Fred Hochberg, the very vocal leader of a little known credit export agency called the U.S. Export-Import Bank, made a stunning admission in an interview with the Philadelphia Inquirer. In the words of reporter Joe DiStefano, Hochberg explained "Big commercial jet makers like Boeing tend to arrange their own financing."
This is big news.
In the banking industry, the U.S. Export-Import Bank is commonly referred to as Boeing's Bank. And it's not hyperbole. While the taxpayer-backed Bank claims nearly 80-percent of its loan guarantees go towards small businesses, the overwhelming majority of the total dollar amount goes to Boeing. By some estimates, the massive multinational aeronautical company receives upwards of 80-percent of the Ex-Im Bank's taxpayer-backed loan guarantees.
As Congress considers whether to reauthorize the Ex-Im Bank later this year, lawmakers should ask a simple question: if Boeing can arrange its own financing, why is the Bank so heavily involved in subsidizing Boeing's export financing?
The truth is such involvement isn't necessary.
Last August, the Wall Street Journal reported the managing director of Boeing's finance arm, "said he was confident the company could find alternative funding sources for customers that wouldn't require it to boost its support of aircraft sales" if the Congress decided against reauthorizing the taxpayer-backed Export-Import Bank.
It looks like Boeing and Ex-Im agree; the company can survive (and thrive!) without the bank. And that should make it easy for lawmakers to decide against reauthorization the U.S. Export-Import Bank.