Statement by Ex-Im Bank Chairman at 2013 Annual Conference
WASHINGTON, April 4, 2013 /PRNewswire-USNewswire/ -- The following is a statement by Ex-Im Bank Chairman at 2013 Annual Conference (*As prepared for delivery).
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"Jobs Ahead: The Next Four Years of the Export-Import Bank"
Remarks by Fred P. Hochberg
Chairman and President, Export-Import Bank of the U.S.
Export-Import Bank Annual Conference
Washington, DC
April 4, 2013
Welcome to the 2013 Annual Conference of the Export-Import Bank of the United States.
In preparing for today, I thought back four years to January of 2009 – when President Obama put forth my name as Chairman and President of the Export-Import Bank.
I took the oath of office that May. In those four months, America lost three million jobs.
The economy was in a free fall. It was a shocking and frightening time.
We needed to take action.
That's exactly what President Obama and this Administration did.
And now, in 2013, thanks to you, America's business community, an additional 6.4 million Americans are at work in the private sector. We've added jobs in each and every month for the past 36 months.
Give yourself a round of applause.
America is coming back.
Two weeks ago, the President nominated me for another term as Chairman and President of Ex-Im. It has truly been a privilege and an honor. This is, by far, the best job I've ever had.
I look forward to my confirmation hearing and, if confirmed, the opportunity to keep working with you to grow American jobs.
***
Like so many of you in this room, I've run a business,
I know that your first thoughts over your breakfast cereal are not how many jobs you'll create by lunch. Your focus is on sales, product innovation, the competition, your margins – all key factors of your success.
You're looking for the next customer, the next sale. But if that customer or that sale is overseas, that's where we come in. If needed, we can help close the deal, add to your bottom line, and, most important, add jobs.
Together we can grow our economy and put more Americans back to work.
In his State of the Union, President Obama said, "A growing economy that creates good, middle-class jobs – that must be the North Star that guides our efforts."
That's exactly what we as Americans need to focus on – an economy that creates good, middle-class jobs.
And that's how we, at Ex-Im measure our success -- not by authorizations, not by matchmaking, or by trade agreements – but by private sector jobs -- in big cities and small towns– in companies large and small.
***
Behind each one of those companies is a story. One of those stories is on this stage. It's about Tetra Tech, of Pasadena, California –
With our financing, Tetra Tech is helping Sri Lanka build water supply systems that will provide 100,000 people with safe drinking water. This helps solve one of the world's most serious public health problems – permanently.
And it supports 400 U.S. manufacturing, construction and engineering jobs. Improving lives overseas and supporting jobs at home – that's what Ex-Im is all about.
Let me also tell you another story – about Miss Jenny's Pickles in Kernersville, NC. I met Jenny in 2010 at one of our small business export events.
Better yet, Jenny can tell you herself.
Here she is on CBS's "60 Minutes."
[show "60 Minutes" segment]
Take it from me, she makes a darn good pickle!
Not only will you find them in a thousand stores from coast to coast – but customers are munching on her pickles in Britain, Canada, China and Mongolia.
And Jenny is just getting started.
What held her and so many others back from exporting? The fear of non-payment by a buyer half-way around the world. Cash in advance only goes so far.
Export-credit insurance solves that problem.
They've shipped 13,860 jars overseas so far. Today, 12 more people now have a job and are drawing a paycheck.
Their story is what Ex-Im is all about.
After losing their jobs on Wall Street, Jenny and Ashley went from canning pickles on the dining room table to shipping pallet loads to China. We're delighted to have Jenny Fulton and Ashlee Furr here today.
Theirs is a familiar story . . . at least to me.
You probably can't see this, but Jenny and Ashlee are sitting here with my mother who started her company, Lillian Vernon, at our kitchen table 62 years ago. Jenny and Ashley, Lillian Vernon went on to become a public company and a household name.
So, never forget, that here in America, the sky's the limit.
***
From an idea at a kitchen table to a "now hiring" sign, success stories like Jenny's motivate us each and every day. That's the trajectory we're here to support.
In pursuit of American jobs, we finance everything from pickles to petrochemical plants.
In Saudi Arabia, Ex-Im is working with Dow Chemical and Saudi Aramco to finance the Sadara Project. Our direct loan of $5 billion is supporting 18,400 jobs at 70 U.S. companies – the largest number of jobs ever supported by a single Ex-Im transaction.
Moreover, $600 million of that goes for exports directly from small businesses – the largest single small business financing the Bank has ever done.
I'd like to thank Hala Al-Mohandes and her Ex-Im team for helping to make that happen.
At lunch today, Sadara will receive our "Deal of the Year" award for supporting those 18,400 jobs and keeping America's small businesses in the game.
