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S. HRG. 112–585 

EXPORT-IMPORT BANK REAUTHORIZATION: 

SAVING AMERICAN JOBS AND SUPPORTING 

AMERICAN EXPORTERS 

HEARING 

BEFORE THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

ON 

CONTINUING OVERSIGHT OF THE RECENT ACTIVITIES OF THE EXPORTIMPORT BANK AND THE CRITICAL NEED TO REAUTHORIZE THE 

BANK’S CHARTER 

APRIL 17, 2012 

Printed for the use of the Committee on Banking, Housing, and Urban Affairs 

( 

Available at: http://www.fdsys.gov/ 
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

TIM JOHNSON, South Dakota, Chairman 

JACK REED, Rhode Island 

CHARLES E. SCHUMER, New York 

ROBERT MENENDEZ, New Jersey 

DANIEL K. AKAKA, Hawaii 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

HERB KOHL, Wisconsin 

MARK R. WARNER, Virginia 

JEFF MERKLEY, Oregon 

MICHAEL F. BENNET, Colorado 

KAY HAGAN, North Carolina 

RICHARD C. SHELBY, Alabama 

MIKE CRAPO, Idaho 

BOB CORKER, Tennessee 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

MIKE JOHANNS, Nebraska 

PATRICK J. TOOMEY, Pennsylvania 

MARK KIRK, Illinois 

JERRY MORAN, Kansas 

ROGER F. WICKER, Mississippi 

DWIGHT FETTIG, Staff Director 

WILLIAM D. DUHNKE, Republican Staff Director 

CHARLES YI, Chief Counsel 

LAURA SWANSON, Policy Director 

PATRICK GRANT, Counsel 

ANDREW OLMEM, Republican Chief Counsel 

JOHN O’HARA, Republican Senior Counsel 

DAWN RATLIFF, Chief Clerk 

ANU KASARABADA, Deputy Clerk 

RIKER VERMILYE, Hearing Clerk 

SHELVIN SIMMONS, IT Director 

JIM CROWELL, Editor 

(II)
C O N T E N T S 

TUESDAY, APRIL 17, 2012 

Page 

Opening statement of Chairman Johnson ............................................................. 1 

Opening statements, comments, or prepared statements of: 

Senator Shelby .................................................................................................. 2 

Senator Schumer .............................................................................................. 3 

Senator Vitter ................................................................................................... 4 

Senator Tester 

Prepared statement ................................................................................... 23 

Senator Bennet 

Prepared statement ................................................................................... 23 

Senator Hagan 

Prepared statement ................................................................................... 23 

WITNESSES 

Robert Patton, President and CEO, Patton Electronics Co., on behalf of the 

U.S. Chamber of Commerce ................................................................................ 5 

Prepared statement .......................................................................................... 24 

Sonya Kostadinova, President and CEO, Transcon Trading Co., Inc., on behalf 

of the Small Business Exporters Association .................................................... 7 

Prepared statement .......................................................................................... 27 

David Ickert, Vice President of Finance, Air Tractor, Inc., on behalf of the 

National Association of Manufacturers .............................................................. 9 

Prepared statement .......................................................................................... 31 

R. Thomas Buffenbarger, International President, International Association 

of Machinists and Aerospace Workers ............................................................... 10 

Prepared statement .......................................................................................... 33 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Prepared statement of the Coalition for Employment through Exports ............. 36 

Prepared statement of Ben Hirst, Senior Vice President and General Counsel, 

on behalf of Delta Air Lines ................................................................................ 38 

Prepared statement of the American Apparel & Footwear Association, National Cotton Council, and National Council of Textile Organizations ........... 44 

Prepared statement of Garrett E. Pierce, Vice Chairman, Chief Financial 

Officer, Orbital Sciences Corporation ................................................................. 47 

GE Project Demand 2011 charts ............................................................................ 49 

(III)

(1) 

EXPORT-IMPORT BANK REAUTHORIZATION: 

SAVING AMERICAN JOBS AND SUPPORTING 

AMERICAN EXPORTERS 

TUESDAY, APRIL 17, 2012 

U.S. SENATE, 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, 

Washington, DC. 

The Committee met at 10:04 a.m. in room SD–538, Dirksen Senate Office Building, Hon. Tim Johnson, Chairman of the Committee, presiding. 

OPENING STATEMENT OF CHAIRMAN TIM JOHNSON 

Chairman JOHNSON. I call this hearing to order. We are here 

today to discuss the urgent need to reauthorize the Export-Import 

Bank. 

The Export-Import Bank is the official export credit agency of the 

United States, and it assists in financing the export of U.S. goods 

and services. Last year, the Bank supported almost $33 billion in 

export financing and helped support 290,000 American jobs. It is 

important to note that the Bank does this at no cost to the taxpayers, charging interest and fees to cover all of its expenses. The 

Bank actually reduces the Federal deficit and has returned almost 

$2 billion to the Treasury since 2008. 

As my colleagues know, last September this Committee unanimously approved a bill to reauthorize the Bank. If enacted, this bill 

would extend the Bank’s authorization to 2015, increase its lending 

authority to $140 billion, and implement a variety of reforms to improve transparency and further protect taxpayers’ money. Unfortunately, our repeated efforts to pass this legislation in the Senate 

have been blocked. 

The Bank’s goal is to use exports to help create and maintain 

jobs here at home. This mission, embodied in the Bank’s charter, 

is at the very core of what Congress intended the Bank to do. 

However, the Bank’s current authorization expires in 44 days, on 

May 31st. If the Bank’s charter is not extended and its lending cap 

not increased, thousands of American jobs will be at risk. 

Our witnesses today represent a broad cross-section of businesses 

and labor. Their testimony will help us better understand the consequences of a lapse in the Bank’s authorization, both for American 

employers and for the workers and families who would lose their 

jobs. 

The diversity of this panel speaks to the broad public support for 

the Bank and its mission and is a testament to the vital role the 
2 

Bank plays in helping businesses large and small. I believe that 

while the Bank is doing a good job, it can—and must—do more. I 

believe our legislation will help the Bank reach that goal. 

Mr. Patton, Ms. Kostadinova, and Mr. Ickert are small business 

customers of the Bank, and I am interested in hearing their perspective on how the Bank’s financing has helped their businesses 

create jobs and compete in the international marketplace. I also 

hope to hear from President Buffenbarger about the impact a failure to reauthorize the Bank would have on American workers. 

There is simply no good reason to oppose the reauthorization of 

the Export-Import Bank. To do so would jeopardize thousands of 

American businesses, cost hundreds of thousands of jobs, increase 

the Federal budget deficit, and put our Nation’s exporters on an 

uneven playing field with their competitors around the world. I am 

hopeful that today’s hearing will help convince all of us in Congress 

about the importance of reauthorizing the Bank. 

I will now turn to Senator Shelby for any opening remarks he 

may have. Senator Shelby. 

STATEMENT OF SENATOR RICHARD C. SHELBY 

Senator SHELBY. Thank you. Thank you, Mr. Chairman. 

Last year, as the Chairman has noted, Chairman Johnson and 

I worked together to craft bipartisan legislation to reauthorize the 

Export-Import Bank for another 4 years. That legislation, Senate 

bill 1547, not only reauthorizes Ex-Im Bank but also recognizes the 

importance of ensuring that the Bank’s activities do not put taxpayers at risk or supplant private financial markets. 

As our economy continues to struggle, it is important that Ex-Im 

have the financial resources it needs to ensure that American exporters can compete in overseas markets. Accordingly, our legislation increases Ex-Im’s authorization level. The bill does not, however, give Ex-Im a blank check, and it should not; rather, it authorizes the Bank at a level of $20 billion less than Ex-Im requested. 

This is a fair outcome, I believe, that gives the Export-Import 

Bank, according to our analysis, the resources that it needs to fulfill its mission, but no more. 

Our bill also contains several important reforms that will make 

the Bank more accountable. Most importantly, the Ex-Im Bank will 

have to publicly disclose more details on transactions valued at 

more than $100 million before its board can approve them. Ex-Im 

will also have to publish a strategic plan that details its objectives 

and provides metrics by which its operations can be evaluated. 

In addition, I believe that we need to do more to monitor the risk 

Ex-Im assumes because taxpayers are ultimately responsible for 

covering the Bank’s losses. In particular, I believe that we need to 

determine if the Ex-Im Bank is properly accounting for market 

risk. That is why I insisted that our bill contain a GAO study to 

review Ex-Im Bank’s risk management practices to determine if 

they pose any risk to the American taxpayers. I believe this study 

could also provide the basis for enacting further reforms of Ex-Im 

Bank’s operations and accounting. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you, Senator Shelby. 
3 

Are there any other Members who wish to make a brief opening 

statement? Senator Schumer. 

STATEMENT OF SENATOR CHARLES E. SCHUMER 

Senator SCHUMER. Thank you, Mr. Chairman. 

It has been striking to watch an utter no-brainer of an issue like 

reauthorization of the Export-Import Bank suddenly become a matter of great controversy. This has always been a bipartisan issue 

that has been supported by both parties. What began as an ideological thought bubble from far-right Washington think tanks has suddenly become a cause celebre with the Tea Party. Meanwhile, millions of jobs are hanging in the balance. 

But I am feeling more and more confident that this mindlessly 

ideological effort to block the Ex-Im Bank has run its course and 

is about to run out of gas. I think we can have a deal sooner rather 

than late. 

For one thing, mainstream Republicans do not want this fight. 

In fact, many are embarrassed by it. The Tea Party’s kamikaze attacks on the Ex-Im Bank has driven an unwanted wedge between 

the Republican Party and the business community. As you know, 

we in the Senate tried last month to pass the Ex-Im reauthorization by attaching it to a must-pass vehicle. Senator Cantwell offered the Ex-Im measure as a bipartisan amendment to the House 

IPO bill. The Ranking Member was a cosponsor, as was Senator 

Graham, both my good friends—one from this Committee and one 

used to be on this Committee—and we were confident we had 60 

votes for the amendment. But then at the last minute, our Republican friends pulled their support from it, and the amendment went 

down. I believe they were trying to give cover to the House leadership, which was in a turmoil about this issue. It was not a proud 

moment. 

Almost as soon as the vote was over, many Senate Republicans 

were already wishing that the issue would come back again. Twenty-six Republicans signed a letter to Leader Reid pledging support 

for Ex-Im if he would give them another chance to vote for it. Well, 

we can have another vote in the Senate quite easily, and I believe 

Senator Reid is very willing to do that. But the concern, of course, 

has been the House. The Tea Party wants us to bite our nose off 

to spite our face. Leader Cantor has been trying to ride this bucking bronco, but he seems to be sensing he is about to fall off. In 

recent days, Leader Cantor has appeared more eager to negotiate 

a solution with Democrats as a way out. 

Also, my office has been in touch with Delta Airlines—they employ a lot of people in New York—which has raised concerns about 

the Bank’s renewal previously. At this point, my impression is they 

are scaling back their demands so that a resolution may not be far 

off. 

Our bottom line is to extend the Bank’s charter and grow its 

lending cap like we do in the Senate bill. If there are other reasonable suggestions for modest reforms, such as those that have already been put in the bill by Senator Shelby, we can take a look 

at them. 

So I think we are closer to a resolution than the rhetoric from 

the other side might—and the other House might lead you to be-
4 

lieve. The other side knows it has taken this fight too far, and in 

the face of all this pressure from the business community, they 

cannot sustain this effort to block the Bank much longer. 

We are almost a month away from the Bank’s charter running 

out. The Tea Party in the House has stomped its feet. Now it is 

time for the adults over there to negotiate a solution that puts this 

issue behind us. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you. 

Anyone else? Thank you all—— 

Senator VITTER. Mr. Chairman? 

Chairman JOHNSON. Yes? 

Senator VITTER. Yes, I would like to make an opening statement. 

Chairman JOHNSON. Yes. 

STATEMENT OF SENATOR DAVID VITTER 

Senator VITTER. Thank you, Mr. Chairman. 

I agree that reauthorization of Ex-Im should be a relatively 

straightforward matter, and I think it can be if the key concerns 

that many folks have brought to bear in the debate are addressed 

directly. I want to focus on one which is, I think, the biggest concern, which is that some Ex-Im Bank loans in the past have had 

a clear negative impact on certain U.S. businesses. Senator Schumer mentioned Delta Airlines. Several of these examples are airlines deals. 

This goes to a broader management issue of Ex-Im Bank regarding the extent to which it properly looks at adverse impacts of 

loans it is considering. There is an actual requirement in the law 

that it do that in a full way 12 U.S.C. Section 635a–2 requires the 

Bank to: 

insure that full consideration is given to the extent to which any loan or 

financial guarantee is likely to have an adverse effect on industries, including agriculture, and employment in the United States . . . or by increasing 

imports to the United States. 

There has been a GAO study about the extent to which this absolute legal mandate is followed, and the results, quite frankly, were 

abysmal. Ninety-two percent of all Ex-Im transactions did not receive any adverse impact analysis—none whatsoever. Out of the remaining 8 percent, all but 0.2 percent received only modest review, 

not the full congressional reserve mandated under statute, and 

that was not me saying that or not a Tea Party member saying 

that. That was the GAO saying that. 

Again, this has resulted in specific deals, including many airline 

deals, that have hurt U.S. businesses. So I think this is the central 

issue—not the only issue out there, but I think this is clearly the 

central issue that needs to be addressed in a very full, direct way. 

I do not believe it is in a full, direct way in the current legislation, 

and I would urge all of us—all of us have an interest to put an end 

to those sorts of deals that have an adverse impact on U.S. businesses. I assume we do. I would urge all of us to simply focus on 

this very real issue and solve it and move forward. 

In that vein, I also think it would be very productive for this 

Committee to have the head of the Ex-Im Bank testify. The Chairman and President has not testified in about a year. His last testi-
5 

mony was May 17, 2011. A lot of these issues, a lot of these examples have come up since then, so I think if we are going to have 

discussions in a hearing like this, I think there is one gaping hole, 

which is to invite back the Chairman, the President of the Bank, 

to testify and directly address these issues, including why he is ignoring a clear statutory mandate in terms of proper analysis of adverse impacts. 

I think if we go at this in a straightforward way head on we can 

solve the issue. If we do not, there are going to be these continuing 

concerns that I have and many others have. So I would look forward to us adopting that path. 

Thank you very much, Mr. Chairman. 

Chairman JOHNSON. Thank you all. 

I want to remind my colleagues that the record will be open for 

the next 7 days for opening statements and any other materials 

you would like to submit. Now I will briefly introduce our witnesses. 

Mr. Bobby Patton is the President and CEO of Patton Electronics 

in Maryland and is also representing the U.S. Chamber of Commerce. 

Ms. Sonya Kostadinova is the President and CEO of Transcon 

Trading Co., Inc., in South Carolina and is representing the Small 

Business Exporters Association. 

Mr. David Ickert is the Vice President of Finance for Air Tractor, 

Inc., from Texas, and is representing the National Association of 

Manufacturers. 

Mr. R. Thomas Buffenbarger is the International President of the 

International Association of Machinists and Aerospace Workers. 

I thank all of you again for being here today. I would like to ask 

the witnesses to please keep your remarks to 5 minutes. Your full 

written statements will be included in the hearing record. 

Mr. Patton, please proceed. 

STATEMENT OF ROBERT PATTON, PRESIDENT AND CEO, PATTON ELECTRONICS CO., ON BEHALF OF THE U.S. CHAMBER 

OF COMMERCE 

Mr. PATTON. Chairman Johnson, Ranking Member Shelby, and 

distinguished Members of the Committee, thank you for the honor 

of allowing me to testify today. My name is Robert Patton. I am 

the president and CEO of Patton Electronics Company based in 

Gaithersburg, Maryland. I am also testifying today on behalf of the 

U.S. Chamber of Commerce. 

I am here to express strong support for the Ex-Im Bank. While 

still in college, my two brothers and I started Patton Electronics 

with the goal of financing the rest of our college education. We utilized our father as our venture capitalist. To help us get started, 

he gave $5,000 to each of us and later all of his retirement savings. 

And, finally, he contributed his basement, his wisdom, and some of 

his connections. Over time, we built our small direct-mail communications company, and over the years, we have developed a tremendous team and have continued to grow. The company now has 

sales in over 120 countries and generates about 70 percent of its 

revenue through exports. 
6 

Our best-selling products are Voice over IP products, mobile 

video surveillance products, and a wide range of network access devices. We have more than 100 employees today at our Maryland facility doing manufacturing. 

As the president of a small company, I can tell firsthand about 

the important role Ex-Im plays. The revenue our firm generates is 

our working capital. The money my customers owe me serves as 

collateral for the loans I have taken out to pay my employees and 

to cover all my other costs. 

As our business grew through the 1990s, the Internet gave us exposure to overseas customers, and we began to sell to them little 

by little. Exports began to comprise a measurable portion of my 

revenue, and my bank began to take notice. They did not want to 

lend against those international receivables. We could not afford to 

take orders from international customers in significant volumes, 

and in most cases we would require the buyer to pay in advance. 

This put us at a severe disadvantage over competitors who had the 

backing of their national export credit agencies. 

Enter the Ex-Im Bank. By providing loan guarantees and insurance on receivables, Ex-Im transformed our prospects. The loan 

guarantees allowed my international receipts to be used a collateral the same way my domestic receipts are used. 

In 2000, we started using Ex-Im’s working capital line of credit. 

In the year after we added the Ex-Im line of credit, we grew by 

about 40 percent and were able to hire more than 40 new employees due to the boost in exports that happened through the use of 

the Ex-Im Bank. A few years later, using the Ex-Im buyer financing products, we were able to close a single order in excess of $3 

million, adding more than 10 percent to our revenue. 

By having our revenue spread across different markets, we have 

distributed our risks so that our business is less like to be harmed 

by the economic ups and downs of one market or even a few local 

customers. Others have had the same success thanks to Ex-Im. The 

vast majority of trade finance is provided by commercial banks, but 

Ex-Im still has a vital role to play where commercial bank financing is unavailable or faces competition from foreign export credit 

agencies. 

Last year, Ex-Im supported export sales that in turn sustained 

nearly 300,000 U.S. jobs at 3,600 companies. However, Ex-Im’s 

temporary reauthorization will expire on May 31st. Failure to reauthorize its operations and raise its lending cap would seriously disadvantage U.S. companies like mine, potentially resulting in the 

loss of thousands of U.S. jobs. 

Ex-Im is especially important to small and medium-sized businesses such as mine which account for more than 87 percent of ExIm’s transactions. In fiscal year 2011, Ex-Im provided more than 

$6 billion in support for U.S. small businesses, an increase of nearly 90 percent since 2008. 

