Obama Says Export Aid Will Help U.S. Companies Compete
Stock Chart for Boeing Co/The (BA)
Expanding on proposals he outlined in his State of the Union address last month, Obama announced plans for Export- Import Bank financing for U.S. companies for domestic as well as overseas sales to match foreign competitors’ sources of official funding.
The bank will give “American companies a fair shot by matching the unfair export financing that their competitors receive from other countries,” Obama said today at Boeing’s jet factory in Everett, Washington, which has more than 35,000 employees.
Obama toured the Boeing plant, providing him with an industrial backdrop for his manufacturing initiatives. Boeing has 85 percent of its $296 billion jetliner backlog from buyers outside the U.S., making the Chicago-based company pivotal to Obama’s plan to double exports by the end of 2014. The aircraft maker plans to increase commercial-jet production by more than 60 percent between 2010 and 2014.
The facility just north of Seattle is where Boeing builds wide-body jets. Erected in 1967, it remains the world’s biggest building by volume and houses the production lines for the 747 jumbo jet, 767, 777 and the new 787 Dreamliner, which was Obama’s backdrop. Air Force One, the presidential 747, was assembled there.
Boeing a Symbol
The U.S. lost 1.9 million manufacturing jobs since December 2007, the start of an 18-month recession that was the worst since the Great Depression.
“We can’t bring every job back,” Obama said. “But right now, it’s getting more expensive to do business in places like China. Meanwhile American workers have never been more productive, and companies like Boeing are finding out that even when we can’t make things faster or cheaper than China we can make them better.”
Obama also named two new members to the President’s Export Council today. Gary Loveman, chief executive officer of casino operator Caesars Entertainment Corp., and Denise Morrison, CEO of Campbell Soup Co., are joining the advisory committee.
Obama spoke at the end of the 787 assembly line. He was given a tour of the factory and then appeared to a crowd of hundreds of Boeing workers, stepping down to a stage on the factory floor from a red-carpeted staircase leading from a 787 Dreamliner in the livery of United Continental Holdings Inc., which will be the first U.S. carrier to fly the plane.
David Eddines, 57, of Everett, a quality technician on the 787 Dreamliner assembly line, met the president during his tour of the factory today with Boeing Chief Executive Officer Jim McNerney and commercial-jet President Jim Albaugh.
“I found it reassuring that he said America is going to rebound,” Eddines said in an interview after Obama’s speech. “There’s a lot of fixing that needs to take place. There’s a lot of loopholes for companies taking work abroad.”
In his State of the Union speech, Obama called for a program to provide credit to companies competing against foreign counterparts that benefit from preferential credit from their governments.
The administration will use existing authority “so that the Export-Import Bank can provide U.S. firms competing for domestic or third-country sales with matching financing support to counter foreign non-competitive official financing that fails to observe international disciplines,” the White House said in a statement released in conjunction with Obama’s Boeing visit.
The duopoly in jetliner production shared by Boeing and its larger European rival, Airbus SAS (EAD), is being challenged by new competitors. Canada’s Bombardier Inc. and China’s Comac are developing new single-aisle planes set to enter service this decade that will compete with the 737 and the A320, the workhorses of the airline industry.
John Kvasnosky, spokesman for Boeing Capital Corp., said Obama’s move to increase Ex-Im support was a new initiative.
“We’re always encouraged about efforts to support U.S. competitiveness, but we need to understand more about how it would apply in our circumstances,” he said in an interview before the president spoke.
Chris Chocola, head of the anti-tax advocacy group Club for Growth, said the aid would just create a “corporate welfare slush fund” for companies with lobbyists, such as Boeing.
“Congress should end the federal bank of Boeing, and instead promote more international trade through corporate tax reform and lower tariffs,” Chocola said in a statement.
Obama also called for extending the lending authority of the Ex-Im Bank, which may reach its $100 billion ceiling before April. The bank, which is self-sustaining, provides financing to U.S. exporters through loans, loan guarantees and payment insurance. About 3,600 companies benefited last year from its credit. Over the last three years the bank supported the export of about 460 Boeing jets.
Boeing and the White House have numerous ties: McNerney is chairman of the President’s Export Council; William Daley left Boeing’s board to become Obama’s chief of staff; John Bryson, also a Boeing director, became Obama’s Commerce secretary in October.
Boeing was targeted in a 2011 National Labor Relations Board complaint that Republicans said showed the administration’s hostility toward business. The case was dropped after a new union accord helped pave the way for a planned output boost at the biggest U.S. exporter.
“It is a love-hate relationship,” with the company and the White House wanting and needing rapport yet clashing over regulations, said Gary Chaison, a labor professor at Clark University in Worcester, Massachusetts. “Boeing becomes incredibly symbolic now after the troubles they’ve been through with the NLRB.”
Obama is on the last day of a three-day trip in which he also is raising money for his re-election campaign in California and Washington state.
He raised more than $6 million from California donors, including money taken in at a fundraising dinner on Feb. 15 co- hosted by actor Will Ferrell and attended by George Clooney.
Obama left the Boeing facility for a lunch with 65 people at the home of Costco Wholesale Corp. (COST) co-founder Jeff Brotman and his wife, Susan, in Medina, Washington. Among those who attended were Microsoft Corp. (MSFT) co-founder Bill Gates.
Obama also is raising money at a reception later in Bellevue, Washington. Ticket prices for the lunch cost $17,900 and ticket prices for the reception started at $1,000. The campaign expects the two events to bring in at least $1.6 million.
Last month, Obama raised $12 million for his re-election campaign, according to disclosures filed today with the Federal Election Commission. Counting money raised for the party at events featuring the president, Obama took in $29.1 million last month. Obama’s major fundraising events solicit donations for both his re-election campaign and the Democratic National Committee.
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