Loss of EX-IM Bank charter to disadvantage Boeing

The head of Boeing’s commercial aircraft division, Ray Conner, has indicated that the lack of available finance through the US Export-Import Bank would likely put the company at a “huge competitive disadvantage” as rival firms still had access to similar beneficial forms of financing. However he went on to say that Boeing was keen to reassure customers that Congress would renew the bank’s charter, but there is a certain degree of uncertainty surrounding this because the charter was allowed to lapse in the first place. Conner spoke at a ceremony which marked the delivery of the first Boeing 787 to Vietnam Airlines, a purchase made possible through using Ex-Im financing, saying “We absolutely need Ex-Im Bank to compete on a level playing field.”
Though not directly naming specific rivals (countries such as China, Germany and Japan), he made it clear “To not have that, we’re just tying one hand behind our back, as far as I’m concerned. The competition is not going to back away from that kind of financing.” Meanwhile those competitors are already getting mileage out of the situation by pointing out the uncertainty as to whether or not Boeing’s customers in the future will have access to such beneficial credit.
While seven conservative Republican senators demanded last week that the bank reveal any plans to commence liquidating its assets subsequent to the expiration of its charter during a period of inaction from Congress, Ex-Im Chairman Fred Hochberg disclosed to Reuters that the staff at the bank were assembling a liquidation plan and completing pre-approved transactions. However the consequences of the lapse of the charter means it is unable to work on any new transactions. Meanwhile Ex-Im has indicated it will remain open to service US$112bn in existing obligations. The operating budget of Ex-Im has been approved up to the 30th September, and currently both Democrats and moderate Republicans hope to see the bank fully operational again later this month through the attachment of charter renewal legislation to a “must-pass” funding for rail transit and highways bill.
Bruce Andrews, Deputy Secretary of Commerce, made it clear the Obama administration was concerned over of the bank’s charter lapse and was as positive as possible that the bank could be restarted soon, saying “By unilaterally disarming and shutting down the Export-Import Bank, it creates a market advantage for our competitors.”