Export bank chief rallies SC business support for future funding
Source: The State
September 23, 2014
COLUMBIA, SC — The Owen Steel plant in Columbia set the perfect backdrop Friday for U.S. Export-Import bank chief Fred Hochberg to remind South Carolina businesses what role global markets play in the state’s economy.
Skilled workers at the plant, some with 30 to 40 years’ experience, spent a stormy morning setting off hot flying sparks from huge steel beams as welders perfected colossal structural elements being prepared for shipment to such destinations as the third tower of the new World Trade Center in New York.
Over its 78 years fabricating steel, Owen Steel has shipped its work to some of the most easily recognized structures in the world, many of them in New York, one of the company’s primary customers. The plant also has produced steel to be exported overseas out of the port of Charleston and for such local structures as the new Darla Moore School of Business at the University of South Carolina and Nephron Pharmaceuticals Corp. in Cayce.
Friday was Steel Day in the United States and amid some congressional criticism of the bank, mostly from GOP members, Hochberg was singing the praises of the bank as an important protector of American jobs.
But Hochberg said Congress’ reauthorization of the 80-year-old bank this time around is receiving much more debate than in the previous 16 successful reauthorizations of the independent bank, which has nine months left on its current charter.
“I’m surprised we’re having this debate,” Hochberg said at the steel plant. “We supported 205,000 jobs last year. We do it at no cost to the taxpayer. We’re making sure that businesses, most of them are small (90 percent), can reach global markets. So it’s a little baffling we’re still having this debate.”
The bank said it has supported 1.2 million jobs in the country since 2009 and earned $2 billion over the past five years after the cost of operations and any loan losses.
In South Carolina, the Export-Import Bank has supported state exports valued at $2 billion since 2007, according to the bank’s statistics, including $1 billion in 2014, the equal of all exports over the previous six years.
“We’ve got nine more months and I’m gonna work real hard to find common ground (on) how we can move forward,” Hochberg said. The GOP-led House reportedly voted this week to temporarily extend the bank’s charter until 2015, rather than its normal five-year extension, and sent that proposal to the U.S. Senate.
President Obama has asked Congress for the five-year extension and a $160 billion cap for loans for the bank.
Hochberg, who toured an Upstate automotive interior manufacturing plant Friday afternoon with Republican U.S. Sen. Lindsey Graham, said most, though not all, of the South Carolina congressional delegation is supportive of the bank.
The bank said it helps small businesses compete in global markets in three primary ways: by offering trade credit insurance, which helps protect the small U.S. business against non-payment by a foreign buyer; by providing U.S. small business with guaranteed working capital loans to ensure payroll and other necessities; and thirdly, by providing direct working capital loans to businesses when it is unavailable through private financing.
Congress gives the bank the authority to make such loans and guarantees through its authorization powers.
Owen Steel said it has used the bank when forging exports deals in places such as Trinidad.
“A lot of our competitors from other countries have this kind of support from their governments,” said David Zalesne, Owen Steel president.
“To me, whether we are taking advantage of a particular deal or somebody else in our industry is, or any other American company is taking advantage of it, it’s a very useful and easy-to-use product that helps people to expand. And manufacturing’s critical to our economy.”