(For other news from the Reuters Aerospace and Defense Summit,
click on www.reuters.com/summit/Aero14)
By Alwyn Scott and Tim Hepher
WASHINGTON, Sept 10 The U.S. Export-Import Bank
would provide financing for exports of Airbus Group
jetliners, provided they were assembled in the United States
with sufficient content from domestic suppliers, the bank's head
said on Wednesday.
"We're about U.S. jobs," Ex-Im Bank President Fred Hochberg
told the Reuters Aerospace and Defense Summit in Washington.
"We have no national treasures," Hochberg said, in a
reference to Airbus arch rival Boeing Co. "Every company
is a national treasure."
The bank, which supports loans for U.S. manufacturers
selling products to foreign companies, is at the center of a
bruising battle over whether Congress should renew its authority
to operate, which expires on Sept. 30.
About 46 percent of the bank's total financial exposure is
for jetliners made by Boeing, according to U.S. Government
Accountability Office figures.
Airbus is setting up a factory in Mobile, Alabama, to make
commercial jets, and is due to begin making deliveries in 2016.
While Airbus intends to sell the aircraft to U.S. airlines,
there would be no restriction against U.S. export credit support
for foreign airlines buying U.S.-manufactured Airbus planes,
"To the extent that the Airbus plane is actually made here,
we could support those exports that are made in the United
States," he said.
Airbus has said the U.S. supplies more than 40 percent of
its aircraft-related purchasing, including engines.
Hochberg said there were no minimum content requirements,
but that the Ex-Im bank looks closely at content and labor in
product before deciding on support.
He said export-credit agencies in other countries were often
surprised to learn the Ex-Im bank will support foreign companies
manufacturing in the United States, and does not pick companies
to support as "champions."
For example, the bank supplies export financing for the
customers of a Siemens AG gas-turbine factory in
North Carolina that competes with General Electric Co.
"We treat Siemens and GE as one and the same," he said. "We
have no preference for one over the other. Siemens employs
people in America (and) to the extent that the product is made
here we support it."
Boeing is among those lobbying to have the bank's charter
renewed, saying it essential to support U.S. jobs. Other groups,
including Delta Air Lines Inc and the Air Line Pilots
Association, say the U.S. Ex-Im bank should reform its policies
and stop offering low-cost credit to wealthy foreign airlines
buying widebody Boeing aircraft since they compete with U.S.
carriers on international routes, affecting jobs.
In the Reuters interview, Hochberg dismissed such a
compromise, saying the bank was at par with what others were
doing and eliminating it would tilt the balance against U.S.
exporters, threatening 205,000 jobs.
He noted that reliance on U.S. Ex-Im credit has declined
this year as financial markets improved, in part because foreign
airlines have access to other types of lending. Ex-Im loans to
mining and oil-and-gas companies also have dropped, he said.
Foreign airlines have increasingly used bonds known in the
U.S. as enhanced equipment trust certificates (EETCs) to finance
jet purchases. EETCs, which offer lower interest rates than the
Ex-Im bank now provides, give lenders the right to seize
aircraft quickly if a carrier goes bankrupt.
The EETC market is a bigger factor in lowering borrowing
costs for foreign airlines than the Ex-Im Bank, Hochberg said.
Also, "airlines are better able to tap into conventional
bank lending than they were a year or two years ago," he added.
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(Reporting by Alwyn Scott, Tim Hepher and Jeffrey Dastin;
Editing by Jonathan Oatis and Andre Grenon)