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Moderated by: James A. Harmon, Export-Import Bank

CHAIRMAN HARMON: I would like to start by thanking both Robert Lane, who I'm going to make comments on, who is the Chief Executive Officer of Deere, as you know, as well as Phil Condit, the Chief Executive of Boeing, for making a special effort to be with us today. Both have very busy schedules, and both had to move them around several times, I might, in order to make this doable. But I think they represent a very important part of what Ex-Im Bank does, and their experience and their work tell us a lot about what we all are addressing in the future.

So I'm going to start briefly by making some comments about both of them so you have the background, and then I will ask each to make opening comments. Then I have one or two questions I wanted to start with, and then we're going to turn it over to you all for any questions that you might have.

So let me first start on my left with Robert W. Lane, and I'm delighted that he has joined us. I had the great pleasure of visiting Deere only about a few months ago in Moline, Illinois. It's a very, very impressive plant to see, some of the sized equipment and the technology involved in this equipment. But Deere is the world's premiere producer of agricultural equipment, a leading manufacturer of construction, forestry, commercial and consumer equipment, and a business leader in parts, engines, financial services and special technologies. Bob was elected Chief Executive Officer of Deere in May of 2000, and became Chairman of the Board in August of 2000. He has served as President and Chief Operating Officer since January of 2000. Bob is the eighth person to head Deere in the company's 164-year history. Bob also has lead Deere's worldwide agricultural equipment division, and was previously the company's Chief Financial Officer. He was President of John Deere Credit, and has directed operations in most of John Deere's operations around the world.

Before joining Deere in 1982, Bob worked in corporate banking at First National Bank of Chicago, including assignments in Europe. This is a bit unusual. He was born in Washington, D.C. I rarely introduce anybody who was born in D.C. Bob graduated with high honors from Wheaton College in Wheaton, Illinois, and earned an MBA degree from the Graduate School of Business at the University of Chicago.

And maybe what I'll do is just give some background on Phil Condit, and then we'll ask them to make comments that way. As you can see, both of these gentlemen are uniquely qualified to lead their companies.

And I'm delighted really to introduce Phil Condit, Chairman and Chief Executive Officer of the Boeing Company. Phil became President of Boeing and a member of its Board in 1992. He added the title of Chief Executive Officer in 1996, and was elected the seventh chairman of the company in its 82-year history in 1997. Under Phil's leadership, Boeing has grown to be the world's largest aerospace company, employing more than 198,000 people, and serving customers in 145 countries. Boeing is the largest exporter in the United States, with revenues of more than $51 billion in the year 2000. Phil has held nearly 20 assignments during his 35 years of service to Boeing. He is the author of several published papers on commercial aircraft technology, and holds a patent awarded in 1965 for the design of a flexible wing called the sail wing. He also led the team that launched the wide-body Boeing 777 airplane, and he pioneered management concepts that integrated design-build teams of customers, suppliers and employees, to design and product the 21st century jet.

Phil received his bachelor's degree in mechanical engineering from the University of California at Berkeley in 1963, a master's in aeronautical engineering from Princeton University in 1965, a master's degree in management from MIT in 1975, and in 1997 Phil received a doctorate degree in engineering from Science University of Tokyo, where he was the first westerner to earn such a degree.

Among his many awards for engineering and management achievements are the 1997 Ronald H. Brown Standards Leadership Award for advancing international standards, and the Japan-American Society 1997 International Citizens Award for global leadership in the private sector.

A native of Berkeley, California, Phil has been an aviation enthusiast his entire life, and, interesting, earned a pilot's license at the age of 18.

So I'm delighted to introduce them both, and who would like to go first?

MR. CONDIT: I'm absolutely delighted to be here. For a company doing business in 145 countries, trade is a absolutely crucial element, and Ex-Im, a crucial element of that, and besides, since I own two Deere tractors, I thought maybe I could sell an airplane along the way. So we'll work on that as we go along. Trade is absolutely crucial to us, and in that, Ex-Im has been very, very important. About 50 percent of total Boeing revenue is exported. 70 percent of commercial airplanes are exported, so export is a critical part of our business.

Over the last 5 years Ex-Im's loan guarantee program has made it possible for overseas customers to secure loans from the private financing market, and that has rolled into the purchase of about $3.6 billion every year on an average basis. I know a lot of you are very familiar with the loan guarantee program, but I think it is critical to note that it represents 90 percent of the Bank's activity, not direct loans, and it is the provision that allows those customers to secure commercial loans, and it has been an extremely successful program for us.

Let me just give you a couple examples of why Ex-Im is so important from our perspective. One of them, the downturn in the Asian economy of just a few years ago. We found ourselves with a number of airplanes cancelled, and that had an impact on our revenues of about a billion dollars. The thing that really made a difference was Ex-Im, because a lot of the remaining customers in Asia were able to secure private financing with the aid of Ex-Im guarantees, and therefore, were able to take deliveries, and thus dramatically reduce what could have been a severe impact. The other thing, of course, is we look out, what we see happening is that the US market for commercial airplanes is relatively stable, relatively low growth rate, it has in fact matured. The high growth rate markets are in other parts of the world. And so this is not a stable situation, but one where we think exports will be a growing part of our commercial airplane business.

Let me make one sort of final point, and I think for me it is the critical one. We often think of Ex-Im as aiding big companies, companies like Deere and Boeing. The reality is that Boeing has several tens of thousands of suppliers. Last year we placed with US companies about $15 billion worth or purchase orders. Those people supplied about 60 percent of the parts on our airplanes, many of them small businesses. They are in fact the hidden exporters that are buried into every Boeing airplane. And we've tried to illustrate it. I hope a number of you have seen the airplane model with all of the names of our suppliers written on it. We've tried to help them understand that every export is an export for them. And while they ship domestically, they really are exporters every bit as much as Boeing is.

I can give you lots of stories of where Ex-Im has made a difference, or I can give you stories where lack of competitive financing, because of the export credit authorities in other countries offering a better product, has lost us business. So I am very heavily on the side that says we need to support Ex-Im, the reauthorization of Ex-Im, a budgetary level that is at least as high as it has been, if not greater, and I think we can make a very convincing economic argument that greater funding in fact will create jobs in the US, will create jobs in small businesses that are suppliers to the industries that are the end-product shippers.

So that's sort of a quick summary of why Ex-Im is important from my vantage point.

CHAIRMAN HARMON: Thank you, Phil.

MR