U.S. Conference of Mayors Panel on Exports and Ports
Fred P. Hochberg
Jan 19, 2013 – Washington, D.C.
Thank you, Mayor Brown.I really appreciate the chance to talk with you about how important your cities are to our export economy and to the Export-Import Bank.
However, it's always a challenge to follow Francisco Sanchez of the Commerce Department on any program.He's a creative, dynamic force in this country for export promotion.But I get lot of energy just from being around him - so this is good.
Best of all about being here, is that I get to meet with the people who really count.
Mayors are key customers here at the Bank because of your daily interaction with small business leaders in your community. The Mayor's office is often the front line of export promotion.
I'll begin with a few facts about the Export-Import Bank.
We're an independent federal agency formed in 1934 by President Roosevelt to provide financing to overseas buyers of U.S. exports.Our budget comes from the interest and fees we charge customers - so there's no cost to taxpayers.
In fact, we return excess earnings to the Treasury.Last year, we sent back $803 million [DR1]- to help reduce our budget deficit.
The Ex-Im Bank steps in where the private sector is unwilling or unable to provide financing - and the export finance agencies of our competitors could otherwise win the bidding.
We provide loans, guarantees and insurance to ensure that U.S. exporters have access to the financing that will help them grow and create jobs.That's critical - especially for small businesses.
Last year, Ex-Im provided a record-high $35.8 billion in new financing - up 2-1/2 times from only four years ago.
In the first quarter of this fiscal year, we hit another $7.5 billion in new financing - and are well on our way to another historic year.
In the same quarter, we also had a record 43 percent increase for working capital and credit insurance for minority and women-owned exporters - and increased by half all financing for small businesses.
But the most important number of all for you is 950,000. That is the number of export-related jobs we've supported in the last four years - including 255,000 jobs in the last year alone.
That is 950,000 families supported.
950,000 producers helping to fuel the economic recovery in their cities and towns.
And we are just getting started.
Our approval only goes to transactions that create good jobs - that help us reach President Obama's National Export Initiative goals of doubling exports by the end of 2014 and creating two million more export-related jobs.
It's also critical that American exporters and workers get their fair share of surging demand in the world's emerging economies - from sub-Saharan Africa to India - where tens of millions of people are joining the middle class each year for the first time.
Their needs are exploding for paved roads, commercial aircraft, power plants, electrical grids, communications satellites, sanitary water and sewer systems, and all other types of infrastructure required for advanced societies.
The estimates of these needs in coming years are staggering, and the opportunities for our exporting businesses of all sizes match them.
This is a historic moment for American businesses that we must take full advantage of. We want these goods and services to be stamped Made in the USA
And we've begun to do just that.
Let me give you some examples of what Ex-Im has been doing.
GE Transportation makes world class locomotives - diesel and electric - that other nations are eager to buy for their fuel efficiency and low emissions.
Ex-Im has financed large purchases of these locomotives for Kazakhstan, South Africa, Mexico and others.These sales contribute to our export sales turnaround in recent years.
But their biggest impact has been on Erie, PA, where GE Transportation's factory is located.The last order alone has added or sustained some 5,000 related jobs there and elsewhere, according to GE.
Orders have been so strong that GE Transportation has opened a second locomotive plant in Fort Worth, TX - creating 500 new manufacturing jobs there.
Ex-Im has been key to these new orders because of the long term financing required and the country risks where some of the sales have been - financing that commercial lenders tend to avoid.We're able to fill that void.
Later this month, I'll be in Detroit to help open our new Export Finance Center to help expand the range of exports from that region to the rest of the world[DR2].
We've provided numerous large financings in Michigan for such exporters as Ford Motor Company and Dow Chemical - but three quarters of our transactions have been for small businesses.
For example, we provided financing for the Viking Corporation to export its fire-fighting sprinklers and valves, Lakewood Process Machinery to export its fruit and vegetable processing equipment, and Filtra Systems to export its industrial wastewater filtration systems.
But we don't just deal in jumbo jets and power plants. We are also helping to create American jobs with products as small as fish eggs.
I'll explain.One of my favorite customers is Dan's Fish of Sturgeon Bay, WI - on another Great Lake, Lake Michigan.
In the last two decades, Dan Schwartz used a $500,000 SBA export working capital loan and Ex-Im Bank multi-buyer export insurance to go from zero to $10 million in sales of Great Lakes fish and caviar to Europe, Russia and China.
With now 15 employees, Dan has grown to be Wisconsin's largest exporter of packaged freshwater caviar and frozen fish - with a fulltime branch in Tallinn, Estonia.All this was a result of his creative products and use of SBA and Ex-Im resources.
If there's a theme to our approach at the Export-Import Bank, it's our emphasis on developing local relationships.We make a big effort to reach out to key cities across the country - especially the small businesses of those cities.
Our big multi-billion-dollar transactions get the most attention.They included a petrochemical plant with Dow in Saudi Arabia, an LNG export complex in Australia, and sales of Boeing aircraft to Ethiopian Airlines.
But 88 percent of our transactions last year went to small businesses - amounting to over 17 percent of new financings - and we're increasing our efforts to boost that figure even higher.[DR3]
Our goal is that at least 20 percent of our financing goes to small businesses.
To help reach that goal, about two years ago, we began a series of town-hall-style discussions, that we call Global Access Forums.These provide small businesses with the resources and encouragement they need to get started or expand as exporters.
So far, we've held 42 Global Access Forums, attended by well over 1,000 businesses.They've helped increase our number of small business financings to a record-high of 3,313 by the end of September.
If we haven't been to your town, we'll get there soon.
To help that growth, last year we added three new regional Export Finance Centers, with staff, in Atlanta, Minneapolis and Seattle.As I mentioned earlier, we're opening a fourth one later this month in Detroit.
That brings to 12 the number of our staffed Export Finance Centers to serve especially active export metropolitan areas - a number we want to increase in the months ahead.
The expansion of finance centers is part of our deployment of Ex-Im staff to bring them closer to our small business customers - where we can deliver technical assistance, bring them in touch with our network of financers, and provide financing quicker and more directly.
As part of our drive to improve customer service, we now approve 90 percent of all applications within 30 days - and 98 percent within 100 days.
One of our main small business products, Express Insurance, has a one-page application.Once you hand that in, we'll provide a policy quote and decision within five working days.
We are piloting another small business product, the Global Credit Express, that not only provides working capital loans up to $500,000 each - it can help fund your city's economic development agency.
For every small exporter you bring us, who gets approved, Ex-Im will pay your city agency $2,000.Bring enough of them to approval, and you can fund a new staff position.
We'd be glad to talk with any additional cities interested in this pilot program.
We have other new products in development to improve our customer service.We call this initiative government at the speed of business.
These improvements set the stage for our next level of support for American exporters.
With the increase in our total exposure ceiling to $140 billion - the amount of outstanding financings - Ex-Im has room to increase new authorizations in the next two years by over $30 billion.
These will support many of our big-ticket exports, like Boeing aircraft - but also will support hundreds more small businesses with products and services to sell overseas.
That's where the two of us come in - Ex-Im Bank and America's mayors - working toward our common goal of increasing good jobs in your community - and overcoming our nation's economic challenges.
In other words, we want to do business with you.I look forward to your questions and comments.