Tens of thousands of smaller companies that supply goods and 

services to large exporters also benefit from Ex-Im’s activities. The 

failure to reauthorize Ex-Im would amount to unilateral disarmament in the fact of other nations’ aggressive trade finance programs, and the results could be catastrophic for our business. 
7 

I do not know how our bank would react. Certainly I would expect them to reduce our borrowing and demand payment of the difference. That payback would come at the expense of employment. 

If they discount our international receivables as collateral altogether, I would be forced to terminate as many as 70 people. With 

that kind of cut, I would not be able to sustain our engineering and 

manufacturing operations. If Congress refuses to reauthorize Ex-Im 

Bank, the message to me would be that I should outsource our engineering, outsource our manufacturing, and bring products in from 

overseas rather than selling our loan. 

As president of a company, I truly understand the importance of 

international trade and the impact it can have on small business. 

I respectfully urge Congress to move swiftly to reauthorize ExportImport Bank. 

Thank you for the opportunity to testify. 

Chairman JOHNSON. Thank you. 

Ms. Kostadinova, you may proceed. 

STATEMENT OF SONYA KOSTADINOVA, PRESIDENT AND CEO, 

TRANSCON TRADING CO., INC., ON BEHALF OF THE SMALL 

BUSINESS EXPORTERS ASSOCIATION 

Ms. KOSTADINOVA. Chairman Johnson, Ranking Member Shelby, 

and Members of the Committee, thank you for the opportunity to 

testify on the reauthorization of the Export-Import Bank of the 

United States. My name is Sonya Kostadinova, and I am the 

owner, president, and CEO of Transcon Trading Company, located 

in Columbia, South Carolina. It is my pleasure to testify before you 

here today about why continuation of Ex-Im’s services for us is extremely important, critical for small businesses like mine. I am also 

here in my capacity as a board member of the Small Business Exporters Association, which we all know is the Nation’s oldest and 

largest small- and medium-size exporter association and which is 

a council of the National Small Business Association. 

Small Business Administration data shows that approximately 

70 percent of all U.S. exporters have 20 or fewer employees. 

Transcon Trading is one of these companies. Our mission in life is 

to help other small- and medium-size U.S. manufacturers to create 

brand awareness of their products overseas, establish exports, and 

increase existing exports, if any, by providing value-added services 

in all facets of exporting. 

Transcon is an export management company that essentially represents about 80 U.S. manufacturers overseas and tries to establish 

distribution networks for them over there. They come from several 

different industries. One of them is consumer personal care and 

health care products; another one is performance products for racing horses; another one is pet food and pet care products, and we 

have some specialty care products. 

We essentially perform the functions of an export department for 

those small U.S. manufacturers that cannot afford to have their 

own or do not have the expertise to establish or to build their own 

in-house export department or simply opt to tap into our already 

existing international distribution network. 

I would like to share with you our experience in how Ex-Im’s export credit insurance policy has actually helped us stay in the 
8 

international arena and expand exports for us and for our manufacturers by mitigating both our commercial and political risk, how 

the same insurance policy actually had made our foreign receivables eligible for financing, and how now that we have reached a 

further stage in our development as a company—and many of our 

manufacturers have as well due to the support of Ex-Im—we are 

ready and were getting ready to use some of the more advanced 

products and lending capabilities of Ex-Im but had to actually put 

on hold those projects because of the uncertainty that the lack of 

reauthorization created. 

Exporting is not easy. Many people have an incorrect assumption 

of exporting, associating it mainly with the logistics of an export 

transaction. We have to perform a whole host of other international 

business-generating activities for our manufacturers, such as identifying foreign buyers overseas, importers, distributors; marketing 

and advertising the U.S. products over there; doing registrations 

with foreign governments to meet certain requirements; product 

adaptation to meet foreign country requirements; the entire export 

package, documentation package, to aid in customs clearance overseas, and many more. 

We do take title of the goods, therefore the financial responsibility for those goods that we export for our manufacturers. In 

other words, we buy the goods from the manufacturer. We pay 

them, the U.S. manufacturer, we pay them as soon as the goods 

leave their warehouse, at the same time extending favorable credit 

terms to the international buyers—those that qualify, of course. 

Now, right here Ex-Im comes to play a very instrumental role for 

us by insuring our foreign receivables. We have a multi-buyer export credit insurance policy with Ex-Im, including this year discretionary credit limit and SBCL, which is a special buyer credit limit, 

and have used those services since 1993. Ex-Im has been a strong 

driving force behind our growth, and it helped us double our exports. And in our experience, any U.S. company that is able to offer 

competitive credit terms to international buyers can, indeed, increase their exports by 40 to 60 percent. 

Now, this is difficult for small businesses to get the same services from the private sector. They are either unavailable, or if they 

are available, they are at a cost which is not affordable for any 

small business like ours. 

In addition, we found out the hard way that many U.S. banks 

would not even provide working capital to us because they do not 

take as collateral foreign receivables, only domestic—like Bob correctly mentioned, only domestic receivables and inventory and 

equipment. But because we had our foreign receivables 95 percent 

covered by Ex-Im Bank, that allowed us to leverage them along 

with our inventory, which is also for foreign sales, and to get our 

credit line extended, which, of course, for many small businesses is 

like—it is a positive side effect, but it is like a lifeline support for 

the existence and expansion in international sales in particular. 

And as our prominence overseas has grown, again, with the help 

of Ex-Im, we now are in a position to tap into the other resources, 

other programs which we have not used before that Ex-Im has to 

offer. However, we had to put those projects on hold recently due 

to the uncertainty that this non-authorization created for us. 
9 

Therefore, we need Congress’ understanding, and truly acting 

swiftly would be in the best benefit for small businesses like mine 

in this country. We urge Congress to reauthorize Ex-Im Bank for 

4 years and at the $140 billion level cap, and any inaction or even 

a temporary action, I believe that would also have a paralyzing effect on our efforts to go through with some of these projects and 

international sales that we now have on the table for us. 

Thank you once again for allowing me to share our experiences 

and our fears with you. We put our faith in you, and we believe 

that you will indeed see Ex-Im as the agency that generates results 

and creates results for us small businesses rather than a taxpayer’s 

burden. And I do believe that by growing small businesses’ exports, 

we ultimately grow U.S. exports, the U.S. economy, and U.S. jobs. 

Thank you. 

Chairman JOHNSON. Thank you. 

Mr. Ickert, you may proceed. 

STATEMENT OF DAVID ICKERT, VICE PRESIDENT OF FINANCE, 

AIR TRACTOR, INC., ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS 

Mr. ICKERT. Chairman Johnson, Ranking Member Shelby, and 

Members of the Committee, thank you for the opportunity to appear before you today about this very important issue of reauthorizing the Export-Import Bank. My name is David Ickert. I am the 

vice president of finance at Air Tractor. We are located in Olney, 

Texas. 

Air Tractor is a small business, 270 employees, one location. We 

are 100 percent employee owned. We build agricultural airplanes— 

crop dusters, if you will—and forestry fire-bombing airplanes, and 

we sell them all over the world. 

As I noted, Air Tractor is located in Olney, Texas. I believe it is 

helpful to know a little bit about Olney, Texas, my hometown. We 

are 100 miles west of Fort Worth. The population is 3,000 people. 

We are small, we are rural. I describe it sometimes as the town has 

got three red lights and a Dairy Queen. 

But I think there is importance to that. The importance is that 

in Olney, Texas, exports are thriving, business is thriving, employment is happening. Now, this not only happens for small businesses, it happens for large businesses also. So Export-Import 

Bank is important to small businesses, large businesses, urban 

areas, and country towns. But my story is about Olney, Texas, and 

Air Tractor. 

We principally use the medium-term credit insurance program of 

Ex-Im. We submit individual packages to the Bank for their underwriting and their approval. Once they get those approvals, then we 

are able to ship the product, take a note for the sale, financing our 

end-user customer, and then sell the notes to our commercial bank. 

That gets us out of the transaction from a cash-flow standpoint. 

The important things here are that without Ex-Im Bank and a 

lot of these sales, our customers in those countries, in those foreign 

countries, do not have the banking system to support their purchase of that product. Also, without Ex-Im finance, our commercial 

bank would not buy the paper or finance the transaction. Bottom 

line, many of these transactions, these export transactions that we 
10 

are able to do and to create jobs with in Olney, Texas, would not 

happen without the Export-Import Bank. 

We first starting using the Bank and its products in 1995. At 

that time our exports were 10 percent of our sales. Over the years 

we have continued to use Ex-Im, and we have continued to grow 

our export sales, and we have continued to increase our employment. 

Over the last 5 years, our exports have increased from 36 percent 

in 2007 to over 50 percent for 2010 and 2011. During that same 

period, our employment has risen from 165 people to 267 people. 

That is significant to Olney, Texas. The increase in employment 

happens because of exports, and many of the exports would not 

happen without Ex-Im Bank. 

Just let me emphasize to you that without the Bank, without ExIm products, there is not a commercial bank in this country that 

is going to lend to our end-user customer in Brazil or Argentina, 

and there is not a bank in Argentina that is going to lend to our 

customers. So that shows you the nexus and what happens with 

the Bank as far as our situation being able to create sales. 

It is important to note that since 1995, Air Tractor has completed 

over 100 Ex-Im medium-term deals in excess of $60 million. Air 

Tractor has never made a claim on the Bank. The Bank has never 

lost one dime on Air Tractor. So our business is good for Ex-Im, it 

is good for Air Tractor, it is good for our employees, it is good for 

our customers, it is good for Olney, Texas, and it is good for the 

U.S. economy. But the good comes to an end if the Bank is not reauthorized at an adequate lending cap, and that is what we are 

looking at today. 

Let me briefly illustrate how that impacts Air Tractor as we now 

sit. We have 175 planes planned for production in 2012; 44 of those 

have been identified as needing Ex-Im support, 25 percent of our 

production. Without Ex-Im support, many, if not all, of those 44 

sales will not happen. If they do not happen, then that means 25 

percent of our employees have their jobs at risk. That is 68 jobs in 

Olney, Texas. That is significant to us, that is significant to our 

employees, that is significant to Olney. 

So, in conclusion, let me just say that the Bank has been very 

key and very important to us growing our exports, to increasing 

our employment, and we have not suffered one dime of expense to 

the Ex-Im Bank. So we wholeheartedly support the reauthorization 

of the Bank for a 4-year period at an adequate lending cap. 

Thank you. 

Chairman JOHNSON. Thank you. 

Mr. Buffenbarger, you may proceed. 

STATEMENT OF R. THOMAS BUFFENBARGER, INTERNATIONAL 

PRESIDENT, INTERNATIONAL ASSOCIATION OF MACHINISTS 

AND AEROSPACE WORKERS 

Mr. BUFFENBARGER. Thank you, Chairman Johnson, Ranking 

Member Shelby, and Members of this Committee, for the opportunity to testify before you today on the vital importance of the Export-Import Bank to our industrial base and the creation and preservation of American manufacturing jobs. My name is Tom 

Buffenbarger, and I serve as International President of the Inter-
11 

national Association of Machinists and Aerospace Workers, also 

known as the IAM. As a broadly diversified manufacturing union 

and the largest aerospace union in North America, representing 

over 700,000 active and retired members, the IAM is particularly 

concerned about the need to fully reauthorize the Ex-Im Bank. 

While much of the Ex-Im Bank’s focus relates to the sale of Boeing aircraft, we also represent workers at companies like Caterpillar, Pratt and Whitney, John Deere, and General Electric, as 

well as numerous small and medium-sized firms that export a variety of American-made products crucial to our economic health. 

Given our members’ work with these exporting firms, we are 

uniquely positioned to share with you our strong belief that the ExIm Bank’s reauthorization must be approved immediately. Indeed, 

the Ex-Im Bank is one of the few tools we have to support exports 

that in turn contribute directly to American jobs. At a time when 

our fragile economy is still recovering and millions of manufacturing workers are still without work, we are baffled why the ExIm Bank’s reauthorization and, consequently, its ability to fulfill its 

critical mission is being held up. This mission, however, cannot be 

fully accomplished if domestic content requirements are weakened 

as some have proposed. There is a clear link between American 

jobs and domestic content. We should look to strengthen, not weaken, these vital provisions; otherwise, the Ex-Im Bank will be engaging in corporate welfare that would incentivize the offshoring of 

American jobs. 

Global competition has never been more intense and the stakes 

for our economy have never been higher as U.S. firms and workers 

struggle to compete in today’s global marketplace. Successful countries recognize the importance of a strong manufacturing sector 

and the true nature of global competition. These countries know 

that there is no such thing as a free market and provide strong 

support for critical wealth- and job-creating industries like aerospace. 

The United States, unfortunately, has too often blindly embraced 

a free market ideology that has opened our domestic markets to 

foreign goods while offshoring the production of American-created 

technologies and products, as well as millions of good-paying jobs. 

We have repeatedly seen this with electronics, green technologies, 

and a host of consumer products. The result has been a gaping 

trade imbalance with the rest of the world. According to the U.S. 

Census Bureau, our trade imbalance grew by more that 10 percent 

in 2011 to over $558 billion. And while there was a small positive 

balance in services, the deficit in goods increased by 14 percent to 

over $737 billion with the largest increase coming in our deficit 

with the People’s Republic of China, a rapidly growing country that 

engages in a variety of unfair trade practices—illegal subsidies, 

forced technology transfer, currency manipulation, and an array of 

other ills. 

The Economic Policy Institute estimates that over the last decade 

our trade imbalance just with China has cost the United States 

nearly 3 million jobs, and many of these jobs have been in manufacturing, a sector in which each manufacturing job supports three 

to four additional jobs in the economy. With our economy struggling with persistent high unemployment and starving for more 
12 

rapid job creation, it is no surprise that so many working families 

have such a dim view of the future. 

Nor should it come as a surprise that countries across the globe 

have set their sights on one of the few remaining sectors where the 

United States enjoys a positive balance of trade with the rest of the 

world: aerospace. For 2011, the U.S. aerospace industry had a 

trade surplus of $7.25 billion, the largest of any advanced technology sector. According to a recent study by Deloitte on the economic effect of the U.S. aerospace and defense industries, aerospace products and parts manufacturing contribute over $40 billion 

to U.S. payrolls and impact every State. 

It should be noted that the U.S. military and commercial aerospace sectors are deeply interconnected, particularly in the supply 

chain, and many of our members will work on both military and 

commercial aerospace products. Weakening our commercial sector 

will have a direct impact on the capabilities of the U.S. aerospace 

defense industrial base. 

The Bank has never been directed to balance the interests of 

U.S. exporters against the interests of some airlines like Delta Air 

Lines, and if Delta were truly interested in supporting U.S. workers, it would argue that the Bank’s rules be changed so that it, too, 

could be permitted to assist U.S. airlines in the purchase of domestically produced aircraft. Sadly, while Delta recently took advantage of Ex-Im Bank financing to win a contract to perform heavy 

engine maintenance for a Brazilian airline, it seems that Delta is 

more interested in destroying one of the U.S. Government’s most 

effective tools for spurring growth and creating American jobs by 

seeking to insert language in the Ex-Im Bank reauthorization to 

specifically eliminate financing for wide-body aircraft. 

Mr. Chairman, I have more to my remarks that will be submitted, but I would like to go on record for the International Association of Machinists and Aerospace Workers strongly encouraging 

this Committee and the U.S. Senate to approve full reauthorization 

of the Ex-Im Bank and, in fact, expand its mandate. 

Chairman JOHNSON. Thank you. Thank you for your testimony. 

As we begin questions, I will ask the clerk to put 5 minutes on 

the clock for each Member. 

For all the witnesses, what are the downsides to continuing to 

authorize Ex-Im for only short periods of time, like 1 or 2 years? 

How do short-term reauthorizations impact the need for certainty 

in planning for future export opportunities? Mr. Patton, let us start 

with you. 

Mr. PATTON. Thank you very much. The impact on my company 

would be that we would be making plans on reducing. When we 

have only a 1-year window that we can see out, or 2 years, then 

we have to plan that the facility is going to go away. And if the 

facility is going to go away, then we are going to be looking to preserve as much of our business as we can and get out of certain 

markets, reduce employment over time so that it happens in a soft 

fashion. 

Chairman JOHNSON. Ms. Kostadinova. 

Ms. KOSTADINOVA. Thank you. Yes, I think that this would have 

a paralyzing effect, particularly on our new projects and our new 

ability to tap into Ex-Im’s lending capability. In other words, it will 
13 

absolutely prevent our growth. We may be able to maintain some 

of our short-term customers through the credit term facility, of 

course, but ultimately that will go away, too. So I would imagine 

that most of our manufacturers and other small businesses like 

mine would suffer greatly from such a short-term action. 

Chairman JOHNSON. Mr. Ickert. 

Mr. ICKERT. Mr. Chairman, I talked to you about what would 

happen to us currently in 2012 if the Bank is not reauthorized, but 

you bring a very interesting point to the table on the uncertainty 

of short-term reauthorization. We are currently taking orders for 

2013. We have a supply chain to plan. We have customers to talk 

to. We have personnel to put in place. And that uncertainty of a 

short-term reauthorization makes that very difficult for a small 

business; it makes it very difficult for any business. So that is why 

we strongly urge a 4-year renewal. 

Chairman JOHNSON. Mr. Buffenbarger. 

Mr. BUFFENBARGER. Thank you, Chairman. The products the 

members of my union manufacture, such as Boeing aircraft or John 

Deere and Caterpillar agricultural equipment, machine tools and 

general aviation products, all require long lead times, and it requires that the customer, the purchaser, have the assurance that 

after waiting that period of time they are going to have the financing available to close the deal. We need this Bank’s financing to assure there is long-term stability in our manufacturing industries. 

Chairman JOHNSON. Mr. Patton and Mr. Ickert, can you discuss 

how your company interacts with other manufacturers in the supply chain? And can you talk about how failure to reauthorize the 

Ex-Im Bank could affect these suppliers? 

Mr. PATTON. Certainly. Our product is Voice over IP. We are in 

the electronics business. We have literally thousands of components 

from hundreds of different suppliers that get built into our product. 

As the volume goes down, our purchases would go down, and that 

would have, obviously, a negative impact on their revenue and the 

jobs that would be available at their companies as well. 

Chairman JOHNSON. Mr. Ickert. 

Mr. ICKERT. Like Mr. Patton, we manufacture our aircraft, and 

so we have a lot of components that we are buying from vendors 

all over this country. Our supply chain is—as I said, we have to 

go out for some time. Many of our vendors are small businesses 

also, so we are significant to them, and any adverse impact we 

have in our business would directly impact adversely those businesses in our supply chain. 

I might add additionally, as I mentioned, we are a small town. 