More companies, exporting to more countries, finding more customers – that is what the National Export Initiative is all about.
Three years ago, on this very stage, President Obama launched the NEI, an unprecedented effort by federal agencies to promote, to finance, advise, advocate, and defend American exporters and their workers.
The result:
U.S. exports now top $2.2 trillion dollars. And 6.4 million more Americans now work in the private sector than three years ago.
But the real credit goes to the innovation and dynamism of American businesses and your workers.
Here at Ex-Im we have a role to play – financing American companies and their workers to go up against unprecedented competition – from foreign companies, from state-owned enterprises, and from foreign governments.
As you can see from this graph, our record-breaking results tell the story.
$35.8 billion in Ex-Im authorizations for 2012 – 2-1/2 times more than we did in '08. and 255,000 U.S. jobs supported in just one year. That's about a thousand jobs each and every workday.
It's also 255,000 families supported by good, middle class jobs – 255,000 families with new hope as America climbs back from the worst economic downturn since the great depression.
On top of that, we supported a record level of exports by women and minority-owned businesses – a 17 percent increase over the year before – the fastest growing sector in our small business portfolio.
One of these companies – Auburn Leather – is growing its exports of leather goods with our credit insurance.
Auburn's insurance covered shipments for the year as small as $8,800 to one shoe manufacturer in Thailand – guaranteeing that Auburn Leather would be paid. With exports fueling her sales growth CEO Lisa Howlett added 20 more jobs this past year.
Auburn Leather is just one of thousands of small exporters we finance every year. Last year, 88 percent of the exporters we worked with were small businesses.
You'll get a chance to meet Lisa at lunch today when she receives the award for Small Business Exporter of the Year.
As of Friday, we are six months into fiscal 2013.
We are off to a strong start – in fact, our best ever – $14.8 billion in authorizations. In six months it was more than we did in all of 2008 – supporting over 100,000 U.S. jobs.
***
We can expect even better U.S. export performance in the years ahead.
Why?
Around the world, the middle class population is exploding. According to the Brookings Institution, an average of 200 million people will join the global middle class every year for the next two decades.
200 million is about the size of the adult population of the United States today. Think about that – 200 million more people every year, creating enormous demand for new infrastructure – for power, telecommunications, highways, airports, sewer and water systems, and much more.
This is a huge selling opportunity for American exporters.
For example, this past year, we have signed agreements to provide $8.5 billion worth of loans for power projects – including the $5 billion memorandum of understanding President Obama announced this past November in Southeast Asia.
We're providing key financing for India's drive to make solar energy a major part of its power portfolio – for the Middle East to use its abundant sunshine – and for Australia to purchase its first privately-owned commercial satellite – all of these to meet the demands of the new global middle class.
Let's start with satellites.
In November of 2012, we financed the $471 million purchase of U.S.-built satellites to the Asia Broadcast Satellite Group in Hong Kong – working with Boeing, Space Systems Loral, and SpaceX.
For ABS, Boeing is building the first all-electric propulsion commercial satellite – a made-in-America breakthrough. Launch services are by SpaceX – a daring private venture that went from 160 employees eight years ago to over 3,000 today.
Six weeks ago, I toured the factory in Los Angeles where these satellites are being built. In this same building, American Motors built its iconic Nash Rambler in the 1950s – one of the great innovative products of that decade. Here's what it looked like in the '50s, when I was a boy – and here's what I saw in late February.
That's just one of a dozen satellite exports we have financed in the last three years, supporting 21,000 American jobs. Today, 60 percent of America's commercial satellite exports rely on Ex-Im financing, making satellites the fastest growing sector in our portfolio.
American businesses are proving the sky is not the limit.
***
Whether it's compact cars or complex satellites, innovation is what sets America apart. It shows our limitless capacity to invent and reinvent ourselves so we're able to meet new challenges. Innovative products and services keep America in the game despite fierce global competition.
As a result, in one community after another – "Now Hiring" signs dot the landscape.
And it's not just satellites. This "Hiring Now" sign is at the new GE locomotive facility in Fort Worth.
And it's not just GE:
Nancy Mercolino, CEO of Ceilings Plus, an Ex-Im award winner last year, told me that being an American-made product is a definite selling point. Because of export growth – jobs at her company increased from 65 to 201 in the last five years.
I agree with Nancy and many others – American-made is a definite selling point. We have the business talent, the workers, and the capacity to expand exports and put more Americans back to work
***
We recognize at Ex-Im that we need to do our part as well. That means continuous improvement in how we operate.
To keep us moving, we added the position of Vice President for Customer Experience – her name is Stephanie Thum. She's here with us today.
We need to serve our customers better and work smarter than ever before. In the last four years, we broadened our range of financial products – meeting the needs of emerging economies, growth industries, and small businesses.
