Industry commentators are applauding America’s manufacturing resurgence and rightfully so — it hasn’t come easy. We’ve been fighting an uphill battle in a global marketplace that isn’t always fair or predictable. But manufacturers here in Iowa and around the country are still succeeding. Most of the credit goes to our workers, who are highly skilled and more efficient than ever. That shouldn’t surprise folks.
What is surprising? The fact that a little-known government agency called the U.S. Export-Import Bank is creating manufacturing jobs in Iowa at no cost to taxpayers but some in Washington want to shut it down.
In Iowa, manufacturing exports make up over 40 percent of manufacturing output. We rely on buyers from countries all over the world to grow our businesses. That growth allows us to hire more workers and innovate here at home. But exporting isn’t always easy, especially for smaller companies. It can be difficult to find financing or compete with foreign manufacturers subsidized by their governments.
That’s where Ex-Im steps in.
Ex-Im is a small government export credit agency that helps finance the sale of U.S. goods to foreign buyers. While many companies are able to find financing in the private sector, others cannot, and it’s by no fault of their own. New bank regulations, customer demands, or competition from foreign ECAs like China can all make private sector financing unrealistic.
By filling these financing gaps, Ex-Im Bank helps more Iowa manufacturers compete and win in the global marketplace. Take Vermeer, a manufacturer of large trenching and utility installation equipment based out of Pella. There’s incredible demand in emerging markets for Vermeer’s products, where rapidly growing communities need high-quality equipment to improve infrastructure.
But private sector banks don’t always understand the markets Vermeer is entering. Ex-Im loan guarantees give lenders the assurance they need to finance the deal.
Since 2007, Ex-Im has directly benefited more than 50 companies in Iowa like Vermeer, enabling $237 million in export sales. Those exports have supported nearly 1500 jobs and fueled our state’s economic growth.
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Other companies here indirectly rely on the bank through their suppliers. Companies like Waverly-based United Equipment Accessories and Cedar Rapids-based Rockwell Collins manufacture goods that are exported by their customers. Rockwell Collins’ aviation electronic systems — which include hundreds of components supplied by smaller enterprises — are in nearly every air transport aircraft in the world. If Rockwell Collins’ customers didn’t have the support of Ex-Im Bank, thousands of supplier jobs would be in jeopardy.
Nevertheless, some Washington politicians still want to shut the agency down. You might be wondering why, and honestly, we wonder too. They say it’s a risk to taxpayers, yet last year Ex-Im made $675 million despite a default rate 12 times lower than the private sector.
There may be some things the U.S. government gets wrong, but this is one thing it gets right.
Ex-Im is a small, efficient agency that supports American business and workers at no cost to taxpayers. The Bank’s charter expires June 30 and if it’s not reauthorized, Iowa is going to feel the pain. Let’s not give up the gains Iowa manufacturers have made in the last 10 years. Our companies urge Congress to support U.S. manufacturing and reauthorize the Ex-Im Bank now.
• Daryl Bouwkamp is Senior Director of International Business Development and Government Affairs for Vermeer. Bruce King is Senior Vice President of Operations for Rockwell Collins.
Mark Hanawalt is President of United Equipment Accessories. Comments: firstname.lastname@example.org; email@example.com or Mark@uea-inc.com