LOS ANGELES — Boeing Co.’s planned layoffs in Southern California, announced this week, have revived concerns that the aerospace industry may suffer if Congress doesn’t renew its support for the U.S. Export-Import Bank.
The bank’s charter from Congress expired at the end of July after House Republican leaders prevented a vote to extend it. The federal agency helps U.S. companies sell their goods overseas by providing loans and other assistance.
Conservative critics contended that the Export-Import Bank provided corporate welfare to large corporations like Boeing, the biggest beneficiary of the bank’s loans and other aid, as well as the nation’s largest single exporter.
The expiration of the Export-Import Bank charter was one of the key reasons given by Boeing earlier this week to explain the layoffs, expected to number in the hundreds. Aerospace and satellite industry players were quick to lament what they said could be a ripple effect.
Some Boeing subcontractors said reauthorizing funds for the bank is crucial to keeping U.S. businesses competitive in the global marketplace, where international rivals sometimes rely on similar support from their own governments.
The Export-Import Bank still has supporters in Congress, who want to reinstate its charter. But the bank will be unable to grant financing at least through the end of the summer while the House is on a lengthy recess.
“The reinstatement of the Ex-Im bank is absolutely crucial to the health of the aerospace industry, especially in California,” said Howard Kimberley, chief executive at British firm Shimtech Industries, which owns Lamsco West Inc., a California supplier of shims for Boeing. “Boeing is an absolutely crucial part of our business.”
Kimberley said the satellite division layoffs would not affect his firm’s work with Boeing, which is on the commercial aircraft side, but he said the two companies are closely tied.
“If Boeing’s business starts to suffer because they’re selling fewer airplanes, inevitably, we will suffer with them,” he said.
Frank Slazer, vice president of space systems for the Aerospace Industries Association, said the expiration of the Export-Import Bank’s charter comes at a time when the U.S. military has cut back on buying spacecraft.
“It’s increasingly important for these companies to successfully export,” Slazer said. “Export controls were important in that respect, but financing is another key issue. It’s a little too soon to see extensive impacts yet, but it will grow over time.”
Boeing said earlier this week that a Bermuda-based customer canceled an order for an expensive satellite when it could not get funding through the Export-Import Bank.
The bank provided $20.5 billion in loans and other assistance last year to finance $27.5 billion worth of U.S. exports. Taxpayers provide no money to the bank, which is funded by interest and fees, although the government is on the hook for any losses. The bank sent $675 million in profit to the U.S. Treasury last year.