We have small business retail businesses on Main Street. Those 

people would also be adversely impacted if we had an authorization 

or non-authorization that would adversely affect our business because it would affect them also. 

Chairman JOHNSON. Mr. Buffenbarger, can you discuss what effect you think a failure to reauthorize Ex-Im would have on highpaying American jobs in the United States? 

Mr. BUFFENBARGER. An absolutely devastating effect would occur 

on jobs with layoffs coming almost immediately, not too different 

than we see right now with the threat of sequestration of the defense budget. Where there is uncertainty in a marketplace, the nat-
14 

ural reaction is to hold tight and not make any big, long-term decisions. And when that occurs, the first casualty is the person who 

holds a job. And we would not be here today so adamant about this 

if we did not strongly believe that the long-term best interests of 

the United States and its workforce are impacted greatly by the reauthorization of the Ex-Im Bank; and if not, we are going to be 

dealing with a very, very serious issue of another recession, maybe 

greater than the one we are just starting to emerge from now. 

Chairman JOHNSON. Mr. Patton, can you explain how having ExIm’s support helps American businesses compete against foreign 

companies that have export credit agencies in their own countries? 

Mr. PATTON. Yes, absolutely. The business that we have around 

the world is highly competitive. Electronics information technology 

is one of the keystones of most economic business development 

groups, and so there is a big emphasis there. Whenever I go into 

the international marketplace, particularly in the emerging markets, and, in particular, markets where there is mineral-rich opportunities there and countries want to have friendly relations with 

foreign governments, then it is a no-holds-barred competition. And 

I have seen and heard of cases where certain foreign countries 

would come in and say whatever the Americans are offering, we 

will do it for 40 percent less, and we will give you a 5-year financing deal. And they come in right out of the gate with that kind of 

proposal. That leaves me lagging behind trying to respond with 

whatever credit facilities I can bring. 

Chairman JOHNSON. Senator Shelby. 

Senator SHELBY. Thank you. Mr. Chairman, I have a number of 

questions I would like to propound for the record, if I could. 

Chairman JOHNSON. Yes. 

Senator SHELBY. I think all of your testimony is very interesting 

today. As the Chairman pointed out, I am a cosponsor with him of 

this legislation. I think that there is no other game in town right 

now, that we need the Export-Import Bank, but we need it to be 

accountable to the taxpayers. We want to make sure of that. 

I want to ask all of you a question. For the services, you are 

charged a fee, are you not? Let us start with you, Mr. Patton. Let 

us say you sell a lot of stuff overseas; you create jobs here in Maryland, which is good; and you have accounts receivable. Does the Export-Import Bank—they do not give you anything. They charge you 

a fee for this service. Is that correct? 

Mr. PATTON. That is correct. There is a fee for the service. We 

pay interest and other fees for—— 

Senator SHELBY. And for that, then you can go to a bank, and, 

of course, a local bank can get your money and carry on your business, and stay afloat, right? 

Mr. PATTON. That is correct. And in addition to the fees, there 

is also accountability on my part. I have to undergo two audits 

every year in order to substantiate the loans that I have. 

Senator SHELBY. Ms. Kostadinova—is that right? 

Ms. KOSTADINOVA. Yes, Kostadinova. 

Senator SHELBY. Now, are you a broker or whatever it is of 

other—say if I were in business in Alabama and did not know anything about exports, but I had a product that somebody in, say, 

Germany wanted to buy, could you help me with that? 
15 

Ms. KOSTADINOVA. Yes, absolutely. 

Senator SHELBY. And what would you say to me? I know you 

charge a fee for it, but that is understandable. 

Ms. KOSTADINOVA. No, no. In fact, we do not charge a fee at all. 

Senator SHELBY. You do not charge a fee? 

Ms. KOSTADINOVA. We do not charge a fee. It is absolutely at no 

cost and no risk for the U.S. manufacturer. What we do is, like I 

said earlier, we essentially take title of the goods. In other words, 

we buy the products from the U.S. manufacturer. 

Senator SHELBY. And is that generally account receivable? 

Ms. KOSTADINOVA. No. The accounts receivable, the foreign accounts receivable becomes when we actually sell these same products to the foreign buyers. 

Senator SHELBY. Would you buy the airplanes from him to resell 

them? Is that what you are talking about? 

Ms. KOSTADINOVA. Right, but our products are consumer products and they are not airplanes. 

Senator SHELBY. I know that. We understand. 

Ms. KOSTADINOVA. So that is easier to do. So we essentially buy 

the products, pay the U.S. manufacturer right away so they do not 

have any risk whatsoever in—— 

Senator SHELBY. You buy from them, write them a check, and 

then it is your product, and you export it. 

Ms. KOSTADINOVA. Exactly. And then we sell it to the foreign 

buyers overseas, and then we extend credit terms to the foreign 

buyers overseas. And to support the earlier question that you had, 

for instance, we had a very big customer in Saudi Arabia whom we 

lost because we have a competitor over in the U.K., a competitor 

to our manufacturer’s products, and they offered like, you know, $1 

million short term, medium term, whatever the best is possible. 

Senator SHELBY. They offered better terms. 

Mr. KOSTADINOVA. Exactly. And they immediately, just like you 

said, went out the door with that, and we were left nowhere. ExIm Bank was very instrumental in that in helping us. 

Senator SHELBY. Do you keep up with the default rate on your 

accounts? 

Ms. KOSTADINOVA. Yes, we do. 

Senator SHELBY. And I know you are audited by the Export-Import Bank. 

Ms. KOSTADINOVA. Yes, we do. Yes, we do. In fact, I would say 

that on our $50 million worth of foreign receivables that we have 

had insured by Ex-Im Bank, we have had about $200,000 only in 

claims—no claims since 2006, actually, only one for $2,500 or less. 

So Ex-Im is making money off of us. On this $50 million, we paid 

$364,000 premium—— 

Senator SHELBY. They are making money off of you, but they are 

providing you an essential service. 

Ms. KOSTADINOVA. Absolutely. Exactly. 

Senator SHELBY. That is the point. 

Ms. KOSTADINOVA. Yes, that is it. Thank you. 

Senator SHELBY. Mr. Ickert, do you sell your products directly? 

Say I was in the Ukraine and I had need of your services and I 

wanted 10 crop dusters, or whatever you call them, air tractors, 

and I wanted to buy them, you wanted to sell them, I say I need 
16 

some financing, and you go to the Export-Import Bank to try to 

work that out. Is that how you do that? 

Mr. ICKERT. Yes, sir. We would go first to you as the customer. 

We would evaluate your creditworthiness, and to the extent we 

deemed it creditworthy, then we would submit that—— 

Senator SHELBY. The ability to pay back whatever you sell. 

Mr. ICKERT. Yes, sir. We would submit that file to Ex-Im Bank 

for their underwriting. They in turn, once they approved it, would 

give us their credit insurance, and we pay a fee for that. 

Senator SHELBY. You pay a fee to them. 

Mr. ICKERT. Yes, sir. In 2010, we paid over $300,000 in premium 

fees to the—— 

Senator SHELBY. And how much credit did you have for that? 

Mr. ICKERT. Probably around $15 to $20 million. 

Senator SHELBY. What is the default rate on your product selling 

overseas, dealing with the Export-Import Bank? What is your default rate? 

Mr. ICKERT. Senator, as I mentioned, we have had over 100 

deals, and Ex-Im Bank has never lost a dime on us. 

Senator SHELBY. That is good. My time is up. Thank you. 

Chairman JOHNSON. Senator Menendez. 

Senator MENENDEZ. Thank you, Mr. Chairman. Thank you all for 

your testimony. 

I want to just explore a little bit—I am a supporter of the Export-Import Bank, but I just want to press its importance and its 

relative size compared to other countries. What does the new funding cap for Ex-Im of $140 billion for Bank support to American exporters compare with export bank support by other countries to 

their exporters? Does anyone on the panel have any sense of that? 

Mr. ICKERT. Senator, I cannot give you the absolute dollars, but 

I have seen a recent chart that showed something like the support 

of 10 different ECAs throughout the world, and Ex-Im is by far the 

smallest in dollar commitment. What the Bank is able to do is help 

us as manufacturers and exporters is level that playing field 

enough to get our products in the door. 

Senator MENENDEZ. So let me—— 

Mr. PATTON. I have a chart right in front of me here. Japan and 

Germany are in the $150 billion range. China in 2009 was $200 billion. They are up to $300 billion. And from my experience, the 

amount of support that we get from the Ex-Im Bank is a fraction 

of what I see from my fiercest competitors in Asia. 

Senator MENENDEZ. Yes. And, in fact, it seems to me that the 

failure to reauthorize the Bank amounts to America’s unilateral 

disarmament in the face of other Nations’ aggressive trade finance 

programs. Canada, for example, supports an export credit agency 

that has extended nearly 3 times as much export financing as ExIm, even though its economy is one-tenth the size of the United 

States. And China has three export credit agencies that last year 

provided $300 billion in export finance to its exporters, 10 times 

more than Ex-Im provided. So it is tough to compete in a global 

market when other countries are rigorously supporting their domestic companies in this regard. So I think that is very important 

to keep in focus. 
17 

One criticism of the Bank has been its focus on large business 

rather than sharing or spreading its support on small- to mediumsize businesses that need more assistance to enter the export market. Although in FY 2011 Ex-Im provided about $6 billion in financing and insurance for U.S. small businesses out of a total of 

almost $33 billion in total authorization, I appreciate this is a substantial increase from what has happened in the past, but it still 

means that the bulk of assistance is going to large businesses. 

How important is it for Congress to pass this reauthorization to 

support more small businesses and mid-sized businesses? And 

what can Ex-Im do to increase its support for that universe? 

Mr. PATTON. I will just talk on the proportions. In my business, 

it is an 80/20 world. There is 20 percent of my customers that represent 80 percent of my revenue, and I imagine Ex-Im Bank has 

a similar ratio in their business transactions as well. Very large 

companies are going to have a demand for very large facilities 

when they are selling big-ticket items. In my business, I sell really 

small devices. The average transaction size is probably under 

$10,000. So I would expect that the number of transactions that 

Ex-Im supports for me probably exceeds the number of transactions 

that they support for Boeing or any other large equipment manufacturer, because I do thousands and thousands of transactions. 

Senator MENENDEZ. But we always hear, I hear many of my colleagues here in speech after speech talk about small businesses 

and mid-sized businesses being the backbone of America, the job 

creators, the ones that are going to help us lead the way into greater prosperity. So while I understand the transactional aspect of 

your answer, it seems to me that an effort by the Bank to get a 

universe of small and mid-sized businesses to be more robustly engaged will be necessary. Mr. President, do you want to—I like to 

use the term ‘‘Mr. President’’ whenever I can. 

[Laughter.] 

Mr. BUFFENBARGER. Thank you. The U.S. Chamber of Commerce 

is—and ironically, this is an issue that organized labor and the 

chamber find common ground on in supporting the reauthorization. 

But the records the chamber has shared with us show that small 

businesses make up 87 percent of the Ex-Im’s transactions. And I 

think that goes very far in helping people understand that it is the 

small supplier to maybe a large equipment manufacturer also benefits by having the guarantees this Bank is able to provide. 

Senator MENENDEZ. So the percent of transactions is high. The 

dollar figure is lesser. All right. Thank you. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Senator Moran. 

Senator MORAN. Mr. Chairman, thank you. I thank each of the 

witnesses for their testimony and for being here. 

In the absence of the Bank, is there any other option you have 

to go to for that guarantee that would enhance the chances of sales 

to foreign countries or consumers in foreign countries? Is there any 

private sector option or is the Export-Import Bank the only option? 

Ms. KOSTADINOVA. Thank you. I do not think that for us, particularly the smaller small businesses, that there is another option. 

Like I said, I was talking through experience earlier that we have 

learned the hard way that, number one, it is almost impossible for 
18 

us to get our foreign receivables insured by the private sector. If 

we get an offer, it would be extremely expensive. Like I mentioned 

before, those numbers on $50 million, $364,000 premium that we 

paid, that puts our average at a lot less than 1 percent. There is 

no private bank that has offered me at least anything like that. 

And they need a cap, that they want us to cap it up front. Well, 

we do not know what is going to happen tomorrow, so it is hard 

to say, OK, I am going to pay up front now a higher premium than 

this, and on a lot higher estimate that I may have at the end of 

the year, whereas Ex-Im allows us to pay those premiums as the 

transactions occur, actually within 30 days after the transaction occurred, which is a blessing for us as well in that aspect. 

Regarding the working capital, absolutely not possible. Just in 

the last couple of years, I have been to a number of banks, and unless I had the 95-percent foreign receivables covered by Ex-Im 

Bank, I would not have gotten the credit line. 

Senator MORAN. Is that true across the board? Is there just no 

other option? Obviously not a practical one for you, but is there 

anybody who does this business outside Export-Import Bank? 

Mr. ICKERT. Senator, we have used some private insurance over 

time. One of those particular firms that we used more than others 

went out of business several years ago. Another firm quit, exited 

medium-term business. 

For the most part, there is no option for us. There has been some 

out there, but, one, they do not really like small businesses. There 

are not many of them out there right now, if any. And, also, they 

are very restrictive in their markets, in which markets they will go 

in and will not go in. That has been the beauty of Ex-Im Bank is 

that they have been the constant that has helped us to reach out 

to markets on a broad spectrum. 

Senator MORAN. Yes, ma’am. 

Ms. KOSTADINOVA. I am sorry. I just wanted to add on to what 

David said. During the Great Recession, many of those in the private sector that actually had still provided some of that foreign receivables insurance—to some bigger companies, though—they 

stopped doing it, which created a mess, because once they stop covering the foreign receivables, then the other private bank that is 

actually giving them the credit operating capital to those companies that I know, they stop doing that as well, not having the 

backup of the receivables. So, yes, and Ex-Im did not change anything, did not change nothing during the recession, so it was great. 

Senator MORAN. There has been a lot conversation, especially 

here in Washington, D.C., about reforms or changes, if we are 

going to reauthorize the Bank that we need to ‘‘reform’’—it is actually a word I have tried to take out of my vocabulary because most 

things Washington, D.C., reforms seem to me to end up worse than 

they were before the reform. So alterations or changes, are there 

any that make sense to you or are there any that you have the opposite reaction to, that this makes no sense, do not do this? Any 

instructions to the Congress in the so-called conversation that we 

have about reforming the Bank? Mr. Patton. 

Mr. PATTON. Yes, I would say that you need to be careful about 

creating rules that are one-size-fits-all. You know, there is a certain amount of risk for a small transaction base which is different 
19 

than the risk on the large transaction. And so the relative safeguards need to be in place in scale, in proportion to the business. 

Senator MORAN. Good advice. Yes, sir. 

Mr. ICKERT. The current charter of the Bank has 20-percent required authorizations for small business. Back to Senator 

Menendez’s question earlier, I think that is very important that 

that remains to encourage small businesses to enter the export 

market and to grow these businesses’ employment and market. 

But, also, I would—nothing specific other than you have heard also 

some of the facts and figures about the large amount of export support that comes from other ECAs to their businesses, and if it is 

not absolutely viable, I would be loath to hang many restrictions 

on the Bank that would only encumber them more and, in fact, 

would encumber small businesses or businesses in general trying 

to use the Bank. 

Senator MORAN. Mr. Chairman, thank you. 

Chairman JOHNSON. Senator Bennet. 

Senator BENNET. Thank you, Mr. Chairman, and I would like to 

thank you and the Ranking Member for your bipartisan work on 

this, and I hope that we will get it reauthorized in short order. If 

there is any issue that more closely reflects the dysfunction of this 

town and the detachment of this town from what is actually going 

on in the country, I think this is it, our inability to get this done. 

I was just at home in Colorado over the last 2 weeks visiting 

with small businesses that have had the benefit of the work that 

the Export-Import Bank does. It is hard enough to start and succeed at small business. It is even harder to grow your business by 

exporting, and somehow Washington is figuring out how to make 

it even more difficult. 

And I wonder, Mr. Patton—you were first person to talk about 

unilateral disarmament here—are you under the impression that 

there is any other country who is home to competitors of yours that 

is unilaterally disarming at this moment? 

Mr. PATTON. Not at all. 

Senator BENNET. Do you think that our failure to reauthorize 

this Bank would lead any of the other countries where you compete 

to decide that that kind of disarmament is a good idea? 

Mr. PATTON. There is no way that I can see that happening. 

Senator BENNET. You described this as ‘‘no holds barred.’’ 

Mr. PATTON. That is right. 

Senator BENNET. Like ultimate fighting. 

Mr. PATTON. That is right. 

Senator BENNET. Can you give the Committee a sense of what 

that looks like on the ground for you? And anybody else who would 

like to get in on this, please do. 

Mr. PATTON. Well, on the ground the competition is fierce. I am 

in the electronics communications business. I do not know how 

many devices you have in your home that are electronic made in 

the USA. But, you know, the competition is—— 

Senator BENNET. I mostly am engaged in the process of getting 

my daughters to shut them off. 

[Laughter.] 

Mr. PATTON. I appreciate that, too. I have three daughters in college. So, yes, the competition is unbelievable. The margins get 
20 

shaved lower and lower and lower, particularly in price-sensitive 

markets in the developing world, and there is just an awful lot of 

support coming from the various governments around the world to 

make that business happen. 

Senator BENNET. Anybody else? I am going to come to you, Mr. 

Ickert. I was in Denver visiting a company called Coolerado that 

makes cooling systems that they export abroad. In fact, literally, 

Mr. Chairman, the day that I was there, they had backed up a container, and they were loading the mechanisms that they make on 

that container and shipping them to Europe as a consequence of 

the insurance they were able to get through the Export-Import 

Bank. And you had mentioned that in the context of nobody in Argentina being willing to provide that, nobody in Brazil being willing to provide it, and not being able to get it here without Ex-Im 

Bank. I wonder if you could talk a little more about that. 

Mr. ICKERT. Not only would our customers in Argentina not be 

able to buy the airplane without Ex-Im’s support, it just does not 

exist for them down there. As small customers, their banking structure is such that they are not able to access credit. The same thing, 

we do not have any banks in the United States that would loan 

money to our customer in Argentina. So it just would not happen. 

That sale would not happen. 

With that sale, they are able to be more productive; they are able 

to create more export sales of their own. But without Ex-Im, it just 

would not happen. And the thing about it, every one of those people 

pay. 

Senator BENNET. By which you mean Export-Import Bank does 

not lose money on these transactions. 

Mr. ICKERT. That is correct. 

