Skip to main content
Sister Publication Links
  • Automotive News
  • Rubber News
  • European Rubber Journal
Subscribe
  • Login
  • Register
  • Subscribe
  • Current Issue
  • BEST PLACES TO WORK
  • News
    • MID YEAR REPORT
    • TIRE MAKERS
    • HUMANITARIAN
    • COMMERCIAL TIRE
    • GOVERNMENT & LAW
    • MERGERS & ACQUISITIONS
    • OBITUARIES
    • OPINION
    • SERVICE ZONE
  • ADAS
  • Data
    • DATA STORE
  • Custom
    • SPONSORED CONTENT
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
    • RUBBER NEWS EVENTS
  • Resources
    • ADVERTISE
    • AWARDS
    • CLASSIFIEDS
    • DIRECTORY
    • SHOP FLOOR
    • Best Places to Work
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
October 10, 2014 02:00 AM

If Ex-Im Bank shuts, Boeing sees 'Armageddon'

Bloomberg News
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    By David Fickling, Bloomberg News

    CHICAGO (Oct. 10, 2014) — Boeing Co. said closing the U.S. government's Export-Import Bank is “outside the realm of realistic” and the aircraft maker isn't making contingency plans for that risk.

    “How would you plan for an Armageddon?” Kostya Zolotusky, managing director for capital markets and leasing at the Chicago-based company, said in Sydney Oct. 7. “We're not planning for an Armageddon. You can't plan for an Armageddon.”

    The Export-Import Bank is a little-known federal agency that finances many companies' high-ticket sales to foreign buyers. Its loans and guarantees supported $8.3 billion of Boeing's aircraft sales last year; it must be reauthorized by the U.S. government in June, after midterm elections in November where Republicans may win control of both houses of Congress.

    Jeb Hensarling, who oversees the Ex-Im Bank as Republican Chairman of the House Financial Services Committee, said in June that “we cannot reauthorize the status quo” as the bank may be “guilty of corruption,” cronyism, and sending taxpayer money to foreign interests.

    Abolishing the 80-year-old lender, which helped fund the Pan-American Highway and European reconstruction under the Marshall Plan, is a litmus test for small-government conservatives affiliated with the Tea Party movement, including Mr. Hensarling. They argue that its role could be filled by private lenders instead.

    Last June Boeing, along with Illinois-based Caterpillar Inc., began scrambling to block a move by conservative Republicans in Washington, D.C., to kill the U.S. Export-Import Bank.

    About 65 percent of the bank's long-term loan guarantees last year supported the purchase of Boeing aircraft, according to the Congressional Research Service. Such guarantees have included $1.1 billion to support the sale of 27 737-900ERs for a unit of Indonesia's PT Lion Mentari Airlines in March 2013 and a $3.4 billion guarantee for Air India that's been challenged in court by Delta Air Lines Inc. (DAL)

    Countering turbulence

    The strength of funding from aircraft-backed loans, commercial banks trying to diversify away from home loans, and leasing companies and airlines taking advantage of lower interest rates, would help ride out any disruption, Mr. Zolotusky said.

    “The commercial markets are as healthy as they can be and we don't plan contingencies that are macro-market disruptive,” he said. “When you look at the debate, the passions exaggerate the reasonableness and the pragmatism that people will arrive at eventually.”

    This Bloomberg News report and appeared on the website of Crain's Chicago Business, a sister publication of Tire Business.

    Related Articles
    Ex-Im renewal may have enough support to force House vote
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    Most Popular
    1
    Canada court rules for Michelin in tire trademark case
    2
    Grupo Tersa's Rodrigo Valle Hernandez dies at 69
    3
    Tire Business ranks the Top 75 Tire Makers of 2023
    4
    Michelin to roll out tires with recycled plastics by 2024
    5
    Hankook upending tire design paradigms with i-Flex airless tire
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • Instagram
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    Reader Services
    • Staff
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • BEST PLACES TO WORK
    • News
      • MID YEAR REPORT
      • TIRE MAKERS
      • HUMANITARIAN
      • COMMERCIAL TIRE
      • GOVERNMENT & LAW
      • MERGERS & ACQUISITIONS
      • OBITUARIES
      • OPINION
      • SERVICE ZONE
    • ADAS
    • Data
      • DATA STORE
    • Custom
      • SPONSORED CONTENT
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
      • RUBBER NEWS EVENTS
    • Resources
      • ADVERTISE
      • AWARDS
        • Best Places to Work
      • CLASSIFIEDS
      • DIRECTORY
      • SHOP FLOOR
        • BALANCING
        • DEMOUNTING
        • SAFETY
        • TIRE REPAIR
        • TPMS
        • TRAINING
        • VEHICLE LIFTING
        • WHEEL TORQUE
    • DIGITAL EDITION