Western Governors' Association Annual Meeting
As prepared for delivery
Chairman Fred P. Hochberg
Jun 10, 2014 – Colorado Springs, CO
Good morning. Thank you all for inviting me to join you here today.
I just got in last night from DC, so I thought I'd bring along a letter from the President to share with you.
And I quote: “I have signed H.R. 5548, the Export-Import Bank Act… which extends the Bank's charter... This sends an important signal to both our exporting community and foreign suppliers that American exporters will continue to be able to compete vigorously for business throughout the world…”
That's a pretty flattering letter. It's dated October 15th, 1986—and signed by the President of the United States, Ronald Reagan.
Just a little food for thought for some of the folks who might be on the fence when it comes to the Ex-Im Bank and our role in promoting a pro-growth agenda.
Our mission at Ex-Im is to equip U.S. businesses in your states with the financing tools they need to confidently enter global markets—and to create new jobs here at home. And while we work with many of the largest employers in the states you represent, about 90% of the transactions we authorized last year supported American small businesses.
In fact, I've had the pleasure of hosting what we call Global Access Forums, or “GAFs,” in many of your states. Those forums provide a chance for local small businesses to learn about export opportunities and get connected with the tools they need to access new markets. The first time I met Governor Hickenlooper, in fact, was at a GAF in Denver. Tom Vilsack and I joined the Governor to reach out to some small business owners right here in Colorado.
To date, we've done nearly 70 of these GAFs—I've been to Boise, to Indio, California, and most recently I was in Fargo—and one of the things I'm hoping to do is reach every one of your states. On that note, I want all of you to get to know two members of my team who are here: Scott Schloegel, who runs our congressional affairs office, and Brad Carroll, our head of communications.
If we haven't met your economic commissioners or commerce secretaries yet—we want to fix that. We want to meet with you to talk about how we can do everything we can to support your small business communities in reaching new markets and adding even more jobs.
Let me give you an example of what that support looks like for real companies, real families, and real communities.
Severlift is a high-tech small business in Phoenix—as the name suggests, they manufacture lifts for data center servers.
It's run by Ray Zuckerman—and it's a true family business. A little over a year ago, I flew out to Phoenix for one of our Global Access Forums—I remember it was even hotter than it is now. I had the opportunity to meet Ray's wife and son, who works with him, and tour their facilities.
When they started up 12 years ago, their manufacturing base was—not surprisingly—in China. Thanks to the sales boost they enjoyed after breaking into new markets with Ex-Im financing, they've now moved much of their manufacturing back to Arizona—and they've doubled their number of U.S. employees in the process.
Let me tell you what we do for Ray's company. When Ray sells overseas to places like Britain and Turkey, he ships his products on terms—customers pay in 60 or 90 days. That leeway gives customers a chance to put those goods to work, and then later remit the money back to Serverlift.
This provides a big advantage. But there's a risk, too—it's daunting to go collect on an invoice halfway around the world.
That's why we insure Ray's receivables—the same way that Ray insures for things like fire and theft. We give Ray and his wife a good night's sleep.
That's why Ex-Im exists—to fill in gaps when private banks are unable or unwilling to provide financing, and to ensure that American companies are in a position to compete toe-to-toe in overseas markets.
Entrepreneurs in your states should be focused on innovating and creating great products. They should be thinking about how to seize new opportunities in an increasingly globalized world. They shouldn't have to think about competing against whole countries!
Ray can hold his own against any company—in China or elsewhere—but he shouldn't have to compete against ‘China, Inc.'
That's where we come in—Ex-Im's goal is to level the playing field for U.S. exporters, so that the products made in your states have the opportunity to succeed on their merits against foreign competitors.
Air Tractor is another small business in Olney, Texas. Anybody here been to Olney, Texas?
Their main overseas customers are farmers in Brazil and Argentina. Now, farmers have always faced a tough time when it comes to getting credit. And farmers in Latin America are no different.
Before partnering with Ex-Im, Air Tractor exported about ten percent of their crop dusters and firefighting planes. Today, it's more than half.
And that growth has empowered them to add more than 100 middle class jobs in North Texas. That makes a huge difference in a community of 3,000 people. For a town with two traffic lights and one Dairy Queen, Air Tractor is big business.
I could go on and on with stories from each of your states about Ex-Im's role in empowering businesses to succeed globally and add jobs locally.
But you know what? The numbers speak for themselves.
Exports from western states that were supported by Ex-Im financing created or sustained 760,000 jobs over the last five years.
Just last year, Texas, California, Washington, Colorado, and Oklahoma all set new export records. New Mexico has more than doubled its export output since 2009. And Utah, Nevada, Nebraska, and the Dakotas have seen greater than 50 percent increases in exports over that time.
You're setting the pace for the country to follow. I think that deserves a round of applause.