Senator BENNET. Yes. At Sandhill Scientific, also in Denver, and 

Leitner-Poma in Grand Junction, I heard the same thing everywhere I went, and these people are not thinking about themselves 

as Democrats or Republicans. They are just small business people 

that are trying to create markets for their products, and I think, 

Mr. Chairman, what we need to do is reauthorize this bill and 

move on to the other work that has to get done. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Senator Warner. 

Senator WARNER. Thank you, Mr. Chairman. I know we have a 

vote coming up. I will try to be brief. I also want to thank you and 

the Ranking Member for your leadership on this. 

The difficulty about going last, especially after my friend Senator 

Bennet, he kind of expressed my concerns. People around the country have got to be scratching their heads saying, ‘‘Why can’t you 

all get your act together and do this?’’ This is not Democrat/Republican. This is common sense. This notion that we would unilaterally 

disarm while other countries around the world are actually increasing their export financing system is just kind of beyond the pale. 

You know, one of the things—and we have talked, and I want to 

echo what Senator Menendez says about the importance on the 

small business side. I have a lot of respect for what machinists are 

doing, Boeing is doing, but if we are going to stay competitive in 

the world, we have got to make sure that small and mid-sized business moves into this export market. Ninety-five percent of all the 
21 

new customers for American business are going to be customers 

abroad. We have been blessed with a mature market, but the future lies in export. And the notion that we would make it more difficult for you all to do that kind of work—and let us face it. For 

the most part, small and mid-sized businesses have not had those 

skills until recently. We need to be doing more beyond just, you 

know, export financing. We need to make it easier in terms of the 

single one-stop for small businesses to figure out how to do this. 

I think the legislation that you all have put together that actually 

increases the authorization from $100 billion to $140 billion is a 

step in the right direction. 

Again, echoing what Mr. Patton said, there is no other country 

around the world that is disarming. They are increasing. I like to 

cite—I know Senator Bennet has got a lot of companies in the solar 

field. At the beginning of this decade, we had, I think, 8 out of the 

10 top solar companies in the world. In 2006, there were only two 

solar companies in the top 10 in China. Now 6 out of the top 10 

are Chinese in solar, just this one field. China is spending on export control out of the China Development Bank $35 billion in 

grants in that field. We are down to $4 billion, and $16 billion in 

loan guarantees. 

You know, here was an area we had the intellectual capital and 

the intellectual property. And the Chinese are not doing it better. 

They are just financing it better. This is, again—and I am going 

to get to a question, but, you know, this just, again, seems to me 

to be a no-brainer, and we need to do it. 

I would simply add a couple of points, I think echoing what Senator Moran said. We have to be careful about that word ‘‘reform.’’ 

But there are things in this bill that I think move forward a little 

bit. We put a requirement for a 5-year strategic plan in place 

where they have got to have metrics because the Bank at times has 

not always been very good at providing the metrics we need and 

the public needs. I think maybe this debate would be easier if we 

had some goals we could show. I think we need to put in place an 

upgrade of the technology system which has been kind of old and 

antiquated. 

Mr. Buffenbarger, I agree with your concerns about American 

jobs, but the one thing that I would—and I have to acknowledge 

I was one of the folks urging that we look at the domestic content 

on the medium- and longer-term components. And I know you disagree with this, but the question I simply say is we need to look 

at what we can do that is going to increase the number of American jobs. And the challenge we have got right now is with the 

way—back to Mr. Patton’s comments about the number of suppliers that you have in terms of that content. I have had American 

companies in my State that have had—because they have had to 

try to go find additional foreign suppliers because it was easier to 

qualify for foreign support than it was for American support, and 

we were losing American jobs. So at the end of the day, it ought 

to be about, yes, domestic content, but it ought to be about the 

number of American jobs created. And all we are saying is we 

ought to not be afraid to look at the facts. No one should be afraid 

of the data. At the end of the day, I would concur, we need to increase American jobs, and I would be happy to have you respond 
22 

to that. But this is a tool that we ought to have in our arsenal. It 

is not going to solve all our problems. I support the Chairman and 

the Ranking Member’s efforts on this, and let us get it done, but 

I will give you the chance to respond with my 25 seconds remaining. 

Mr. BUFFENBARGER. Thank you, Senator. Your comments about 

what the American public thinks about all of this, I think the polls 

are quite conclusive. The American public believes in American 

jobs and that the duty of Congress is to establish some sort of policy and practice that encourages American jobs, thus domestic content. And if we are going to use the taxpayer dollar to support the 

efforts of the Ex-Im, it ought to be used to have products made 

here. That may lead us to another discussion on something called 

an industrial policy, and I know in the halls of Congress that is 

just an abhorrent thought. But every country that kicks our relative tail ends practices an industrial policy except the United 

States, and here we are having a debate today in our Congress 

about financing what is left here, enabling it to sell its products 

overseas. 

Senator WARNER. And all I would say, sir, is I concur with you. 

The criteria ought to be American jobs, and the challenge, perhaps 

not so much on aircraft but particularly in certain other areas, is 

because of the supply chain component of so many different components going into that supply chain. We might, very worthy policy, 

may be actually undermining American jobs, particularly in small 

and mid-sized businesses. I do not think it is the case on the aviation side, but I would imagine Mr. Patton would say that—do you 

want to comment on that, Mr. Patton? Again, I know my time has 

expired, Mr. Chairman. 

Mr. PATTON. Well, through the 1980s and 1990s, large portions 

of the electronics industry moved overseas, and along with it large 

portions of the supply chain and large portions of the know-how in 

some of the fundamental electronic components. So it is very difficult to find domestic sources for some of those devices. 

Senator WARNER. We ought to have American jobs as a goal. 

Thank you, Mr. Chairman, and I thank you and the Ranking 

Member for your leadership. 

Chairman JOHNSON. I would like to thank our witnesses for their 

testimony today. As the expiration date for the Export-Import Bank 

approaches, I hope we can work together to reauthorize the Bank. 

This hearing is adjourned. 

[Whereupon, at 11:18 a.m., the hearing was adjourned.] 

[Prepared statements and additional material supplied for the 

record follow:] 
23 

PREPARED STATEMENT OF SENATOR JON TESTER 

Mr. Chairman, thank you for calling this hearing today. 

I have been a strong proponent of Export-Import Bank reauthorization and would 

like to see this bill passed as soon as possible so that small businesses, like those 

represented here today and those in Montana can continue to access the Bank’s financing products. In Fiscal Year 2011, Ex-Im provided a record $6 billion in financing to small businesses, an achievement we should all be proud of. The Montana Chamber of Commerce tells me that Ex-Im has supported $4.2 million in export sales by Montana 

companies in the last 5 years. It is no wonder that the Montana Chamber strongly 

supports the reauthorization of the Bank. 

Two-thousand-eleven (2011) also marked an important step for the Export-Import 

Bank in Montana, with the designation of Bank of Montana as Montana’s only authorized Master Guarantee Agreement Lender, facilitating even greater opportunities for direct financing of exports by small businesses in Montana. 

We can and should reauthorize the Bank’s charter before it expires at the end of 

May. I am disappointed we were unable to put aside partisan politics earlier this 

year to reauthorize and improve this important institution. However, given the 

number of jobs at stake in this economy, we need to try again. 

A long-term extension will also provide additional predictability and stability for 

small businesses in the United States and abroad who seek to use the Bank’s products. Short-term extensions will only create additional uncertainty and prevent 

small businesses from being able to close deals. 

In reauthorizing the Bank’s charter, we must also ensure that we hold the ExIm Bank to the highest standards of transparency and accountability. I believe that 

the Committee’s reauthorization adds a number of important provisions that will 

improve transparency at the Bank, including requirements to provide notice and detail to Congress and the public before and after the approval of large transactions, 

including aviation-related transactions. 

Finally, Congress and this Committee must continue to maintain their oversight 

role to hold the Bank accountable for these new transparency and accountability requirements and encourage the Bank to continue improve its record in these areas 

by going above and beyond these measures. Transparency is a critical part of our 

Government, and the Ex-Im Bank should be no exception. 

Mr. Chairman, I appreciate you holding this hearing today and your and Ranking 

Member Shelby’s leadership on this important issue. I look forward to working with 

you to address outstanding concerns regarding this legislation and passing a longterm extension before the program expires at the end of May. 

PREPARED STATEMENT OF SENATOR MICHAEL F. BENNET 

Mr. Chairman. Thank you for holding this important and timely hearing. 

During the recess, while I was in Colorado, I had an opportunity to visit innovative businesses like Coolerado, which creates energy efficient air conditioners, 

Sandhill Scientific, which manufactures medical devices, and Leitner-Poma, which 

builds custom gondolas. All of these companies rely on financing options from the 

Export-Import Bank to compete in the international marketplace. 

As we emerge from the worst recession since the Great Depression, we should be 

looking for more opportunities to support the next Coolerado, Sandhill Scientific, or 

Leitner-Poma. 

While GDP and productivity now exceed where they stood before the onset of the 

recession, millions of people are still looking for jobs. Just as troubling, median 

household income is about 7 percent less than where it was in the late 1990s. 

Given this backdrop, we should be looking for ways to increase exports and support domestic manufacturing. 

The Export-Import Bank is an important part of this equation. 

I hope that we will move promptly to extend the Bank’s authority, which expires 

at the end of May. It’s important to both our Nation’s competitiveness and to Colorado jobs. 

I look forward to the testimony. 

Thank you Mr. Chairman. 

PREPARED STATEMENT OF SENATOR KAY HAGAN 

Thank you Mr. Chairman. I wanted to speak briefly about the importance of reauthorizing the Export-Import Bank. 
24 

The bipartisan legislation that we approved unanimously in October of last year 

would reauthorize the Export-Import Bank through 2015. 

It is fiscally responsible and bipartisan measure that will level the playing field 

for American exporters and will allow U.S. businesses to create jobs. 

If we do not act with urgency, the Ex-Im Bank will not be able to guarantee new 

loans starting May 31. 

Our economy is finally showing some hopeful signs of recovery and now is not the 

time to let partisanship tie the hands of our small business owners who are ready 

to expand their companies and export their products. In North Carolina, since 2007 the Ex-Im Bank supported over $1.8 billion in export sales by 169 companies. One-hundred-sixteen of those North Carolina companies are small businesses—the backbone of our economy. 

I have convened two Global Access Forums in North Carolina, one in Charlotte 

and one in Greensboro, with Bank President and Chairman, Fred Hochberg. 

We had over 400 North Carolina small business owners attend the workshops to 

learn more about exporting. My four favorite words are ‘‘Made in North Carolina,’’ 

and I have been proud to work with the Ex-Im Bank to help get that label shipped 

all over the globe. 

Whether it is a small yarn company in Sanford, North Carolina, a furniture producer in Morganton, North Carolina or a turbine manufacturer in Charlotte, just 

to name a few—the Export-Import Bank is a lifeline for growth for thousands of 

businesses who are ready to expand, hire and export. 

In addition to being an engine for job growth, a reauthorization of the Export-Import Bank does not add to our deficit. In fact, it more than pays for itself. Since 2005, $3.7 billion has been sent to the 

U.S. Treasury by the Ex-Im Bank. And the nonpartisan Congressional Budget Office 

estimates that a reauthorization will reduce the deficit by $900 million over 5 years. 

Reauthorizing the Export-Import Bank is commonsense, it is bipartisan, it is fiscally responsible and it is necessary for continued job growth. 

PREPARED STATEMENT OF ROBERT PATTON 

PRESIDENT AND CEO, PATTON ELECTRONICS CO. 

ON BEHALF OF THE U.S. CHAMBER OF COMMERCE

APRIL 17, 2012 

The U.S. Chamber of Commerce is the world’s largest business federation, 

representing the interests of more than three million businesses of all sizes, 

sectors, and regions, as well as State and local chambers and industry associations. 

More than 96 percent of the Chamber’s members are small businesses with 

100 or fewer employees, 70 percent of which have 10 or fewer employees. 

Yet, virtually all of the Nation’s largest companies are also active members. 

We are particularly cognizant of the problems of smaller businesses, as well 

as issues facing the business community at large. 

Besides representing a cross section of the American business community 

in terms of number of employees, the Chamber represents a wide management spectrum by type of business and location. Each major classification 

of American business manufacturing, retailing, services, construction, 

wholesaling, and finance—is represented. Also, the Chamber has substantial membership in all 50 States. 

The Chamber’s international reach is substantial as well. It believes that 

global interdependence provides an opportunity, not a threat. In addition to 

the U.S. Chamber of Commerce’s 115 American Chambers of Commerce 

abroad, an increasing number of members are engaged in the export and 

import of both goods and services and have ongoing investment activities. 

The Chamber favors strengthened international competitiveness and opposes artificial U.S. and foreign barriers to international business. 

Positions on national issues are developed by a cross section of Chamber 

members serving on committees, subcommittees, and task forces. More than 

1,000 business people participate in this process. 

* * * 

Chairman Johnson, Ranking Member Shelby, and distinguished Members of the 

Senate Committee on Banking, Housing and Urban Affairs, thank you for the honor 

of allowing me to testify in this hearing. My name is Robert Patton, and I am the 
25 

President and CEO of Patton Electronics Co., based in Gaithersburg, Maryland. I 

am testifying today on behalf of the U.S. Chamber of Commerce, the world’s largest 

business federation, representing the interests of more than three million businesses 

of all sizes, sectors, and regions, as well as State and local chambers and industry 

associations. Today, I would like to speak about the important benefits of an agency 

that helps small businesses tap foreign markets and create American jobs. This is 

the Export-Import Bank of the United States (Ex-Im). 

Background on Patton Electronics Co. 

While still in college, my brother, Burt, and I started Patton Electronics Company 

with the goal of financing the rest of our college education. Within a few months, 

we convinced our older brother, Bruce, to help us with the manufacturing side of 

the business. Bruce brought experience and expertise in production, planning, and 

general management. 

We utilized our father as our venture capitalist. From his investment of a gift of 

$5,000 to each of us, the use of his basement, his wisdom, and some of his connections, we developed our small direct-mail data communications products company. 

As we evolved, more and more funding was required. By our third year, Dad generously put his total retirement at stake—but came to help lead the company as CEO 

for the next 15 years. 

Under my father’s direction, we developed a wide range of products. I took responsibility for product development, Burt ran sales and marketing, and Bruce took responsibility for accounting and operations. 

Over the intervening years we have built a tremendous team and have continued 

to grow. The company now has sales in over 120 countries and generates about 70 

percent of its revenue outside the United States through a network of over 200 

Channel Partners. 

Our best selling products are Voice over the Internet (VoIP) products, mobile 

video surveillance products, and a wide range of network access devices. We now 

occupy a 50,000 square foot manufacturing facility in Gaithersburg where we have 

more than 100 employees working in sales, marketing, manufacturing and engineering. 

The Case for the Export-Import Bank 

Trade finance has been around for centuries. It’s one of the safest kinds of finance 

because the goods sold serve as collateral, and the buyer, the seller, and the price 

have already been set. 

The vast majority of trade finance is provided by commercial banks, but Ex-Im 

still has an important role to play covering gaps in financing for U.S. exports where 

commercial-bank financing is unavailable or faces competition from foreign export 

credit agencies. Last year, Ex-Im supported export sales that in turn sustained 

nearly 300,000 U.S. jobs at 3,600 companies. 

However, Ex-Im’s temporary reauthorization will expire on May 31, and failure 

to reauthorize its operations and raise its lending cap to an internationally competitive level would seriously disadvantage U.S. companies—like mine—in foreign markets, potentially resulting in the loss of thousands of U.S. jobs. 

Ex-Im is especially important to small- and medium-sized businesses, which account for more than 97 percent of the quarter million U.S. companies that export. 

Appropriately, more than 87 percent of Ex-Im’s transactions involve small or medium-sized firms. Tens of thousands of smaller companies that supply goods and 

services to large exporters also benefit from Ex-Im’s activities. In FY 2011, Ex-Im 

provided more than $6 billion in financing and insurance for U.S. small businesses—an increase of nearly 90 percent since FY 2008. Ex-Im has set the goal of 

providing $9 billion in annual small-business export financing and adding 5,000 new 

small businesses to its portfolio by 2015. 

As the President of a small company, I can tell you first-hand about the important 

role Ex-Im plays. The working capital that I have to operate my business is proportional to the revenue that I am generating. The money my customers owe me serves 

as collateral for loans I need to pay my employees, my suppliers, and even my taxes 

until I get paid by my customers. Since more than 70 percent of my revenue is coming from exports, about 70 percent of my line of credit with the bank is backed by 

Ex-Im. The Ex-Im Bank enables us to export to many markets as it provides loan 

guarantees and insurance on our receivables. Those loan guarantees allow my international receipts to be used as collateral the same way my domestic receipts are 

used. 

As our business grew through the 1990s, the Internet gave us exposure to overseas customers. We began to sell to them little by little. As exports began to comprise a measurable portion of my revenue, my bank began to take notice. Our local 
26 

bank didn’t want to lend against those international receivables the way they lend 

against domestic receivables. We could not afford to take orders from international 

customers in significant volumes, and in most cases we would require the buyer to 

pay in advance. This put us at a severe disadvantage over local suppliers and international vendors who had the backing of their national export credit agencies. 

In 2000, a competing bank introduced us to Ex-Im’s working capital line of credit. 

Under this new relationship, I received a guarantee from Ex-Im, which made my 

bank willing to loan up to 90 percent of my overseas receivables as working capital! 

Our business grew by about 40 percent the following year and has continued to 

grow for the last 13 years. From 1999 to 2000 (when we added the Ex-Im line of 

credit), we were able to hire more than 40 new employees due to the boost in exports that happened through the use of the Ex-Im Bank. A few years later, we were 

able to close a single order in excess of $3 million, adding more than 10 percent 

to our revenue using the Ex-Im Buyer Financing products. 

By having our revenue spread across different markets, we have distributed our 

risks such that our business is not as prone to the economic ups and downs of one 

market or any particular competitor or even a few local customers. The global economic ebbs and flows have offset each other over the years, allowing us to sustain 

jobs during the slow times in the United States and grow employment as emerging 

markets expand. 

Even as it helps U.S. companies large and small, Ex-Im also has a proven record 

of success. Far from being a burden on the taxpayer or a subsidy for corporations, 

Ex-Im Bank is a net revenue generator for the Treasury. Fees charged by Ex-Im 

generated $700 million in revenue for the U.S. Treasury in FY 2011 and $3.4 billion 

in FY 2006–FY 2010. As Congress tackles trillion dollar deficits as far as the eye 

can see, refusing to reauthorize Ex-Im will actually add to those deficits. 

Ex-Im lending exposes the taxpayer to very little risk. Borrowers have defaulted 

on less than 2 percent of all loans backed by Ex-Im since its inception in 1934, a 

default rate lower than commercial banks. 

