Ex-Im’s Hochberg Pledges $1 Billion Support for Executive Jets
Export-Import Bank Chairman Fred Hochberg plans to provide more financial aid to U.S. corporate jet manufacturers, branching out from a traditional support for Boeing Co. (BA) to help an industry where demand has suffered.
Ex-Im Bank support is needed to confront “intense competition” from manufacturers such as Brazil’s Embraer SA (EMBR3) and Canada’s Bombardier Inc. (BBD/B), who get subsidies from their home export credit agencies, Hochberg said in an interview yesterday at the Ebace corporate-jet conference in Geneva.
“We have been very geared toward large commercial aircraft, we also want to provide the same level of service to general and business aviation,” Hochberg said.
Ex-Im supported $90 million of corporate jet deliveries last year to customers of Textron Inc. (TXT)’s Cessna Aircraft Co, General Dynamics Corp. (GD)’s Gulfstream unit and Hawker Beechcraft Corp. Hochberg said he plans to boost the aid to $1 billion by 2014. The increased focus comes after order backlogs on corporate jets fell by more than half to $40 billion in three years.
Hawker Beechcraft, which is owned by Goldman Sachs Group Inc. (GS) and Onex Corp. (OCX), filed for bankruptcy on May 3 as crippling debts incurred from the company’s takeover combined with stalling sales for light corporate jets.
Hochberg’s comments come as the U.S. Senate votes today on a bill to boost Ex-Im support 40 percent to $140 billion by 2014. Opposition from airlines, led by Delta Air Lines Inc. (DAL), as well as groups that favor smaller government, have threatened to derail Ex-Im bank’s bid to increase its loan limit. The airlines argue that the bank unfairly helps foreign competitors buy aircraft for lucrative overseas routes.
Ex-Im Bank in 2011 provided a record $33 billion in export finance, Hochberg has said. Since 2007, almost half of the bank’s loan guarantees helped Boeing, California House Republican Tom McClintock said on May 10.
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