.
We also work with small companies: Air Tractor - a manufacturer of crop dusters in Texas; Spire Solar—a solar equipment manufacturer in New Hampshire; and Rastelli Brothers - a New Jersey restaurant supply company that now exports food for troops.
We help open markets for U.S. manufacturers, who provide superior products - superior quality and deliver real value for foreign buyers.
In light of the continuing strained credit conditions, the need for Ex-Im Bank is as great as it was when the bank was established during the Great Depression. In its history, the bank has proven its ability to meet daunting challenges. From playing a key role in the implementation of the Marshall Plan, to the Mexican and Asian Debt crisis, Ex-Im Bank has a history of stepping into the breach to promote U.S. business interests abroad.
Going forward, Ex-Im Bank will expand its ability to help more U.S. businesses secure financing to export goods and services to more places while at the same time keeping a watchful eye on taxpayer money.
Ex-Im Bank is the right agency in the right place at the right time.
As the bank marks its 75th anniversary, it has played and will continue to play an important role in keeping our country moving forward by promoting American ingenuity abroad and helping to create jobs here at home.