Perhaps the most compelling argument in favor of Ex-Im’s reauthorization is that 

failure to approve it would amount to unilateral disarmament in the face of other 

nations’ aggressive trade finance programs. Look at the competition. Though it has 

an economy one-tenth the size of the United States, Canada supports an export 

credit agency that has extended nearly three times as much export financing as ExIm—and it does so on terms that are often more generous and easy to use. China 

has three export credit agencies that last year provided $300 billion in export finance to its exporters—10 times as much as Ex-Im Bank did. 

With other countries’ export credit agencies providing an estimated $1 trillion in 

export finance—often on terms more generous than Ex-Im can provide—failure to 

approve this reauthorization legislation will put U.S. exporters at a sharp competitive disadvantage. The fact that Congress has so far declined to approve a long-term 

reauthorization has become a selling point for foreign competitors to U.S. firms, who 

point to their own generous financing capabilities. 

To give another real world example—this time from a large company—GE recently sold four turbines in Tanzania with Ex-Im Bank support in a deal worth $125 

million. A single one of these turbines can be turned into a complete power plant 

to provide 200MW worth of power. GE found that private sector financing could not 

match the competing offer supported by Britain’s export credit agency—only Ex-Im 

Bank was able to match that offer and allow GE to make the sale. 

If there is no reauthorization, the results could be catastrophic for our business. 

I don’t know how our bank will react; certainly I expect they will reduce our borrowing and demand payment of the difference. That payback would come at the expense of employment. If they cut the collateral value in half, I’d be cutting more 

than 20 jobs. If they discount our international revenues as collateral altogether, I 

will be forced to terminate as many as 70 people. With that kind of cut, I would 

not be able to sustain engineering and manufacturing operations and may be forced 

to out-source—obtaining products from overseas rather than selling our own. 

Global Access for Small Business 

At the beginning of 2011, the Ex-Im Bank announced its Global Access for Small 

Business (Global Access) initiative, which aims to help more than 5,000 small companies export goods and services produced by U.S. workers. The Global Access initiative is a key component of Ex-Im’s work supporting the National Export Initiative 

(NEI) and its goal of doubling U.S. exports by 2014. 

To reach these benchmarks, the Bank is offering new credit and insurance products as well as streamlining product delivery. In addition, extensive outreach to educate companies about export assistance resources is being conducted throughout the 

country. The U.S. Chamber is one of several organizations partnering with Ex-Im 
27 

to organize outreach forums across the country, directly inform small businesses 

about export opportunities, and highlight companies that have increased sales, profits, and jobs through exports. Over 20 Global Access forums were held nationwide 

last year and more than 3,000 small companies have been engaged to date. 

Outreach like this is critical to small businesses. In the 1990s most banks in my 

region did not have a relationship with Ex-Im. Now, most banks in our region do 

offer Ex-Im Bank facilities, providing me with good choices between banks based on 

other services. These outreach forums ensure that every potential exporter across 

in the country has access to the same kinds of tools currently available to me and 

also to their international competitors through comparable programs in other countries. Without Ex-Im, U.S. exporters are at a severe disadvantage in a global marketplace that often doesn’t present a level playing field. 

In addition to the Ex-Im Bank’s increased outreach to small businesses, there are 

other efforts the Ex-Im Bank could take that would further boost small business exports. Ex-Im sometimes has difficulty scaling the paperwork to the size of the company, the size of the deal and the relative risks. Most banks already have the credit 

information of the small business. Separate paperwork for Ex-Im could be greatly 

reduced or eliminated by relying on the internal bank credit documents or having 

delegated authority for smaller banks at smaller amounts. 

For buyer financing opportunities, often the deals are smaller than the big businesses bring. Smaller deals usually take less time to close, which requires an expedited process to be competitive. Providing online applications for foreign buyers that 

can be linked from U.S. producer Web sites is one way to streamline the paperwork. 

In general, Ex-Im should be encouraged to think simpler and smaller in order to 

engage more small businesses. Small businesses ready for exporting are generally 

financially stable; I am not suggesting Ex-Im enable unwarranted credit facilities 

inconsistent with the business size and risks. 

* * * 

The bottom line is simple: If America fails to look abroad, our workers and businesses will miss out on huge opportunities. Our standard of living and our standing 

in the world will suffer. With so many Americans out of work, opening markets 

abroad to the products of American workers, farmers, and companies is a higher priority than ever before. 

Ex-Im is a vital tool for translating those export opportunities into American jobs. 

As president of a company, I truly understand the importance of international trade 

and the impact it can have on small business. It’s simple: we want to ship to more 

countries, grow our client base, and create more jobs. Ex-Im helps me do this. 

Ex-Im’s critics say it picks winners and losers. It doesn’t. Ex-Im finances all transactions that meet their criteria. However, if Congress fails to reauthorize Ex-Im, it’s 

picking foreign companies as winners and American companies as losers. I respectfully urge Congress to move swiftly to reauthorization the Export-Import Bank. 

Thank you for the opportunity to testify. 

PREPARED STATEMENT OF SONYA KOSTADINOVA 

PRESIDENT AND CEO, TRANSCON TRADING CO., INC. 

ON BEHALF OF THE SMALL BUSINESS EXPORTERS ASSOCIATION

APRIL 17, 2012 

Chairman Johnson, Ranking Member Shelby and Members of the Committee, 

thank you for the opportunity to testify on the reauthorization of the Export-Import 

Bank of the United States (Ex-Im). My name is Sonya Kostadinova and I am the 

owner, president and CEO of Transcon Trading Co., Inc, located in Columbia, South 

Carolina. It is my pleasure to testify before you today on why the reauthorization 

of Ex-Im is critical to small businesses such as mine. I am also here in my capacity 

as a board member for the Small Business Exporters Association (SBEA), the Nation’s oldest and largest small- and medium-size exporter (SME) association, which 

is a council of the National Small Business Association. 

U.S. Small Business Administration (SBA) data shows that approximately 70 percent of all U.S. exporters have 20 or fewer employees. Transcon Trading Co., Inc. 

is one of these companies. Our mission is to help other small- and medium-size companies, namely U.S. manufacturers, to create brand awareness overseas and establish or increase existing exports by providing value added services in all facets of 

exporting. 

Transcon is an export management company (EMC) that has been in business 

since 1979. We represent internationally approximately 80 U.S. small- and medium- 
28 

size manufacturers from several different industries—consumer personal care and 

health care products, pet food and pet care products, equine health care products 

and other specialty products—and build distribution networks for them overseas. 

Essentially, we perform the functions of an export department for those U.S. manufacturers that are too small to afford or do not have the expertise to establish their 

own in-house export department, or opt to tap into our already established distribution network overseas. 

The United States is a world leader in most of the industries in which we operate 

and has a great deal to offer to the world marketplace in terms of the highest quality standards and latest technological innovations implemented in their products. 

Many of the breakthroughs come from very small businesses, including startups, 

some of which can become a favorite, leading brand in international markets before 

the U.S. marketplace even hears about them—made in the USA still carries a lot 

of cache around the world. Yet export financing, or lack thereof, continues to hold 

back many U.S. manufacturers. Just as smaller companies in the United States represent our best bet for new exports, so also do smaller companies overseas represent 

our best bet for new buyers of American products and services. 

Exporting is not easy. Many people have an incorrect assumption of exporting, associating it with the logistics only of an export transaction. The logistics are indeed 

a very important part of it, but there are a whole host of other business generating 

activities that have to do with identifying the right importers/distributors in other 

countries. Among those ‘‘other’’ tasks exporters must handle—and which we take 

care of for our clients—are: negotiating and signing distribution agreements; building relationships with the clients; marketing and advertising their products in the 

foreign countries; assisting in foreign country product registrations where necessary; 

preparing the entire export documentation package to aid customs clearance; and 

assuming title of the goods and therefore the fiscal responsibility that comes with 

it. 

My company, Transcon takes care of all this, we pay the manufacturers as soon 

as the goods leave their warehouse, and at the same time extend credit terms to 

qualified international buyers as part of an attractive export services package. 

These difficult tasks which we handle enable us to expand our business as well as 

that of many U.S. manufacturers. 

And this is where Ex-Im comes to play an instrumental role for us by insuring 

our foreign receivables. We have a Multi-Buyer Export Credit Insurance Policy with 

Ex-Im including Discretionary Buyer Credit Limit (DCL) and Special Buyer Credit 

Limit (SBCL). Although Transcon has utilized Ex-Im programs since 1993, my personal, close observation and participation in this process dates back to the early 

2000s. 

Between 2003 and 2008—before the severity of the global recession hit-we had almost doubled our exports in large part due to Ex-Im’s credit insurance of our foreign 

receivables. Over the last 20 years, Ex-Im Bank has been a strong driving force behind our growth in exports. In our experience, offering credit term facility to foreign 

buyers can significantly increase any company’s negotiating power, resulting in 40– 

60 percent increases in export sales. 

One of the reasons why many U.S. manufacturers lose business to foreign competitors is the fact that they are afraid to sell on open account, i.e., to assume the 

financial risk of offering credit terms to foreign buyers. Receivables’ insurance is not 

as popular in the United States as it is in Europe, for example: per 2008 data, Western Europe utilizes 83 percent of the global credit insurance market (Germany/26 

percent, France/18 percent, U.K./18 percent. The rest of the world only uses 17 percent (of which North America uses only 6 percent). There are a number of good geographical and historical reasons for that diminutive number but the fact remains 

that U.S. private banks don’t typically offer credit risk insurance. There are some 

exceptions but most of us are too small to qualify. Even if we did, it would be cost 

prohibitive and therefore not worthwhile going through the process. 

This leaves small businesses like mine with very limited options outside Ex-Im 

Bank. 

Confident of its important role, we have promoted Ex-Im’s services to as many 

companies as possible throughout the years. As an adjunct professor of exporting 

at the number-one international business program in the country at the Moore 

School of Business at the University of South Carolina, I designate a special session 

in my class on Ex-Im and its role in credit financing of export transactions. I want 

the young entrepreneurs in my class—many of whom start their export companies 

during the semester as a class project—to know that they are not alone and if no 

private banking institution steps up to provide export financing, Ex-Im can. There 

are many companies in this country that either are not familiar with Ex-Im or only 

have a limited knowledge of Ex-Im and their services. Therefore, my class is just 
29 

one resource to increase the outreach and word of Ex-Im to future small businesses. 

In my opinion there are many U.S. small businesses that could be exporters except 

for the fact that they do not know where to turn and/or the existence and services 

of Ex-Im. 

In fact, according to a past survey by SBEA and NSBA, 56 percent of small businesses surveyed by said concerns over getting paid and cost are the main barriers 

to exporting. Forty-three percent of small businesses said they would be interested 

in exporting if some of their concerns were addressed. Ex-Im clearly has the potential to help many small businesses begin or expand exporting operations which 

would, without question, bolster the U.S. economy. 

In 2011 Transcon registered exports to about 80 countries. In addition to representing other manufacturers’ brands overseas, we have our own branded pet 

grooming line that has enjoyed loyal, international customers for a couple of decades 

now. Ex-Im Bank has been a strong driving force behind our growth in exports. 

Getting export credit financing and insurance is a very difficult, expensive and 

cumbersome process—and oftentimes not possible at all—for a small business, if 

done through private sector banking institutions. Ex-Im Bank provided that supporting arm to us and helped us double our exports. It is unthinkable for us to not 

only continue this export expansion, but also to even continue to exist as an EMC 

without the support of Ex-Im Bank. Without it, we would lose most of our open account buyers to European competitors who receive massive amounts of support in 

export financing and foreign receivables insurance from their own export credit 

agencies. 

During the global recession, we witnessed incredible proliferation of protectionism 

around the world. Signing free trade agreements alone is not enough anymore to 

protect the U.S. manufacturers’ right to fair trade. Many governments enforced impossible regulatory restrictions in the form of country specific registration and importation requirements, which effectively become nontrade barriers to entry. While 

it would take the United States a longer term effort involving negotiations at the 

highest level with many governments to bring some much needed balance to that 

process, Ex-Im Bank’s reauthorization can be an act taken domestically that would 

have equal, if not bigger, importance and impact on our ability to export. 

We could swallow the losses in one country, due to overly burdensome regulatory 

requirements, and refocus and redirect our efforts to those other countries that still 

allow fairer and equitable trade practices, but without the export credit financing 

and foreign receivables insurance, it is unlikely that we will succeed to outperform 

our foreign competitors. We would lose the battle in the very initial stage of negotiations as one of the first questions asked by interested foreign buyers is ‘‘Do you offer 

credit terms?’’ 

In addition, we found out the hard way that many U.S. private banks would not 

even extend operating credit to us as they do not accept foreign receivables as collateral, only domestic receivables and inventory/equipment. Having our receivables 95 

percent covered by the Ex-Im Bank Insurance Policy has allowed us to leverage 

them along with the inventory and have our credit line approved. For many small 

businesses, this positive side effect is equivalent to a life line support that allows 

export expansion. As we all know, growth is usually painfully associated with cashflow struggle/problems. 

U.S. Department of Commerce 2008 data shows that 1 out of 20 or 6 million jobs 

in America depend on manufactured exports. Export related jobs pay an estimated 

13 to 18 percent more than the U.S. national average. Unfortunately, the United 

States is underperforming: less than 1 percent of America’s 30 million companies 

export. Of those that export, 58 percent export to only one country. In my home 

State of South Carolina, export-supported jobs linked to manufacturing account for 

an estimated 9.2 percent (the fifth highest share among the 50 States) of South 

Carolina’s total private-sector employment. Well over one-fourth (28.9 percent) of all 

manufacturing workers in South Carolina depend on exports for their jobs, the second highest among the 50 States. 

Small businesses are a critical component of the U.S. economy, with 27.5 million 

businesses employing half of the private U.S. workforce. Many of these small businesses rely on exporting to increase their sales, grow their business and create new 

jobs. With 95 percent of the purchasing market outside of the United States, small 

businesses understand the importance of opening new markets and competing in the 

global marketplace. In fact, 97 percent of identified U.S. exporters are small businesses, yet that represents only a fraction of those who could compete abroad. 

Small businesses rely on exports to increase their sales, strengthen their longterm viability and create new jobs. U.S. exports in 2010 supported nearly 10 million 

jobs, including an estimated four million for small businesses. Total U.S. exports in 

goods and services reached $1.8 trillion in 2010, nearly 12 percent of U.S. gross do-
30 

mestic product. A U.S. International Trade Commission’s report showed exporting 

small businesses averaged 37 percent revenue growth from 2005 to 2009; compared 

to a decline of 7 percent for non-exporting small businesses. One billion dollars in 

U.S. exports creates 6,000 new jobs. 

Over the next 4 years, the demand for U.S. products and services will likely grow 

dramatically. Ex-Im Bank’s role as ‘‘lender of last resort’’ will, in the coming years, 

be even more critical to leveling the playing field for small U.S. exporters. In fact, 

for smaller companies, Ex-Im is not the bank of last resort. It is the bank of only 

resort. 

Our expansion results in direct job creation not only for Transcon and South Carolina, but also for many other States in the country as the manufacturers we represent are located all over the United States. We have had about $50,000,000 worth 

of foreign receivables insured by Ex-Im for which we paid a premium of $364,000; 

this shows well below 1 percent cost associated with the insurance premium. Private 

sector premiums would be a lot higher than that and therefore unaffordable by 

small businesses. 

Since 2006 we have had only one claim (filed in 2008) and it was for less than 

$2,500. We have had zero claims since then. 

Ex-Im’s export credit insurance has given us peace of mind and allowed mitigation against both commercial and political risks and made our foreign receivables 

eligible for financing. During the economic crisis, Ex-Im Bank did not cancel or reduce coverage on buyers when most (with very few exceptions) of the private sector 

insurance did, which caused a major problem. When the private insurance companies canceled coverage that caused the banks’ lending against those formerly insured foreign accounts receivables to stop lending. 

As our prominence overseas has grown, we now have buyers who could use ExIm Bank’s project financing and credit guarantee facility program. Positioned to 

move to bigger projects, Transcon was stepping up the intention of using Ex-Im 

Bank’s lending capabilities more actively. Now we have been forced to put all of 

these projects on hold due to the ongoing instability created by Congress’ failure to 

enact a long-term reauthorization. 

We need Congress’ understanding and swift action NOW to reauthorize the ExIm Bank for 4 years with a $140 billion lending cap. With the current extension 

set to expire at the end of May 2012, Congress must act soon; otherwise exporters 

could see their lender of last resort falter as it waits for a new reauthorization. This 

uncertainty could have a devastating effect on my and many other small businesses’ 

ability to follow through on sales even though there are buyers who want our products. 

Short-term extensions, as we have seen, will have a paralyzing effect on many of 

Transcon’s ongoing projects. It would hamper our ability to plan, and would provide 

a wide-open door to our international competitors. We cannot afford to invest time 

and resources to build relationships overseas and negotiate with foreign buyers, only 

to find out in the end that one of our strongest negotiating points—Ex-Im Bank’s 

services—are obsolete. Not only would we most certainly lose the opportunity to do 

business with these foreign buyers, but we would have wasted all of our initial investment in the deal. 

Reauthorizing Ex-Im sends a message to the world that the United States remains fully engaged as an exporting Nation. That is a vital message as Ex-Im Bank 

remains a catalyst for the expansion of small-business exports while continuing to 

support businesses confronting aggressive foreign competition. By contrast, failing 

to act now on the reauthorization, and handing off the issue to the next Congress, 

would send an unfortunate signal that exporting is much less of a priority for our 

country. 

In the past, such hesitation on the part of Congress has led to situations where 

companies from competitor nations have raised doubts with the foreign buyers of 

U.S. products about whether trade financing from the United States would continue 

to be available. And that has led to sales cancellations. 

For us smaller companies in international trade, moving forward with a 4-year 

reauthorization with an increase in its lending cap is crucial. Congress has wisely 

taken this opportunity to make a number of long-sought improvements in the 

Bank’s handling of its small-business customers—setting a record in FY 2011 by 

supporting $6 billion in financing and insurance for U.S. small businesses—an increase of nearly 90 percent since FY 2008. Ex-Im Bank has a goal of providing $9 

billion in annual small-business export financing and adding 5,000 new small businesses to its portfolio by 2015. This hefty goal will attract more small businesses 

to exporting, reduce trade deficits and enlarge the Main Street constituency for 

international trade. These very desirable benefits ought not to wait many months 
31 

for a new Congress to act, particularly when the House and Senate were able to 

reach a compromise earlier last year. 

