EXIM's U.S. Supply Chain Financing Factors Significantly in Maintaining Viability of U.S. Aircraft Manufacturing Jobs in Wake of COVID-19
REDMOND, Washington - Export-Import Bank of the United States (EXIM) President and Chairman Kimberly A. Reed, Chief Banking Officer Steve Renna, and Chief of Staff Ryan McCormack completed a two-day visit to Washington state yesterday by focusing on the role of EXIM's U.S. supply chain financing guarantee program as part of the nation's economic recovery tools needed in the wake of COVID-19.
The EXIM team first visited Pacific Tool Inc., a small manufacturing business and Boeing supplier in Redmond, where they met with co-owners Lee Falck and Bobby Holt and employees and toured the shop floor. Founded in 1966, Pacific Tool manufactures over 25,000 specialized aerospace tools, including all Boeing standard tools, and provides industry-leading engineering and technical assistance. The company currently has 75 employees-down from 150-and has worked with every Boeing airplane program, starting with the 727 and subsequently the 737, 747, 757, 767, 777, and 787.
Photo 1: Great "Made in the USA" steel tools being manufactured for Boeing aircraft. L-R: Pacific Tool Inc. Co-Owner Lee Falck, EXIM Chairman Kimberly Reed, Dan Rahme of Pacific Tool Inc., and EXIM Chief Banking Officer Steve Renna; Photo 2: L-R: Renna, Reed, and Bun Tuy of Pacific Tool Inc. These specialized tools are for Gemcor and ElectroImpact fastening automation sold to Boeing and its suppliers worldwide.
"EXIM Bank is critical to our sales of Boeing specialized production tools to foreign companies. Not only the financing of new Boeing planes, but also the other critical financing programs that make us competitive in foreign markets," said Lee Falck.
The EXIM team then traveled to Everett to meet with Boeing's President and CEO for Commercial Airplanes Stanley A. Deal and Boeing Capital Corporation's (BCC) President Timothy R. Myers. BCC's primary mission is to support the other Boeing business units by ensuring that airlines and operating lessors have the financing they need to buy and take delivery of Boeing aircraft.
"EXIM recognizes the importance of our nation's supply chains-which are comprised of thousands of U.S. small businesses and the great American workers they employ. As we heard and saw at both Pacific Tool Inc. and The Boeing Company, small businesses like Pacific Tool, which is a part of Boeing's supply chain, play a big role in our nation's economic well-being," said Chairman Reed. "Particularly in light of the unprecedented impact COVID-19 has had on the availability of capital and global market conditions, EXIM stands ready to provide the support and financing needed to our nation's exporters of all sizes and their supply chains. U.S. companies must be able to navigate these challenging times so that 'Made in the USA' products and services can continue to be exported around the world."
Chief Banking Officer Renna added, "The ever-tightening credit markets are straining the ability of companies like Boeing to pay their suppliers. EXIM is stepping in to ensure that major manufacturers have access to the credit they need to keep the supply chain viable and intact."
The EXIM team then tour Boeing's Everett facility, which is the largest manufacturing building in the world. Thousands of aerospace employees in Everett support aircraft fabrication and production, product development, aviation safety and security and airplane certifications.
Photo 1 - L-R: EXIM's Chief Banking Officer Steve Renna, Chief of Staff Ryan McCormack, and Chairman Kimberly Reed with Boeing Capital Corp. President Tim Myers in front of a 747-8 Freighter; Photo 2 - L-R: Boeing President & CEO for Commercial Airplanes Stanley Deal, Renna, Reed, and Myers
In light of the lack of commercial financing available, EXIM recently notified Congress of a potential 90 percent guarantee of a $500 million facility under the agency's Supply Chain Finance Guarantee Program. The EXIM guarantee to Citibank would allow it to finance accounts receivable due from The Boeing Company to its U.S.-based suppliers for a term of 12 months. The potential authorization would support an EXIM-estimated 1,900 aviation-based jobs across the country, including California, Florida, Kansas, New York, Texas, and Washington. Boeing's approximately 1,000 eligible suppliers, about half of which are small businesses, also stand to benefit as the aircraft supply chain has been negatively impacted by the unprecedented COVID-19 pandemic.
Additionally, in July 2020, EXIM's Board of Directors unanimously approved a transaction, also under EXIM's Supply Chain Finance Guarantee Program, to guarantee 90 percent of a $510 million purchase facility for a term of one year for Credit Agricole Corporate and Investment Bank to purchase account receivable from CFM International, Inc. (CFMI)/General Electric Corporation (GE) that are due from The Boeing Company. The purchase facility would support an estimated $3 billion in export sales of aircraft engines and an estimated 1,700 total direct and indirect jobs throughout the U.S. supply chain, including jobs at CFMI/GE across Indiana, North Carolina, and Ohio. The transaction will facilitate increased liquidity for CFMI/GE and its suppliers during a time of heightened risk associated with the aircraft manufacturing industry resulting from the COVID-19 pandemic.
During the visit to Washington state, the EXIM team also met with and presented the EXIM 2020 Exporter of the Year award to The Software Revolution, Inc., a Kirkland-based small business that provides automated legacy software system modernization services. Chairman Reed also joined the Tacoma-Pierce County Chamber of Commerce, Manufacturing Industrial Council for the South Sound, and World Trade Center Tacoma in a webinar for Tacoma-area exporters to learn more about growing their business with international sales.
ABOUT EXIM:
EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit to support sales of U.S. goods and services to international buyers. A robust EXIM can level the global playing field for U.S. exporters when they compete against foreign companies that receive support from their governments. EXIM also contributes to U.S. economic growth by helping to create and sustain hundreds of thousands of jobs in exporting businesses and their supply chains across the United States. In recent years, approximately 90 percent of the total number of the agency's authorizations has directly supported small businesses. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt.
For more information about EXIM, please visit www.exim.gov.
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