50 SKY SHADES - World aviation news

Boeing CEO says sales at risk due to U.S. Ex-Im paralysis

Download: Printable PDF Date: 07 Apr 2016 23:49 categories:
Publisher:
Boeing CEO says sales at risk due to U.S. Ex-Im paralysis - Manufacturer publisher
Tatjana Obrazcova
Country: United States Aircraft: Airplanes
Source: Reuters

A delay in appointing U.S. Export-Import Bank board members threatens to cost Boeing Co  sales, the company's chief executive said on Thursday, flagging an issue that also affects General Electric and other U.S. companies that depend on the agency's export financing.

Boeing is on the verge of losing orders because only two of five seats on the agency's board are filled, not enough to approve deals over $10 million, Boeing Chief Executive Dennis Muilenburg said at EXIM's annual conference in Washington.

The appointment of a third board member would allow the agency to help finance billions of dollars in sales of U.S. aircraft, rail, power and communications equipment around the world, EXIM Chairman Fred Hochberg said.

"We've got about $10 billion (worth of loans and guarantees) in our pipeline right now," that are being held up because of the short-handed board, Hochberg said in an interview.

"If exports slow in the areas that require our financing, it will also hit the supply chain" of 14,000 U.S. companies that supply Boeing, and jobs, he added.

Confirmation of a third member has been halted by Senate Banking Committee Chairman Richard Shelby's moratorium on some of the 16 Obama administration financial nominees who have been awaiting panel confirmation, effectively blocking sales for Boeing, GE, Caterpillar Inc  and other companies.

Muilenburg said Ethiopian Airlines [ETHA.UL] was among the customers concerned that a lack of EXIM financing could prevent it from buying more Boeing planes.

Banks have been cautious about offering loans of 10 years or more to smaller carriers or ones with higher credit risk without a government guarantee, and some experts have voiced concern that if Boeing self-financed such deals, it would drain resources from product development.

Industry sources say Boeing already has had to provide or arrange bridge financing for several airlines because of the gap in EXIM funds.

Last year Boeing said it lost two signed or potential satellite deals after EXIM's charter lapsed on June 30. The charter was renewed later in the year.

General Electric decided to move some production overseas to use foreign export credit.

This year, global jetliner sales have slowed as an industry-wide boom in orders fades, making export credit more important.

Boeing plans to trim production of its 777 jetliner in 2017. On Thursday it said it delivered 176 airliners in the first quarter. That pace is below Boeing's target of 740 to 745 deliveries for the year, but many deliveries are made later in the year.

Muilenburg also voiced support for the Trans-Pacific Partnership trade deal that has been an issue in the U.S. presidential campaigns.

He said the pact would not put U.S. workers at a disadvantage. He added that the defense industry needed a "dependable, robust" U.S. defense budget so it could invest.



Loading comments for Boeing CEO says sales at risk due to U.S. Ex-Im paralysis...


Recommended

Air Astana destined to become one of the largest Airbus A320neo Family operators in Central Asia and CIS

Air Astana, the flag carrier of Kazakhstan, is destined to become one of the largest A320neo Family operators in Central Asia and CIS over the next three years. The airline became the first operator o...

Bombardier’s Newest Challenger Jet Models Surpass Significant Delivery Milestones

Challenger 350 aircraft surpass 200 deliveries, as the Challenger 650 business jet marks 50th delivery Category-defining Challenger 300 series aircraf...

Aero-Dienst completes 120-month Global XRS check for Global Jet

Aero-Dienst, Nuremberg, completed the most comprehensive maintenance event on a Global Express XRS to the customer’s satisfaction. The workscope of the 120-month inspection included the dism...

Safran celebrates successful start of Open Rotor demonstrator tests on new open-air test rig in southern France

Safran is celebrating the success of the first ground tests of the Open Rotor demonstrator engine in Istres, southern France. The ceremony marking this milestone was attended by Clara de la Torre...