Thank you once again for allowing me to share our experiences and our fears with 

you. We put our faith in you and I urge you to see Ex-Im Bank for what it is, an 

agency that produces results and doesn’t cost taxpayers a dime—not, as some would 

have you believe, a burden on U.S. taxpayers. In order to continue to grow U.S. exports, the U.S. economy, and U.S. jobs, I urge you to reauthorize Ex-Im Bank as 

soon as possible. 

PREPARED STATEMENT OF DAVID ICKERT 

VICE PRESIDENT OF FINANCE, AIR TRACTOR, INC. 

ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS

APRIL 17, 2012 

Chairman Johnson, Ranking Member Shelby and Members of the Committee, 

thank you for the opportunity to testify on the reauthorization of the Export-Import 

Bank of the United States (Ex-Im). My name is David Ickert, and I am the vice 

president of finance at Air Tractor, Inc. of Olney, Texas. 

It is my pleasure to submit the following testimony on behalf of the National Association of Manufacturers (NAM) to the Committee on Banking, Housing and 

Urban Affairs for the hearing entitled, ‘‘Export-Import Bank Reauthorization: Saving American Jobs and Supporting American Exporters.’’ Air Tractor and the NAM 

welcome this hearing on the implications of ExIm Bank reauthorization. I appreciate the opportunity to highlight the importance of broadening opportunities for 

U.S. manufacturers overseas by bolstering Ex-Im Bank. 

As you know, I had the opportunity to testify on June 30, 2011, before the Subcommittee on Security and International Trade and Finance. That hearing was entitled, ‘‘Stakeholder Perspectives on Reauthorization of the Export-Import Bank of the 

United States.’’ In that testimony, I addressed the history of Air Tractor with ExIm and the benefits that Air Tractor, our employees and our community have accrued. 

I will provide a brief summary and update of that testimony below. These comments will provide you with insight into Air Tractor and the extent of Ex-Im’s support for American workers and exporters. Since my testimony before the Subcommittee, there has been no reauthorization of Ex-Im, and the current authorization is scheduled to expire on May 31, 2012. Furthermore, the lending cap has not 

been increased. As such, I will reflect on what impact the failure to reauthorize the 

Export-Import Bank in a timely manner—with an increase in the lending cap—will 

have on Air Tractor’s employees. 

Air Tractor is a small manufacturer engaged in the production of agricultural airplanes and firefighting airplanes. The company has been manufacturing planes 

since 1972 and is now 100-percent employee owned. We have one location—Olney, 

Texas. Olney is a small rural town located 100 miles west of Fort Worth, Texas and 

200 miles east of Lubbock, Texas. The population of Olney is approximately 3,000 

people. Air Tractor currently employs 270 people. 

Air Tractor is also a member of the NAM. The NAM is the Nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 States. Its membership includes both large multinational 

corporations with operations in many foreign countries, and small and mediumsized manufacturers that engage in international trade. The manufacturing sector 

employs nearly 12 million Americans and is the engine that drives the U.S. economy 

by creating jobs, opportunity and prosperity. Exports are vital to the success of 

American manufacturing, as they constitute 20 percent of U.S. manufacturing production and have increased at a rapid clip in recent years. In fact, over the past 

decade, exports grew more than five times as fast as shipments to the domestic market—exports grew by 48 percent while domestic shipments grew by only 9 percent. 

Air Tractor began using Ex-Im in 1995. We utilized the Export-Import Bank’s medium-term credit insurance product then, and we have continued to use that product throughout the years. We use that product in our current transactions. 

We believe that the Export-Import Bank is essential to exports of U.S. products. 

For instance, in FY 2011, Ex-Im was involved with 3,751 transactions that supported nearly $42 billion in exports from more than 3,600 U.S. companies. Of those 

transactions, 3,247—87 percent—were with small-business exporters. All of those 

transactions added up to $6 billion in Ex-Im financing in FY 2011. The Ex-Im Bank 

pays for itself (through the fees it charges to foreign buyers) and—above and beyond 

that—returns money to the U.S. Treasury. From 2006 to 2010, Ex-Im Bank re-
32 

turned $3.4 billion to the Treasury. Ex-Im is a net gain for the Federal Government 

and for the taxpayer. Furthermore, the Bank has maintained its incredibly low default rate (1.5 percent) through the recession and through several years of record 

growth. 

With the Export-Import Bank’s medium-term credit insurance product, Air Tractor is able to extend credit to our customers in foreign countries for the purchase 

of our airplanes. The credit extension is done in the form of a promissory note payable from the customer to Air Tractor. The term of the note is usually 5 years, payable in 10 equal semi-annual installments, plus accrued interest. After underwriting 

and approving the credit of our customer, Ex-Im issues its medium-term credit insurance in favor of that customer. Once Air Tractor has the Export-Import Bank’s 

medium-term credit insurance on the note, we then sell the note to our commercial 

bank and receive our cash. As a small business, we are unable to hold any significant amount of paper. Air Tractor is only able to convert paper to cash with the 

credit insurance of Ex-Im. 

When we first started using Ex-Im in 1995, exports were approximately 10 percent of sales. Through the use of Ex-Im’s medium-term credit insurance product, we 

have been able to grow and expand sales such that exports now comprise over 50 

percent of our sales. The chart below illustrates these totals over the last 5 years. 

Year Air Tractor Employment Aircraft Sold Percent Exported 

2007 165 58 36% 

2008 197 101 45% 

2009 204 101 49% 

2010 220 123 56% 

2011 267 137 50% 

There are some important issues to be highlighted from the description above: 

• Ex-Im Bank products were used in countries where the local banking structure 

would not support 5-year loans to our customers to buy an aircraft. 

• No U.S. bank would make a loan to our foreign customers for the purchase of 

our aircraft. 

• No U.S. bank would buy our purchase notes receivables from Air Tractor without them being issued by Ex-Im. 

• The sales represented by these insurance notes would not have taken place 

without the described financing. 

• Exports have increased our market footprint in the world and have increased 

our total sales. 

• The sales increase as a result of Ex-Im insurance notes has created and sustained jobs. 

• Job creation at Air Tractor in Olney, Texas, is the direct result of being able 

to use Ex-Im’s medium-term credit insurance product to make export sales. 

• The Ex-Im product has helped us facilitate export sales and create jobs in 

Olney, Texas. Air Tractor strongly supports the reauthorization of Ex-Im. 

If Ex-Im is not reauthorized by the May 31, 2012 expiration date, the impact 

could be devastating to Air Tractor (and many others companies here in the United 

States). Air Tractor’s situation offers a very straightforward illustration of what 

could happen without reauthorization. 

For the calendar year 2012, Air Tractor has 175 aircraft scheduled for production. 

A great deal of time and planning is required in order to start the process and to 

put orders into our supply chain to meet this record production level. Of the 175 

planes in our 2012 schedule, we have identified 44 that will require Ex-Im Bank 

medium-term credit insurance support. That is 25 percent of our 2012 production. 

Without Ex-Im support, most (if not all) of these 44 sales will go away. There is 

no alternative for us to use to make these sales. If the Export-Import Bank is not 

reauthorized, 68 jobs at Air Tractor will be in jeopardy. Not only would these 68 

employees be directly at risk, but other employees in small retail businesses along 

Main Street would also be at risk. 

Furthermore, American manufacturing jobs, such those in Olney, Texas, will be 

at risk if the lending cap for the Export-Import Bank is not increased. Currently, 

Ex-Im is close to its $100 billion lending cap. If the Bank reaches its lending cap, 

that is tantamount to shutting Ex-Im down. The devastating impact on Air Tractor, 
33 

its employees and suppliers is the same whether the Export-Import Bank is not authorized or if it is authorized and the lending cap is not adequately increased. 

As I noted, Olney is a small rural town. Olney is probably not thought of as a 

community where significant exports originate. However, thanks to the products of 

Ex-Im, exports originate out of Olney, Texas, and jobs are created. This is a scenario 

that is common all over our Nation. 

As Air Tractor illustrates in Olney, Texas, without Ex-Im and without an adequate lending cap, jobs are endangered in communities throughout the United 

States. Ex-Im helps create and sustain jobs through exports. Ex-Im returns money 

to the U.S. Treasury. 

On behalf of the NAM, Air Tractor strongly supports and urges quick action on 

the part of Congress on a long-term reauthorization for Ex-Im with an adequate increase in the lending cap. 

In closing, thank you Chairman Johnson and Ranking Member Shelby for holding 

this hearing and for allowing me the opportunity to testify. 

PREPARED STATEMENT OF R. THOMAS BUFFENBARGER 

INTERNATIONAL PRESIDENT

INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS

APRIL 17, 2012 

Thank you, Chairman Johnson, Ranking Member Shelby, and Members of this 

Committee for the opportunity to testify before you today on the vital importance 

of the Export-Import Bank to our industrial base and the creation and preservation 

of American manufacturing jobs. My name is Tom Buffenbarger and I serve as 

International President of the International Association of Machinists and Aerospace Workers, also known as the IAM. As a broadly diversified manufacturing 

union and the largest aerospace union in North America, representing over 700,000 

active and retired members, the IAM is particularly concerned about the need to 

fully reauthorize the Ex-Im Bank. 

While much of the Ex-Im Bank’s focus relates to the sale of Boeing aircraft, we 

also represent workers at companies like Caterpillar, Pratt and Whitney, John 

Deere, General Electric, as well as numerous small- and medium-sized firms that 

export a variety of American made products crucial to our economic health. Given 

our members work with these exporting firms, we are uniquely positioned to share 

with you our strong belief that the Ex-Im Bank’s reauthorization must be approved 

immediately. Indeed, the Ex-Im Bank is one of the few tools that we have to support 

exports that in turn contribute directly to American jobs. At a time when our fragile 

economy is still recovering and millions of manufacturing workers are still without 

work, we are baffled why the Ex-Im Bank’s reauthorization and, consequently, its 

ability to fulfill its critical mission is being held up. This mission, however, cannot 

be fully accomplished if domestic content requirements are weaken as some have 

proposed. There is a clear link between American jobs and domestic content. We 

should look to strengthen, not weaken these vital provisions, otherwise the Ex-Im 

Bank will be engaging in corporate welfare that would incentivize the offshoring of 

American jobs. 

Global competition has never been more intense and the stakes for our economy 

have never been higher as U.S. firms and workers struggle to compete in today’s 

global marketplace. Successful countries recognize the importance of a strong manufacturing sector and the true nature of global competition. These countries know 

that there is no such thing as a ‘‘free market,’’ and provide strong support for critical wealth and job creating industries like aerospace. 

The United States, unfortunately, has too often blindly embraced a free market 

ideology that has opened our domestic markets to foreign goods while offshoring the 

production of American created technologies and products, as well as millions of 

good paying jobs. We have repeatedly seen this with electronics, green technologies, 

and a host of consumer products. The result has been a gaping trade imbalance with 

the rest of the world. According to the U.S. Census Bureau, our trade imbalance 

grew by more that 10 percent in 2011 to over $558 billion. While there was a small 

positive balance in services, the deficit in goods increased by 14 percent to over $737 

billion with the largest increase coming in our deficit with the People’s Republic of 

China, a rapidly growing country that engages in a variety of unfair trade practicesillegal subsidies, forced technology transfer, currency manipulation, and an appalling lack of labor rights. The Economic Policy Institute estimates that over the last 

decade our trade imbalance just with China has cost the United States nearly three 

million jobs. Many of these jobs have been in manufacturing, a sector in which each 
34 

manufacturing job supports three to four additional jobs in the economy. With our 

economy struggling with persistent high unemployment and starving for more rapid 

job creation, it is no surprise that so many working families have such a dim view 

of the future. 

Nor should it come as a surprise that countries across the globe have set their 

sights on one of the few remaining sectors where the United States enjoys a positive 

balance of trade with the rest of the world—aerospace. For 2011, the U.S. aerospace 

industry had a trade surplus of $7.25 billion, the largest of any advanced technology 

sector. According to a recent study by Deloitte on the economic effect of the U.S. 

aerospace and defense industries, aerospace products and parts manufacturing contribute over $40 billion to U.S. payrolls and impact every State. It should be noted 

that the U.S. military and commercial aerospace sectors are deeply interconnected, 

particularly in the supply chain. Many of our members will work on both military 

and commercial aerospace products. Weakening our commercial sector will have a 

direct impact on the capabilities of the U.S. aerospace defense industrial base. 

Since the Ex-Im Bank began in the 1930s, its mission has been ‘‘to assist in financing the export of U.S. goods and services to international markets,’’ enabling 

‘‘large and small companies to turn export opportunities into real sales that help 

to maintain and create U.S. jobs and contribute to a stronger national economy.’’ 

Contrary to the position of some organizations, the Ex-Im Bank’s mission is directed 

at facilitating exports that support U.S. jobs, and it has never been directed to balance the interests of U.S. exporters against the interests of some airlines like Delta 

Air Lines. If Delta were truly interested in supporting U.S. workers, it would argue 

that the Bank’s rules be changed so that it could be permitted to assist U.S. airlines 

in the purchase of domestically produced aircraft. Sadly, while Delta recently took 

advantage of Ex-Im Bank financing to win a contract to perform heavy engine maintenance for a Brazilian airline, it seems that Delta is more interested in destroying 

one of the U.S. Government’s most effective tools for spurring export growth and 

creating American jobs by seeking to insert language in the Ex-Im Bank reauthorization to specifically eliminate financing for widebody aircraft. 

Additionally, it is disingenuous to claim to support a robust manufacturing industry and at the same time press for legislation that would undermine the Bank’s ability to simply provide loan guarantees for the sale of U.S. manufactured aircraft. If 

the Bank is hindered, or prevented from supporting the export of aircraft made by 

U.S. workers, then U.S. workers, the communities where they live, and our Nation’s 

economy will lose—and lose big. Valuable jobs will be lost as foreign airlines purchase aircraft made from global competitors whose governments’ willingly provide 

financing. If, for example, Air India is prevented from utilizing Ex-Im Bank financing for the purchase of Boeing widebody aircraft, then they have only one other company to purchase aircraft from, Boeing’s European competitor, Airbus. Consequently, Air India would still be flying the same routes—only with European produced wide body aircraft produced by European workers. 

According to the U.S. Chamber of Commerce, small businesses make up 87 percent of Ex-Im Bank transactions. While much attention is focused on large corporations, supply chains stretch across the entire United States and the Ex-Im Bank’s 

financing affects firms of all sizes. If the Ex-Im Bank is prevented from supporting 

U.S. manufacturers, thousands of additional American jobs will be lost as U.S. companies ship more production work abroad where they can take advantage of the financing provided by other countries’ export credit agencies-financing that they 

would have preferred to obtain from the Ex-Im Bank. 

We must also be clear that our global competitors will not eliminate export credit 

financing. For the United States to do so in the brutal world of the global marketplace would be tantamount to unilateral disarmament. Without Ex-Im Bank financing the U.S. aerospace industry will be at a severe disadvantage, while European 

competitors will be free to support their companies through their comprehensive industrial policies. Last, as China’s export credit agency grows dramatically, why 

would we want to eliminate the only tool the United States has to effectively compete with China, particularly as China rushes to develop its commercial aerospace 

sector? 

Similarly, attempts to weaken the Ex-Im Bank’s domestic content requirements 

are dangerous and misguided. Greater domestic content means that a greater percentage of the product for export is made here in the United States by American 

workers. If anything, the Ex-Im Bank’s domestic content requirement should be 

strengthened. Multinational corporations that seek to lower domestic content requirements are the same corporations that have shifted thousands of production 

jobs outside of the United States. 

If adopted, the current House language on domestic content would increase the 

likelihood of weakening domestic content guidelines. It mandates that the Ex-Im 
35 

Bank adopt guidelines relying on factors that would skew the outcome toward lowering domestic content. This is real corporate welfare and the American people will 

not stand for it. Under the House version, the Ex-Im Bank would review its content 

guidelines every 2 years, which would mean that every 2 years we will have to battle attacks on domestic content just to maintain the current standards. 

The Senate bill does not contain any of these provisions. Specifically, it does not 

require the Bank to develop guidelines based on factors which lean heavily toward 

lowering domestic content, nor does it require that the Bank conduct a review of 

its domestic content requirements every 2 years. 

America’s global competitors know that exports, and, particularly aerospace exports, are vital to a strong economy and have repeatedly demonstrated a resolve to 

provide all necessary means of support to enhance export growth. Now is not the 

time for America to unilaterally disarm and surrender one of our last remaining engines of export growth, the aerospace industry. We strongly oppose any attempt to 

weaken domestic content requirements. The Ex-Im Bank needs to be fully reauthorized for 4 years and its lending cap significantly increased. We know firsthand from 

working with our employers that a short-term authorization will add uncertainty to 

business plans and forestall any possible expansion and employment growth. 

Finally, it is clear that both labor and business support the reauthorization of the 

Ex-Im Bank. As America’s working families struggle in today’s difficult economy, 

they have little patience for Beltway politics that continue to stall a proven instrument of export growth and job creation like the Ex-Im Bank. I strongly urge this 

Committee and the full Senate to act as quickly as possible to enact pending legislation to fully reauthorize the Ex-Im Bank and expand its lending cap. 

I thank the Committee for this opportunity to testify and look forward to your 

questions. 
36 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Statement 

of the 

Coalition for ElT\Illoymentthrou,h Exports 

before the 

Senate Corrunittee on Bankint HOUl'fIi and Urban Affairs 

Hurin, on the Rnuthorization of the U.S. ExporHmportBank 

April, H, 2012 

The Coalition for Employnwnt throu,h Exports(CEE) is plusedlo submit a rtall!ment insupportof 

S.lS47lnd the Ruuthoriuton of the Export-Import Bank (bHm Bank). 

We would ~e to brini tothe attentiM of the $eMle Bankin, Corrunittee that because of the manner in 

whkh the dobal econornyhas evolved since the financ ial cr ~of 200Hl9,webelievethere will be 

conMued incrused demand for U.S. manufMMed ,oeds over the ne>;tsever.1 yurs. A reaifthoriled 

Ex-1m &.Ink with suffkientcap spMe to aHow forvowth will becritkil to meetth ~ increased demand 

for U.S ,oedSlnd se rvices. 

We be lieve that three independent elements underlie the incrused demand experienced by the Ex-1m 

Bank in the last severalyursand will shape anticipall!d demand in the nutfewvears. 

First. demand for Bank support is ofttn countercyclical, risin, at times when the commercill banks, for 

whall!ver ru§On,lre retrenchifli. 

Second, demand for Ex'im Bank financ in, will rist when ,Iobal projHI and exportM~vity is outstrippin, 

the ab ility of commercill Banks to provide cort\jletitive Anlnc in" particularly in the fMe of exportcredit 

financine wh ich supports forei," compe~lor5 of U.S. companies, especiaHy in the contul of medium 

and lon,termtrans.actions In theemer&in,markets. 