Let me tell you about just two of those innovations.
Our growing use of capital markets has reduced costs and expanded our sources of funding for exports.
Express Insurance is helping small businesses worry less about cash flow or how they'll get paid. It gives them confidence to take the plunge into new markets.
The application form is one page. Here it is. Fill it out online. You'll get a decision in five working days.
Harvard's Kennedy School of Government liked it so much, it gave Ex-Im Bank its "Bright Idea in Government" award.
Ex Im VP Walter Kosciow and his team made this happen.
And that's not all.
Today, we approve 90 percent of all transactions within 30 days – and 98 percent within 100.
That's government at the speed of business.
Moreover, Ex Im is partnering with the Small Business Administration and Department of Commerce to make it easier for small businesses and their lenders to get the credit they need. The program is called U.S.-Global Business Solutions.
To paraphrase Shakespeare, we're a hardy band of brothers and sisters of about 400, who are flexible, entrepreneurial, commercial in approach, and customer oriented.
[still photo shown from Kenneth Branagh's Henry V]
That's a performance even Kenneth Branagh can't top.
I'd like to ask all the Ex-Im staff and Board Members to please stand. Let's give them a round of applause.
***
Among their top achievements is the Bank's phenomenal risk management performance.
The results: a default rate on the Bank's active portfolio of 0.336 percent. You heard that right – 0.336 percent. We report our default results to congress every 90 days.
We achieved that record through rigorous due diligence. We can never forget that the full faith and credit of the United States is one of our greatest assets.
Despite our extraordinary record over eight decades – in fact, because of it – we are determined not to jeopardize that record.
***
What's ahead?
I am optimistic about the progress we are making at Ex-Im and the vast opportunities for our exporters. We want you to export more American goods and services to keep our economy moving.
For example, America's energy revolution has confirmed our leadership as the premier provider of energy technology to the rest of the world. At the same time, it is sharply bringing down the cost of manufacturing here at home.
We believe in you.
Our team has and will travel to the ends of the earth to help close a sale when you need us. The faces change, the customs differ, sometimes the food is a little scary, but there is one constant the world over – they want to buy American.
We're here to make you a more successful exporter and create more jobs at home. We will not let a lack of financing stand in your way.
***
In closing, I love this cartoon from the New Yorker so much I had to share it with you.
A father is reading to his young son in bed. The son says, "Dad, think you can wrap it up? I have a long day tomorrow."
So before I wrap this up, one last point.
Our Congressional Charter expires on September 30, 2014. Hard to believe, we are half-way there – and the debate about reauthorization has already begun.
We had strong bipartisan support in the past, and strong support from you, the business community. But there remains a vocal minority who reject any government role in export finance.
They ignore the economic realities of our time and our successful record.
Against stiff competition last year, Ex-Im financed Kazakhstan's purchase of GE's most advanced locomotives – a transaction that supports some 5,000 U.S. jobs at companies large and small. Five other countries were competing to sell locomotives to Kazakhstan – and each one of those competitors had active government support to help close those sales.
That's the reality of global competition.
It is our job at Ex-Im to level the playing field. If we let our Charter expire, that would amount to unilateral disarmament. Nothing would please the other 59 export credit agencies around the world more.
Well, I don't believe in manufactured crises. I believe in manufacturing, period.
You already have enough uncertainty in your business.
Despite what some of our critics say:
Ex-Im Bank does not subsidize. We offer market-based terms. We are self-sustaining, our fees cover our expenses. Our loan loss reserves come from customer fees.
And best of all, we support good jobs here at home.
The result?
We consistently make what you and I would call a profit, but here in Washington it's called a "negative subsidy." We delivered $1.1 billion "profit" to the Treasury last year.
That means each of our 400 employees delivered on average almost $3 million to you, the taxpayers. On top of that, each supported 637 jobs.
***
So, to close.
We've come a long way since the early days of 2009, when our economy was hemorrhaging jobs.
In the next four years, the Export-Import Bank will build upon our success – financing the next Jenny Fultons to take their ideas from the kitchen table to customers around the world.
As President Obama likes to say, we won't stop until every American who wants a job, has one.
I think about the 12 jobs at Miss Jenny's Pickles – the 20 jobs at Auburn Leather – the 400 jobs at Tetra Tech – and the 18,000 jobs supported by Sadara,
I could go on and on.
Add it all up – and the Export Import Bank is making a real difference.
In the next two days of this conference, my goal is that we learn new ways – and build new resolve – to make that happen.
Let's work together to take full advantage of the great potential of the American people.
Let's increase exports and create more good jobs.
Thank you for joining us –
And have a great conference.
SOURCE Export-Import Bank of the United States
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