Boeing CEO says sales at risk due to U.S. EXIM paralysis

Thu Apr 7, 2016 5:52pm EDT
 
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By Alwyn Scott and David Lawder

NEW YORK/WASHINGTON (Reuters) - A delay in appointing U.S. Export-Import Bank board members threatens to cost Boeing Co (BA.N: Quote) sales, the company's chief executive said on Thursday, flagging an issue that also affects General Electric (GE.N: Quote) and other U.S. companies that depend on the agency's export financing.

Boeing is on the verge of losing orders because only two of five seats on the agency's board are filled, not enough to approve deals over $10 million, Boeing Chief Executive Dennis Muilenburg said at EXIM's annual conference in Washington.

The appointment of a third board member would allow the agency to help finance billions of dollars in sales of U.S. aircraft, rail, power and communications equipment around the world, EXIM Chairman Fred Hochberg said.

"We've got about $10 billion (worth of loans and guarantees) in our pipeline right now," that are being held up because of the short-handed board, Hochberg said in an interview.

"If exports slow in the areas that require our financing, it will also hit the supply chain" of 14,000 U.S. companies that supply Boeing, and jobs, he added.

Confirmation of a third member has been halted by Senate Banking Committee Chairman Richard Shelby's moratorium on some of the 16 Obama administration financial nominees who have been awaiting panel confirmation, effectively blocking sales for Boeing, GE, Caterpillar Inc (CAT.N: Quote) and other companies.

Muilenburg said Ethiopian Airlines [ETHA.UL] was among the customers concerned that a lack of EXIM financing could prevent it from buying more Boeing planes.

Banks have been cautious about offering loans of 10 years or more to smaller carriers or ones with higher credit risk without a government guarantee, and some experts have voiced concern that if Boeing self-financed such deals, it would drain resources from product development.   Continued...

 
Boeing CEO Dennis Muilenburg in Washington September 11, 2014. REUTERS/Larry Downing