A third element impMtin, demand on.llrowth forb:-lm's financ in, support is the Bank's incrUSfd 

outreac:hto small businesses wh ich find their marketsvavita~ni overseas or which hIVe beennewiy 

expoSfd 10 the increl$ed demand for their ,oeds from outside the U.s. 

Since the financial crisis and for the nextseveralyurs, the incruseddemandfor Ex-1m Bank financ ;n, is 

and wi ll bethe consequence of. "perfect storm" in which eMhofthe three elements hilS Ind will 

continue to contributt to Si,nificant incrUSfddemand. The resultovertheplst severalvurs has been 

I larce increase in U.s. exports, particularlyln manufMtured ,oeds, In increase that we antic ipate will 

list un~1 the middle of the deca.de , if nol tonier. 
37 

The fin~ncial crisisof 2007·9 genmted an increased level of Ex'lm Bank iKtivity as the Bank responded 

to significant relrenchmentbythe private b~nking community. The crisis was both about liquidity and 

risk, and in siinificant ways the commercial banks have yet to recover. The commercial banks have hMi 

to recalibratetheirrisk exp05llre,absorbthe requirementsof Base lltl and reiKtto the Eurolone crisis 

which hiS sidelined almost all of the Europun b~nks but those of Germany. The French banks, which 

historically have been auressive in the exportfinance arena, have been severely impiKted by the 

European debt they have taken on as that crisis hiS evolved, sharply )imitine their ability to provide new 

liquidity to export finance. In liKl, every European ECA is currentlyeniaged in developing new 

structures to compensate for the o~ of liquidity. so that their exportm are nolconstrained is new 

opportunities present themselves. 

Since the finanCial criSiS. the enline ofllobal irowth has shifted away from the U.S. and Europe to the 

emergine markets - especially the region~1 powerhousesofChina, India and Brazil. With the grol'lth 

demands of these and many other emerging markets so gre~t. and the cost of capital so low. the 

number of major projects in oil and ias. powereeneration. natural resources, infrastructure and 

petrochemicals is increasini dramatically. 

GE has recently assessed prOject demand outside of the aircrdt sector, both those in the urly staiCS of 

implementation and projectedilobal demand for 2014.Their summary il'aphs areattiKhed, and eiKh 

reflects a need for siinificant and sustained incruses in export credit financing. 

wrth reiardto small business, the Ex·lm Bank under Chairman Hochberfsleadershiphasdemonstrated 

the Bank's ab ility 10 rCiKh out and assist small businmesas they eneaie in export markets. The 

importance of 511\511 businesses to the Bank is only going to continue to il'0w. 

so lon, is the Ruuthoriution enablesEx·lm Bank to respond and support that antiCipated demand, the 

export opportunities of the next few years will augur very well for U.S. firms, and for the thousands of 

U.S. ;obs that will be supported bv those exports. 

Thank you for the opportunity to submit a statement to the Commltee. 
38 

TEST[\fO~-Y Of BE.\" ~T 

~lOR ncr PRBIDD, ,"-'1) GE.'1:R.ll CO(j~"SEL 

DELTAAlRLI'1:S 

BEfORE lHI S£'\"_UI CmL\IITTE.E 0:-; B,\.\ID'C, HOu"SX:-;C, & URB.\.\" _\fT,URS 

APRn.17, 20l: 

I:'I."TRODUCTIO:\' 

Chairman Johmon and Ranlcillg Mffilbtr Shelby, 011 behalf of Della Air l ines I than!: you for 

the oppotrunity to prodde testimony on the propo">ed reauthoriza tion of the E)tport-!mport 

Ban!: of the United Slates. Delta and our ffilployees are grateful that the Comminee is taking 

lbe time to et'aluate the role oftbe E.-.:port-Import Ban!: in today ~ U_S. economy. We btlie\'e 

lhat Congre~s can reauthorize the Bani.; to mee t the n~d~ of U.S. exporters while at the .\.ame 

time en~uring that the Bank reJKts coww.itwent~ to foreign airlines where the harm to U.S. 

airlines and their employ~s outweighs any domestic btouefit. 

IHlta ffilploys OHi' 70,000 ~le worldwide and offen ~et"\ice to more than 160 w.illion 

pn">engers each year to 341 destinations in 61 countries on 5i:"> continents. As a direct 

competitor oftbe foreign airlines that receh-e billions of <IoUan. offmancial support annually 

from the Bank - rmancial ~uppo, t that cnnsume.s roughly half of tbe Bank's an.ilable 

resources - IHlla has an interest in a reauthorization thal tape!$ the Bank's interference in the 

intemationalairline market. 

THE CO:\'CE:\,TR.-\.TIO:\, or EXPORT-DIPORT BA:\'!\: SUPPORT 

As membtrs of today '5 panel han told you, the E:,,>port-Import Bank proYides \'aluable 

support to small busines~ . According 10 i~ ]011 Annual Repol1, the Bani.; authoriud 

approximately i6 billion in financwg and in~w-ance for AmericaD small bm.inesses, or IS.4% 

of its total authorizations for that fi~cal year, and has a goal of reaching S30 billion in total 

authollzatiOlls for small busmess.es by ]015. Occa oll3l1y , the Bank also p!"o,ides indiJKt 

support for subsidiaties of larger American companies, like Boeing Satellite Sy~tews Inc. aDd 

IHlla echOp~_ Although a rKenl Washingtoll Po~t editorial ~ritidzed most ofth~ 

justifICations for the continued e)ti~ t~nc~ fth~ Export_Import Bani.:, the one that il fOllDd 

compelling was the Dud for b~ United ta te ~ to offtr its exporltf$ support that is comp'arab!~ 

to the ,\UppOrl that othtr govemment\ prot-ide through their own expol1 credil agencies.lt] 

IHlta applauds the Export-Import Ban); for ed:ing to grow ils \upporl for smal1 bnsine\~es ill 

tbe face of worldwide go\"enuueDt subsidies. 

BUI tbe Bank's suppoz1 for !>mall busintl&es i~ not the whole StOI)" - in fact, it ~ a relati\'ely 

small pal1 oftbe pictw'e. The Bank's I~'e l annual report re\"ea ~ Iha t, o\'er Ihe past fit'e yean, 

the Bank's alllhorizalio ~ for slll3ll businesses ha,'~ ac tllaUy shtunk relalin to its o\-nall 

thoriutiOll~.P] 

tl] Editorial.lmpo~~ e 01'e7 the Ex-Jm, WAS:m;CTON POST, April S, 20 12_ 

tll Elport-Import Ban); oflhe United Sta les, ]011 Annual Report. 
39 

bhibi, 2: Small-businflss Au,h l~ti ons 

= 

! -, • ,,-

,-

....... " .' ~ ". ". . .. = . 1»111 1~llO.l ,,- 1s.tSl.! 16.OI1.! 

....... _ . 111.169 .• I ... ..., !lUll.! 1l<.<61J 111.111.1 

':='1:.~ . ,. ,,~ ". .- ~ 

In CQ1lrra~ t. the Bani.: pia)'!. a much larger- and growing - role in the realm of aircraft 

finance. Its commilments to !.uppon the !.ale of Boeing rurcraft to foreign airlUle5 !u., grown 

alongside the Bank· s total authorizations. From FY2007 to FY20 II. the Bank increased its 

authorizations for Boeing rurcraft frOUI $4.5 billion TO o\·er $11 .6 billion. which is nearly twice 

a~ much as il authorized for slllall busine5~s. Of its out~landmg authorizations. nearly 50% 

are dechcated to the fm.mcing of air tra\lsponation. In light ofthe5e numbe~. it is Inlle wonder 

t!u.t the Congressional Research Smlce has re<:ently referred to the Balik as '·Boemg·s 

Bank.·~ll Even the BanI.:·s O\\n Vice Presuient ofTransponallOn ha~ publicly cautioned IhaT 

··,1"5 not healthy III the long telIll for export credn agtncles to be doing &0 much·· rurcraft 

financing.!') If the Bank wants to increase the amount,I!u.s a\~ibbie to dedtcate 10 more 

healthy mdea\·OfS. such as Its suppon for small busmesses. II can and should reduce lhe lens of 

billion~ of dollars of aid il pro\ides each year to for~gn airillX's. 

THE HAR\ I TO U.S. _-URL['I,"!S A:"\1) THEIR D IPLOY:EES 

The Bank·s outsized role in fmancing foreign rurlines causes hMm to u .S. airlines like Delta. 

who co~te WiTh the Bank·s bendicianes for inlenutional tr.ll·elrn. As the Bank 

acknowledges. it prolides fmancing 10 son~ foreign cOUlparnes - including so~ foreign 

31Ilines - that are unable 10 obtain financmg on Ihe prl\~te market. W,thoul thaI fll\ancing. 

these airiUles could ,lOt afford new BoelIlg planes to cO~Ie wilh U.S. airlines. Other foreign 

alIlin~s. weh as Emir-lies. couid fllld pril~le financlIIg. But for thost airlin~s tM Bank·s 

support prOI·ldeS further vantlg~ - such as access to what Ihe Bank 10Ul$ as tiS ··creatil"e 

!') Congres~onal Research Smic~. Expon·InlpOlt Bank: BackgroUlld and L~gislati\"~ Issues. 

Feb. 9, 2011. 

!'l Joseph C. Anselmo. Ex-1m OffiCial Em·isioltJ Smaller Role in .~i craft FinO/ICing, AVI.·mO~ 

DAILY aT ). Mar. 22. 2012. 
40 

and innoratin' approach to f!llancing" ~l that tnablt foreign airlines to compete with u.s. auiin~ using c~t structur~ unattaulable by on-subsi~ U,S. airlines. 

And foreign airlines hemly rely on that support. While u.S. airlines are hamstrung by lugh 

capital costs for long-rangt aircraft, fortign airlines u,e the Bank to expand their fleet. with 

linle or no mscipline from the capital marht •. The predIctable result, as shO\m in tht 

following table, IS the Bank's fortign beneficiarits hm much newer fleets, whilt U.S. carriers 

are forced to use older aircraft (by $Quetzing additional mts intO thnn and retrofining their 

interiors). 

Dimu l: A'<T:llC Fhl AlI« (V C':IfI) 

~'H Ib ,~ 

14 r- --!t" 1 12 lU3 

'" 10 

8 I- - - I-

, 

, 

l- . I- ~ 

:E 1 l- I- ~ c,.. - - c,.. - .f / '" l' i ,i' .' . " " ;' .l \i t If ,f <1 l ~ -

The relati\"t youth of fortign carriers' fleets - facilitated by the Bank's titlow-market 

financing - g!ves those carriers sigruficant operating and competuil'e ad ... a11lages om u.s. carriers. New planes hm low maintenance costs for their fil>t se\'en or eight years, while 

they are stIli MOO manufacturers' warranties, New planes are also much more £utl·efflclent 

than older ones, which is important because fuel cost> represent the single largest expense for 

alflines (dose to one·third of estunated costs in the first half of2011). 

In the face of Slfep capilal costs, u.s. airlines hm been de<apitahzing thelf fleets and buylllg 

ftwer auplanes. while fortign carriers - \\ith the Banb support - are buying an lllcreasing 

numbtr of new aircraft. The foUowing chart illustrates tht problnn and shows that, by 2015, 

fortlgn carriers WIll hm nearly 700 more ntt additions of widebody aircraft to their fleet than 

u.s. camers. 
41 

'6Ol 

,,,. 

,,,. 

,.., 

"" "" ". 

1m 

, 

Diagram: Wi<kbOO)' Airmft Ddilcri~ 

(U ,S VSf'Y< !'wig" Qloje n<) 

2001-1010 ;!01I,lOIS 

1.u.:.:..1cd) 

." 

• f.,.. .. o. 

This pb idiud COUlpttition Wt\,tably orct~ U,S, airlintl. 10 ttdllu internatioual flights and, 

along \Iith thnu. U,S, airline jobs, Perhap$ The most Telling example OfThi$ pa"ern is Delta's 

e:qletience with iTS New York-Mumbai rOUTe in Ihe face of the Bank's upponto Air lndia, 

In Noyembtt 2006, Delta initialed ~'ice ~Tween John F, Kennedy Aitpor1 in New York and 

Mumbai with one daily nonstop flight using a Boeing 777. ThaI nonstop flight gare Delia a 

competitive adrautage: customers prefer nonstop flights, bu!, IUllike Delta. Air India could not 

afford long-range. wldebody aircraft that could fly from Mwnbai to New York without 

Stopping to refuel. At lhattinte, tbe an-rage fart 00 the !'it\\' York-~1\1lllbai roule was $1 ,200, 

Between 2006 (when Della ~gan smice to lndia) and 2009, the Bank ga\'e Air lndia ol'er 

S3 billion in loan guarantees for the pllfChase of Boeing aircraft, Air India used those 

gnaralll~S to s=u-e ~low-market fwanting for the purcha'>t of long-range Boeing 777s, 

which Air India thtn used 10 ilart ll00stop ~ice btrw~n Mumbai aud JFK - in direct, 

head-to-head competition Ilith Delia, Della had no choice but to exit the market: after tickel 

prices dropped to $800, Delta flew its last nonstop flight from New York to Mumbai in 

Octobtt 2008, That rOUle r~esellled approximately 64 pilot jobs. 165 flight anendant jobs. 

and olber airline jobs, 

Delta '$ eltpttlence with iTS New York-~umbai route is oot an isolaTed even!. A recellt 

economic smdy spon'>Ol'ed by Airlines for America, which repre'>tllls U.s. airlintl., estimated 

thaI similar Bank-backed foreign airline xpan~ion has led 10 the loss of up to 7500 airline 

jobs, And that estimate does 1I0t lake imo accolUlt Ihe broader effC'1:t that airline jobs ha\'e on 

emplO)lltent in general: according to the Federal A,;atioo Administration, ever)' 100 airline 

jobs ~nppofl r.ome 360 jobs outside of the airline indll~try , Yet the Bank pays absolutely no 

anentioo 10 these am'me effect5 prior to appfolillg fmaocial guarantees for foreign rurlini!"S, 

PREVIOUS CO~GRESS O~Al MA1\'DATIS 

Congre:>s has pre,iously recognized the potential for harm lhatthe Bank'" cODlmitments 

cause, In 1986, this Committee te\'ie\\,td a 1983 Bank guarantee to wppon Singapore 
42 

Airlines' purchase of Boeing 747 aircraft, As the Committee explained, "A U.S. competitor of 

Singapore Airlines, Pan American Airways, fell that it was adve-rsely impacted by this ~upport, 

ytt it wa~ not con~ulted by Eximbatlk, and the {Bank's1 Board ga\'e only cursory attention to 

(thel stannory considtl'ation" of the "potential ad\'effie impact that any Eximbank loan or 

financial guarantet is likely to ha\'e on domestic ind""trie~ or enlployment."(6) The Conuuinet 

responded by appro\'ing language in the 1986 Reauthorization Bill to ~tr ngth nl1 the 

direc tive to the Balik to consider the views of don~ tic parties who may be substantially 

ad\'e-rsely affected by the Eximbank loan or guarantee-," 

Congress has dirwed the Bank to consider the ad\'rne domestic impact of its loan~ or 

financial guarantets on U,S, indusuy and ernployment-bdore appro\lng them-in at least 

1M" ~eparate pt'O\lsions: of the Ballk ' $ statutory charttl'. Section 635(b)(I)(B) requires the 

Balik's Board of Directors "in authorizing any loan or guarantee-" to "take into acco\Ult any 

serious acf,;erse effect of such loan or guarantee- on the contpetiti,'e position of United States 

illdu!ouy ", and emplO)lllent in the United States," Section 635a-2 requires the Bank to 

"insure that full consideraTion i~ gi\'tllTO the eXTent to which any loan or financial guarantee is 

likely TO hare all ad\'er~ effect on industries , and emplo~lll nl in the UniTed StaTes, either 

by reducing demand for goods produced U\ the United States or by increasing Imports to the 

United States," And Swion 635(e)(I) specifically prohibits the Bank from pro\lding loans or 

financial guarantee-s for establiWiing or expanding tbe production of any conuuodity for e:qKIrt 

by another COWIlr)' if "the extension of such credit or guarantee will cause sulY..tantial injury to 

United States producers of the same, similar, or compeTing cOllllllodity," 

THI BA1"iK'S ATIITtiDE TOWARDS ECOl'iO:'lliC Ii\IPACT 

Despite Congrm 's clear directi\'es, the Bank conducts no economic impact anal s 

whatsoever for aircraft financing tran~ction , Its record in other industries is hardly better, 

According to a 2007 Go\'e rnn~nt Accolullability Office (GAO) report entitled "Improvements 

Needed In s~ssment of Economic Impact," the Balik from 2003 to 2005 failed to conduct 

any e-conomic impaCT analysis whatSOC'\'t1' for 8.383 of the- 9,154 applications it rece-i,'ed (or 

ne-Mly 92% of all applicaTions recei\'ed). Of The remainder, the- Bank only conducte-d a full 

economic impact analysis for 20 oftho~ application~ (or 0.2% of all application~ recein d), 

How has the- Balik C".'aded acco\Ultabiliry for this complete- failure- to comply with itS mandatefrom Congress? It operates in a shroud of secrecy, Other than the 0.2% of tran ctioll s thaI 

recei\'e a full economic inlpact analysis, the Bank operates behind dosed doors, prO\lding the 

public "'ith only 48 hours ad\'ance notice- before \'oting on tranY.CtiOIlS in proce-edings tbatin the- case of aircraft trany.cTions-afC' e-ntire-ly c1oSC'd TO the pUblic, Further, for aircraft 

tran~clions (transactions That, to rc-peal. make up half of The Batik's portfolio), the Bank's 

public pre-appronillotice- only identifies tbe- name- of the- airline- 10 be subsidiud, The notice 

dots nOI identify the type or munbC'f of aircraft or tbe runo\Ult of the loan guarantee or other 

financing terms, By contrast, when Emirates acquired Ihre-e Boeing 777·300 Extended Range 

aircraft in 2009 with Ex-1m support, the airline lf iss ued a press relea~ idenTifying the- type 

and nwnber of aircraft, the- amOWll of the Ex-lm guaranlee- ($413.7 million), and the Tenn of 

the loan (12 years). 
43 

Dtlta, along with two tradt as!.OCiations thaI r~~~t U.S. airl~$ and tMir pilol$, recffitly 

s~ Ih ~ BiIIIk for it. faill1f~ to conduct an economic UnpaCi analy~i~ ~for~ authorizing $3.4 

billion in loan guarantets for Air India 10 pw-chase 30 BOOng aircraft - including 21 stat~-ofth~-aft Dr~an~iner aircraft. Thatlitigalion is ongoing. In court, tM BiIIIk has tak~n th~ 

position thaI it dots nOI ha,'~ to an!;wer to anyone-uol th~ public, not the courts, and not 

Cougres;----becaus~ il must ha,'~ Ih~ fr~edom 10 act like a commercial bank. But Ih~ bpoftInIpOft Bank is not a commercial bank. It is an agffiCY ofth~ U.S. gO"munent, mpowered to 

plMg~ th~ full faith and crMit ofth~ U.S. Trmnry only after il has compli~d with th~ various 

staunory obligalions imposed by Congrm. Now that th~ GAO har; brought 10 light the Bank's 

failure to acknowledge ils ecououuC-impaCI obligations. it is more ,ita! than ~\"eJ that 

Congress r~quir~ Ihe Bank to conform its practices to the linuts Congress imposed on it more 

than twenty-fi,'e years ago. Indt~d, the Bank has already argued in federal court thaI Congress 

has ocqlliesceO in Ihe Bank's disregard oflhose statutory limits. $0 that it no longer manm 

what Congres; actually told the Bank 10 do in its charter. 

