NEW YORK (Reuters) - Boeing Co BA.N chairman Jim McNerney said on Thursday he believes the U.S. Export-Import Bank, which recently lost authorization to engage in new business, will be reauthorized.
Boeing, the biggest U.S. exporter, is one of the most strident campaigners for reauthorization of the bank, which lent money to foreign buyers of U.S. goods. The bank’s charter lapsed on June 30 after conservatives in the U.S. Congress cast it as a promoter of “crony capitalism.”
More Boeing work would move offshore if Congress fails to reauthorize the lender, McNerney said at a lunch hosted by the Wings Club in New York City.
“I think it’s inevitable,” he said. “As someone who has always made the decision to build domestically, you’d have to evaluate some parts of your supply chain or yourself being able to access some financial support that is not available here in this country.”
He added: “I don’t have a plan for this because I think it’s going to be reauthorized. But it’s those kinds of pressures, no question about it.”
Boeing announced on Wednesday plans to build a “finishing center” in China to paint, install interiors in and deliver 737s built in the Seattle area, a move analysts see as helping to protect Boeing’s 50-50 market share with rival Airbus Group AIR.PA in the Chinese jetliner market, estimated to be worth $1 trillion over the next decade. Airbus opened a jetliner assembly line in China in 2008.
Boeing shares were down 1.28 percent at $129.99 in afternoon trading in New York.
McNerney, who stepped down as chief executive on July 1, also made his first public remarks on Boeing’s new Chinese facility. He said it was aimed at improving customer service rather than creating jobs in China.
“The finishing center is more of a customer move,” he said, referring to airlines. “The finishing center is designed not to produce a number of jobs. We will continue to buy more from China as their capability continues to grow.”
But McNerney warned that loss of EXIM financing would put Boeing at “a significant disadvantage” in about 10 percent of its sales competitions worldwide “because we would not meet the terms of the RFP (request for proposal)” that competitors would.
He said General Electric Co GE.N and Caterpillar Inc CAT.N face similar challenges from loss of EXIM support.
While private financing could partially step in, “we’d still be left disadvantaged,” he said.
Reporting by Alwyn Scott; Editing by Chris Reese and Andrew Hay