Now, we've got critics out there who like to derisively refer to us as the ‘bank of Boeing.' To that I say: we're the bank of any eligible company that wants to sell more American products and add more American jobs.
We're definitely the bank of Serverlift and the bank of AirTractor. We're the bank of small businesses in hundreds of American communities—including many small suppliers in your states—in towns where the benefits of some of our largest deals echo the loudest and longest.
By empowering your local companies to reach greater heights of success, we're strengthening countless American communities.
But as we do so, we also have to remember that we aren't alone in the world.
Ex-Im is one of about 60 export credit agencies across the globe. Other countries'versions of Ex-Im aren't bound by the same accountability standards that we are. We're the most transparent export credit agency in the world. And the others certainly don't have to fight for their lives in Congress every few years.
Now, we want to be held to the highest of standards. It's how we ensure that we continue to serve the American people responsibly. But it also creates a reality in which other countries don't have to play by the same rules. They can drum up financing terms that threaten to shut out American-made products.
Global competition is getting fiercer and fiercer. And at the same time, more and more countries are turning to exports and export credit as a solution to their financial struggles. So we need to do everything in our power to ensure that U.S. exporters have a level playing field.
The world has changed. Other countries are seeing the global landscape just as clearly as we are. And they're responding by investing heavily in their export credit agencies in order to get a jump on the competition and add jobs.
Meanwhile, here in the U.S., Congress is toying with the idea of doing the exact opposite. I'm willing to bet that we're the only country in the world having a conversation about possibly making our export bank less robust.
Everyone is gearing up—America alone is talking about standing down.
It reminds me of an old joke.
An elderly man is driving down thehighway, and he gets a call from his wife.
Honey, she says, be careful out there! I just saw on the news that there's a car out there going the wrong way on Route 95!
And the husband says, Are you kidding? It's not just one car—there are hundreds of them!
That's the situation we find ourselves in when we talk about unilaterally disarming in the race for export success. And just like the old man on the highway, going the wrong way could be disastrous for our long-term prospects—and for small businesses in your states.
Let me tell you about Steve Wilburn.
Steve's a veteran whose small renewable energy company, FirmGreen, has created 165 jobs in California and at suppliers in seven other states since partnering with Ex-Im.
A $48 million loan from Ex-Im empowered FirmGreen to bring their innovative ideas, equipment, and services to Brazil. And the Novo Gramacho biogas project will convert dirty methane gas into clean, compressed biomethane gas.
That's not just good for the environment. It's good for the U.S. economy, and the communities across America made stronger thanks to an infusion of new jobs.
I had the opportunity to visit the Novo Gramacho site just a couple of weeks ago—this is a game-changing technology. Steve is looking at two more sites in Brazil. His company has emerged as a global leader in its field.
But two months 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 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.
It sounds crazy, but it's a direct consequence of the sort of reckless driving we're flirting with right now.
Now, we're working with Steve to get the project back on track. But we shouldn't have to be doing that—he shouldn't have lost that business in the first place.
And frankly, that's why Ex-Im's reauthorization is so important.
We've been at the side of companies like Steve's in your states for 80 years. And we want to stay there, supporting job growth.
Unfortunately, not everyone understands the value 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, and despite the fact that we run a surplus for the American taxpayers.
That's right—we don't cost the taxpayers a dime.
In fact, we generated a surplus of one billion, 57 million dollars for taxpayers last year. I was so proud of that number—one-zero-five-seven—I made it the password to my iPhone. I hope you'll keep that just between us.
This fall, our charter is set to expire. Unless Congress acts, we'll be forced to close our doors on October 1st.
The President has asked for Ex-Im to be reauthorized for five years, with a $160 billion lending cap. Those five years would deliver added confidence to countless exporters in your states—so that entrepreneurs like Steve Wilburn won't have to face the prospect of a lost sale due to uncertainty.
Delivering that confidence shouldn't be controversial.
Supporting American job growth shouldn't be controversial.
Keeping America competitive in the global economy shouldn't be controversial.
And if you look at Ex-Im's history, it hasn't been controversial when we've gone through reauthorizations in the past.
Our critics will tell you that Ex-Im picks winners and losers.
Well, a look at our record will show you that we actually do pick one winner every single time: the American worker.
If you make it in America—if you put Americans to work—we want to put you in a position to win deals against overseas competitors. We want to empower innovators like Steve Wilburn, Ray Zuckerman, and Dave Ickert, VP of Air Tractor.
That's what we're really about—no matter what our critics might try to claim. That's where 90 percent of our customers come from: the small business community—the engine of American job growth.
As state leaders, you understand what that means. You can't afford to be anything but pragmatic when it comes to job growth in your states. And you can lend your voices to the critical conversation surrounding Ex-Im—so that we can continue to level the global playing field for American small businesses.
We can't win that fight alone. But I plan to fight to make sure we're still there supporting jobs in your states for many years to come.