OL1 TIO~S 

Dtlta IUldtmand~ Ih~ dtsir~ 10 rt3ulhorize Ih~ Bank and xpand its authorization limit for the 

benefit of American small busmesses. The fastest and surest way to ["tach that goal IS to 

includt refomls that address the transparfficy and ach'erse-effect sbortcomings I ha,'e outlined 

today. In addition, any reauthorization must address the underlying "e"eJ}'one else does it'" 

problem lhat justifies the Bank's e:Ustffice. Delta, along with the Airline Pilot. Association 

and the Al!ied Pilots As!.OCiation, has been working wjth Congressionalleadm to include 

prO\isions in the Bank's reauthorization that would addrm these problems. In particular, 

Dtlta supports legislation that would rtquir~ reasonable ach'anc~ notice ~for~ the Bank "otes 

to apprO"e loug raug~ aircraft transactions - including notice of basic infotmation about the 

transaction and its potential impact on U.s. airlines and their emploYffl - so that Ihe public 

has a legitimate oppornmity to weigh in on the hamlful effects of the Bank's conunitments. 

Any reauthorization should al!.O make ab!.Ollllely clear that the Bank's economic impact 

obligalions apply to aircraft transactions. And finally, Dtlra supports a reqniremffit that Ihe 

United Stales negotiate an end 10 go,'munffit-subsidized long-range alfCraft purchases, m 

order to ~Iop the ine,itable sub~idy-~gening practices cuated by the worldwide pr~ence of 

expon crMit agenci~s. 

Oi\"CLUSIO~ 

Again, thank you for the opportunity to te~tif)' ~fore the Conuninee on these ,ital ssue~. In 

dosing. I would like 10 draw from Presidenl Obama's 2012 State of the Union s]Jfflh, m 

which he stated. "If the playing field is len!, I promist you - America will always wm." The 

reforms we support will lml the plaYlllg field for U.S. mdustr), aud employets. 

Thank you for allowing us 10 submit the COllll1lffits. 
44 

ameri",," app"mi & 

foot\\cal' associalion 

,be' ational 

~otton 

Louncilliil 

OF AM E RICA 

'!\j' '!l1! ",i.,.llI,,,,"1I 

CTO ''''''''1311 Iiii 

inl SIUtmrnt Submitltd by 

Amtriull Appu fl & Foo!\\,ur -\ odari D {olAf A) 

;\31;01131 Collon CGundl r.;CC) 

;oiationaJ Counti] ofTutilr Organiurion1 CiCIO) 

Bdon fhr 

Stnalf Banking, HOllsing and Urban AfJain COlDlDimf 

0, 

ExJWrl-!mporl Bank Ru urhoriution: Saling .-\mrri(an J obs and Supporting .-\mt l;t3n 

bportfl"l 

April 17, 2m 

Thw.: you for proli diog ~ abcl"e OIgaaiza iOD~ tM oppottuWty 10 ubmil tfStimcoy legardiDg «>day's 

MUUlg, '"E'l:JIOII.Import Bani: RuutbonzatiOD: Sa\"io,!! Amftican lobs and Suppoltio,!! Amfticm 

E:l:pomn." Our Of,!!aDlZ31L01lS IlOD!Iy ~Lie'\"f WI today"s hu ring will belp M=ben OfCOO!IUS, ~ 

bu~ss community at.large, and tlUnI.: laW.: org3!l1lahOllS bfn«uocltrstaod how tbr Expon_Import 

Bank (Ex-1m Bam:) can SH".e!5 In imporunt V::porIlool for U.S. COmpllllfS in a globally CO.';III-. 

mllronmmt wbile al the u me time creating U.S. jo~. 

Tht b:-Im Bank could and mould pili)' a crihcal role III supportingandupanding U.S.Job\ in the U.S. 

textile iDdusny;wd, in IWIl. ancbor I 1JOllg We !mI emi pbere t~tile and appuel supply duill. 

Regrelt3bly,!ht b:·lm Bank ha~ failed to fulfil l this role be<:aul.e !be mucrure ofb:·Im Baul: (!he 

Bank) oaD.~ and !U3I1I!lt«l. do nol ,el1KI tither the ~aLities. of the ;tppOll el alld textile supply chain, U.S. 

tlade policy, CI tod.1y" s global supply chains in general. 

AI you ].:nQW The Bank il operating. I,I1IdtJ I shot! 1ff1l\ I Ulhoriuli()ll thaI il IO e:qnre OIl May 31. 

2012. What U WQle cC1lCfnling. il that tbt Bmk t xpt(1S to It3(h ~ funding c3p WIMlime thil month. 
45 

Congresslollll m-acrion I~ C~U\Ulg OIIJ U.s. uponm 10 fall bthind foreign c~llon al a hme when 

lhe u.s. «onom}" IS txpmencing gIimmm of r«OW1)". Wt wm encouragtd when Senatt h1ajoril)" 

lndn" Reid filtd Amendment #1836. the Ex-1m Reauthorization. to the JUIIlp5lm Our BUSllte$\e5 Act 

the wttk of Much 11th. This Amnldmmt filtd by Smalor> CananU (D.WA). 10hnr.on (D.SO). 

GnbJm (R·Se). and Shelby (R·AL) would hal·e reauthoriztd the Bauk and i~ pl"ogrnm for fOllJ-yem 

and increa>td tilt Bauk· s funding capabilihes to S 140 billion. In addition. the amendmt-nt containtd 

iU1pOrtant languagt thaI would allow tht Bauk to btntt support 1M ttXIilt and app;u:el global supply 

chain. 

The Senate language in S«tion 7 of tilt Ex-1m Reauthorizallon bill adds representation for 1M textile 

mdusuyon the Bauk·s Am:i>Of)' Commintt. Ths role wil! allow for the industry 10 pl"011M 

suggestions to the Balik· s Board and Presl0011 on how Bank: policies and prodUCTS ue aff«tiog the 

ttxtilt and appartl global ,upply cbain. AddiliolllUy, the rtaothorizallOn rtquires the Bank 10 rtporT to 

Congress on an annuallmis on the Bank"s effort~ 10 proriM fmanctng to the U.S. textile and appuel 

global supply chain We btlit\·e tbat till! language will take important steps in <lmsting me Bank in 

btntt understmding how the textile and appuel ~upply cbain Jw. changed ortt time and continues 10 bt 

an imponanl ffiglne oflM U.S. «onomy. The following stC1tOnl of our wrinffi rem;u:h outline the 

justification and need for inclusion of Ihis language. 

Atthedlmtion of U.S, tnM policy. the te;r;tile and ~pparel supply cbain ~ M\'e!optd ac ~s the 

Western Hemisphtte and bas t\-olrtd into a murually beneficial relationlhip for both U.S. oonoo 

growm and u.s. texlile nuuubcrwm as well il'> U.S. a))lmel impol1m. The Frtt TrlM Agreemeu~ 

and prefttence program artas in this Hemisphm for the mosl part grant duty.fm access to the U.S. 

market for apparel as>embled m the region as loog as the <lppMei IS made. eithtt enurely or in pm, from 

U.S.-groml conoo and U.S .• made)'a/ll and faOOc. As a result, all pmie, in the supply cbaio bmefil -

from U.S. conoo growm. U.S. ram and fabric manufacrurm, to app;u:el manufacrurm Ul 1M regioo 

and ultUDltely 1M U.S. appuel brands and relailm. All part\es art positiooed 10 reap the benefits of 

u.s. traM pohcy. Howertf, the supply cham is misling !htn«essary ingrediffil -uliabJe supply cham 

financing. 

?nor to thisreaumoriz.auon. 1M Ex·1m Bank did rery linle 1(1 support supply cbain ftnancing, which. in 

rum, bas bad Ihe practical eff«1 of suffocatiog domestic Capital Ull"tstment and job crtalion 

Traditionally. tilt Bank bas only coosidered the creditworthiness of 1M pl"iXluctfr«eillng U.s. !exule 

industry exports and has failed to acknowledge that thest compouen~. OIlCt txported to central and 

South Amttica. rerum 10 major U.S. brands and relailers as fllUilied goods. This polley has Imuted tilt 

financing oppommities at the Bank for the U.S. textile indultry. 

Ex-1m B:lllk ftnancing would facilitatt and grow the Western Henusphttt apparel and ttxtile supply 

chain by Increasmg the mcenhves for U,S. ~iU'el brands and rtta!im to mmast tlltir wurcmg from 

the rtgJon because such financing would makt access to the U.S. conoo and textiles o«esSiU')" to obtain 

the benefl~ undtt Ihe various fm trade agreements and pl"efttence pl"ograms eillier. fasttt and more 
46 

reliable. As a result, [,-!mBank financing would lead to increase txporn of U.S. conon, yam and 

faOOc to the region. Those Ulcrmed exports would suppoIT and grow U.S. j~. 

U.S. GomnUltnl- ou Should EIport to Iht &tgiOIl. but \\'f WOII'I Hdp You" 

The Ex-!mBank basts much of its financing demions on cOlllltty risk. In the case oithe W~tem 

Hemisphere appard and textile supply dmll, this "COlllltry LimiTation'- policy outrighT e1iminates the 

possibility of financing for .some cOllllmes and streetl}' restricts financing and/or significantly incrtaSes 

t~ interest rates for many OIhers that are UllegrallO this supply chain. 

As a rf'Sult, the U.S. gomnmmt strongly tllCOurages U.S. textile manufacturers to export their products 

to Ctntral America and the Dominican Republic through the incmtires it negotiated Through CAFTADR while at the same time saylllg that financing U.S. expom 10 half of the CAFTA-DR cowlIries is too 

high of a ri<J.: to promle anything but the most limlled loans and 10m guaranTees, at high interest rates to 

boot. For Haiti, a COIlll1l)' fhat the U.S. Congrm has dttmed a priorit}' through passage of the HOPE 

and HELP nn preference programs, tbe Ex-!mSank bas1cally says Ihe COlllltry is offlinurs. 

Improling Products 10 Stller PTO\ide "SupplY Chain fin ancing" 

Wllile the amollllf of paperwork and the timeline for approral remain major barriers prertnting any 

MUalJ business from utilizing Export-Import Bank programs, for the Western Hemisphere apparel and 

tatile supply chain we klie\-e thaTlhe hport-Import Bank mUST adaplto today's global supply chain. 

As in te~tiles and appareL the United States doe~ juSt expofl finaJ manufactured product> anymore. 

Exports ofU.S.-made goods today are just one part of a global supply chain. In our industry, U.s. 

exports of conoll, yam, or fabric , relUfllto the United States as finished apparel or home goods. The 

programs offered by the Export-Import Bank should rdIm the>t realillf'S. 

It is our belief that the legislatiH text as outlined would be a great first sttp towards bringing much 

netded liquidJ.ty to the We,Tern Hmulphere supply chain at a time whm nujorbrands and rttailers are 

considering shifting .sourcing oo.ck to this region of the world. 

Condulion 

Thank you agaw for holding a ~aring on fhi. important issut. We belie',e that a combination of 

changes Ul both E.tport-Import Bank po~cies and prOgraml \\ill position the bport-Import Bank to 

tru1y assist U.S. companies, particularly snull businesses, and the hwulred> of thousands ofU.S. 

\\'orkers they tmploy, lhatplay a critical role in today's global sUWly chains. We would be happy TO 

discuS) ally of t~ abo\"e points in more detail with the Conuninee. 
47 

DncI Ooat (703). 08-5616 

[lqd Flit (703) oIQI..3502 

e.u. jIIIIt:II~ COIII 

April 16, 2012 

The Honorable Tim Joonson 

Chairman, ~na e Banking Committee 

S34 Dirbon 

W;ashlngton,O.c. 20510 

Re: Reauthorization of the hport·lmport Bank 

Dear SeIlator John5Of'l: 

Thank you for allowing me the opportunity to provide Orbit;al SciencfS Corpor.llion's position on the 

reauthoriution of the E~porHmport Bank. Orbital Sciences Corporation is a Virginia based 

entrepreneurial aeroipaa! company that this April celebrates 30 Vtarsof pionl?ering work in the 

dMlopment and oper3tionsoflaunch vehicJes. sp;JCemft and satellit~ for a variety of 

commercial, civil space and national sec:urHy customers. 

Along with my position at Orbital as VI«! Olairman and Chief FinaflCial Officer, I am al~ a member 

of the CongressionlllyoestabNshed Advisory CommiUI?e 'Of the Export·lmport Bank. 

As we emerge from the recent recession brought on by the credit crisis, it is evident that the U.S. 

consumer will nO longer be the catalyst driving U.S. economic growth. The best path we can take to 

establish a growth trajectory that will be wffident to compensate for our significant current 

national debt and the future otIlit:ations of our tntitltment pro~ms Is to focus on growth throut;h 

U.S. eKports. The hport·lmport Bank is a vital 1001 to jump start and ;JCce4erate this export driven 

economic growth. 

The 5toryof Orbital Scimes Corporation Is illustrative of the power of the ExpolHmport Bank in 

wpporting tlte efforts of a small·siud aerosp;JCe company tllat markets its producu 10 commercial 

satellite customers around the globe. With itn employee base of 3,700.scientiSl5, englnem. 

technicians and wpport staff, Orbital maintainS a well·balanced product line - 38% of our $1.345 

billion revenues in 2011 arne from work forthe Department of Defense and Nation ~1 Intelligence 
48 

The Hooouble Tim Johnson 

Chairm)n, 5fn~ e Sanking CommittH 

Apr~ 16, 2012 

Page Two 

AsendH, lJ" Irom won. lor NASA. other cMl~n astndn arwl univtnilil'S, Mid M 1,0m 

commeldat <lnd inttrnatiOnal utellite Oil'tI)tl)l1. 

Olbltilrs commelclal1atellite businns experiences significant competition Irom Europnn 1atellite 

manullClulelS, such as EADS/Asllium and Thales/Alenia, Ihat are able 10 provide attrlCl!ve 

flnilnclng a~ernalives 10 the customelthlough the awelstve use 01 Cobce loan guarantees. 

In order to levtlthe playin, fttld to promote "owth 01 U.S. high t«hnolocy jobs, tht Export·tmport 

Sank prOVided dir\!i:1 loans or~n guarantees lor iii number 01 Orbitars1ateltlte projects. With the 

Export.fmport Blnk neutralilirll the advantast provided by CofiICt, Orbital was able to wcctssfulv 

wil"I Ihis business. for ~ (ommerdat 1attlllte that Otbital buikls, approxima tely 300 jobs ii1re 

supported throuBil direa.. indir«t and indu(fd U.S. jobs. 

for eX;lmpft, we were able to win the contr~ 10 build Ihe If'(LAS 2 teltcommuniciltions 1atellite lor 

Avantl (ommunlutiOns 01 London, exparwli"lAVlnt¥s Eistefn Eur09un (ovtra,t arwl p/Ovidins 

new covera,e in the Middle East ilnd Africa, thanks In part to a $215 million dirt(tloan Irom the 

Export·lmport bnk to Avantl. 

As I have noted, with ead! new communlutiOns u reilite Ihat we build, hund redsofU.5.·bastd 

1I l,lI·tech jobs are cleated Of s.ustained, 001 only at Orbital, bUI also at the numerous $upplitrsof 

$ubsynems Ih ~t art incorporated Inlo our stale-of·the-art 1atell~n. The ability of the Export· 

Import B.ank to level the playinS field with EurOil'tan romptt~ iOn arwl to provide financin, when the 

private sector Is unavailable is instromenlat in ~intain"" U.S. dominance in wmll\flcial spilCe 

technology jOd to support a vibranl and &rowin, hiCh technology workforce. 

I fully s.upport a four·yeilr reauthorization of lhe Export·lmport Blnk wilh lendin, ~uthoritv of $140 

billiOn that is c~rrently s.upported in the Sen~te. With an hlstolical to~n default r~t e oIaround 1.5'" 

the hpofl·lmport Bank is low riSk to Ihf U.S. IUp~. T~king into ilCcount thf f~ ct that thf Export· 

Import Bank h~s ~c ually returned over 5700 million to Ihe U.S. Treilsury in FY 2011 alone and 

$ypported thousands of U.S. jobs, I cannot see how any cast asainst the hport·lmport Blink hilS any 

merit. Whilt else (ould you lis!:: for from i JOVtfIIment lIgency1 1\ performs Its mission In 

support in, job (reation, covtrs liS expenses and ~ctuall v returns funds to the U.S. Trenury. 

For these and many other reasons I am proud tOendofSf the Itiluthorililion of the Export·lmport 

Blnk, \\tIich is an essential toot \0 facilitate Ihe eKpolt driven "OWIh of the U.S. economy. 
Global energy capital spend 

Energy Industry Spend 

$ 1.21 trillion 

Power 

2011 2014 

_OEE-w_ 

Key pOints 

• Total energy industry'" spend 

expected to grow by -4% C

from 2011 to 2014. 

• 2008 investment levels in th

energy sector were recovere

and exceeded by 2011 . 

__ 

. 

Global energy industry capital requirements continue to gr

. 1mOQofIOt,onDlWOfk OE 

r ..
Global mining capital spend 

Mining Industry Spend 

$150 Billion 

2010 2014 

_., 0. ,, __ 

'2f20" 

Key pOints 

• Total mining industry CAPEX 

spend expected to grow by 

-11 % CAGR from 2010 to 2

• Investments growth driven b

several factors including 

migration from mechanizatio

automation equipment, and 

equipment replacement cyc

Global mining industry capital requirements continue to gr

\8 omognollOnot_1c 

GE r_