|
 Yet even as bank officials showcase their work for the little guy,
they have also been focusing their energy on global satellite deals
geared towards space giants like Lockheed Martin and Spacex,
building that sector into the faster growing bit of Exim's
portfolio.
According to the bank, it has approved $4.8 billion in satellite
deals since 2002 – almost all of that in the last three years. That
has supported 5.5 in exports but only $36 million, less than 1
percent, has gone to companies the agency designated as small
businesses.
Lawmakers are due to decide by the month's end whether to renew the
bank's mandate and what used to be a low-key procedure has turned
into a tense political confrontation between the Democrat
administration and Republican Party conservatives.
Critics say the institution is a tool of "crony capitalism,"
funneling taxpayer money to big corporations that don't need it and
distorting markets.
"If people want to buy American satellites they should just buy
them, it shouldn't be the government encouraging them to do it,"
said Barney Keller, communications director at the conservative Club
for Growth.
Supporters, such as the U.S. Chamber of Commerce, have rallied to
portray the bank as a champion of Main Street, parading small
businesses that have benefited from Ex-Im deals like North
Carolina-based Miss Jenny's Pickles.
The bank that provides about $37 billion a year in loans, credit
insurance and guarantees, says about a fifth of its funding goes to
businesses it characterizes as small and that it plans to at least
maintain such level of support.
But while doing so may be its political trump card, the institution
has made it clear that growth opportunities and the biggest rewards
are elsewhere.
Satellite financing best exemplifies the bank's "damned if they do,
damned if they don't" dilemma.
Ex-Im Bank Chairman Fred Hochberg has singled out the sector as one
where U.S. firms have a clear competitive advantage, and where the
global appetite for communications bandwidth will keep demand
strong.
"As the U.S. satellite industry grows, our support is growing, too,"
Hochberg said in February.
But satellite deals are largely the province of a handful of firms
with the technological wherewithal to place objects in orbit - from
established giants like Space Systems/Loral to relative newcomers
like SpaceX, the launch vehicle company founded by tech billionaire
Elon Musk.
BIG LEAGUES
Those projects are not only capital intensive - not the sort to
easily bring in mom and pop operations - but often global in scope.
One of Ex-Im's signature projects of the past few years, for
example, is helping finance the planned launch by Australia's Newsat
<NWT.AX> of the Jabiru-1 satellite. Lockheed Martin is building the
satellite, but is sourcing the telecommunications hardware from
Europe's Airbus Defense & Space, a major rival.
Lockheed spokesman Matt Kramer said in an email that the satellite
project involves about 30 subcontractors from five countries, though
in general the "majority" of the content included in commercial
satellites is from U.S. sources.
[to top of second column] |
The satellite will be carried into orbit on a rocket supplied by
France's Arianespace, whose involvement is being financed by
France's equivalent of Ex-Im.
The bank has financed a billion dollars annually in satellite deals
for the past three years, accounting for about 15 percent of its
activity as of 2013.
According to Ex-Im records analyzed by Reuters, those deals have
involved five firms as primary exporters: Boeing, Lockheed Martin,
Orbital Sciences, SpaceX, and Space Systems/Loral (SSL), which says
half of its California-made communications satellites are exported.
Musk's SpaceX, for example, has been a prime contractor in Ex-Im
satellite deals in Bulgaria, Israel and Hong Kong that the bank has
financed to the tune of $500 million in financing at interest rates
as low as 2.37 percent.
Ex-Im officials defend its engagement with big firms saying it is
funding projects that may be too risky for private firms, boosting
exports and jobs. The bank also helps U.S. exporters compete with
foreign rivals such as China's Great Wall Industry Corporation,
Russia's JSC Information Satellite Systems and France's Thales SA
that enjoy government backing.
In all, a third of U.S. exports is made of capital goods typically
produced by large, sophisticated companies, making it hard for Ex-Im
to avoid deals with major exporters that rile its critics.
Some of the bank's small business funding in fact, is bundled under
contracts to big firms like Boeing <BA.N> and Caterpillar under a
"supply chain financing" program that allows Ex-Im to break out
support for smaller firms from projects that largely benefit major
corporations.
Ex-Im data indicate that as much as 9 percent of the money
designated as going directly to small business is folded into
financing for larger companies.
The bank estimates that small businesses benefit indirectly from a
further 4 percent of the value of long-term deals, worth $740
million in 2013.
The loudest critics brush off such data and want to shut the agency
down, but talks are going on over a possible compromise - perhaps
restricting its lending to smaller projects or granting it a
temporary reprieve.
(Editing by Tomasz Janowski)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed. |
