In recent years, aerospace companies such as Boeing have expanded their manufacturing in Utah for a variety of reasons: a skilled and productive workforce, a state government that promotes policies hospitable to business, a first-rate university system, and an ability to attract and retain talent due to an exceptional quality of life.
There’s another important reason for the aerospace industry’s growing presence in Utah: a strong and increasing global demand for American aerospace products that has boosted exports. In fact, the aerospace sector is one of the few manufacturing industries in which American companies remain competitive internationally, and commercial airplanes made by Boeing are no exception. As Boeing grows its business through exports, so too does Utah.
The best example is the 787 Dreamliner, our most technologically advanced, fuel-efficient commercial airplane on the market. Already Boeing has received more than 1,000 orders for the 787s, and more than 80 percent of all commercial airplanes we build go to customers outside the United States. Due to these strong export sales, Boeing is increasing the overall 787 production rate and expanding its manufacturing footprint in Utah.
I lead Boeing’s operations in Salt Lake County where we assemble the 787’s vertical fin and horizontal stabilizer as well as build parts used in every Boeing commercial airplane. Last year, because of the success of Boeing’s operations here, we turned an empty cabinet manufacturing plant in West Jordan into a state-of-the-art manufacturing facility. In addition, Boeing has partnered with local aerospace suppliers to position them to manufacture other structural parts for the 787.
The overseas sales of many 787 Dreamliners, as well as other Boeing commercial airplanes, are supported by the U.S. Export-Import Bank (Ex-Im). At no cost to U.S. taxpayers, this small federal agency helps large and small U.S. companies sell American-made products around the world. The Ex-Im works by providing loan guarantees and insurance for overseas customers to buy American products when commercial financing is not available.
Ex-Im’s track record in risk management would be the envy of any commercial bank, with a default rate of less than 2 percent historically and less than one-quarter of 1 percent last year. In 2013, Ex-Im sent more than $1 billion to the U.S. Treasury generated by fees charged to foreign customers for its loan guarantees.
Despite this record of financial responsibility and job creation, Ex-Im is currently under attack in Washington, D.C., and its future is in jeopardy. This is not just some inside-the-Beltway squabble. It is an issue that is personal to me, Boeing’s Utah employees, and their families. Ex-Im helps support overseas sales of not only U.S.-made airplanes, but also satellites and launch vehicles. Those exports are important in Utah, where more than 100 aerospace companies employ some 21,000 residents at wages significantly above the state average.
Large bipartisan majorities in the U.S. Congress have routinely re-authorized the Ex-Im, and more than 30 governors from both parties publicly support the bank’s continued role. Yet some representatives in Congress are intent on dismantling this successful public-private partnership that is so important to Boeing and the U.S. aerospace industry.9 comments on this story
Those opposing re-authorization of Ex-Im argue that government should have no role in financing U.S. exports. And in a perfect world, they might be right. Unfortunately, that’s not realistic in the global aerospace market. Countries like China, India, Brazil, Canada and Western Europe provide substantial export-credit to their manufacturers. Boeing’s major competitor Airbus is backed by three European export credit agencies based in France, Germany and the U.K. In the absence of the U.S. Export-Import Bank, Boeing customers who need loan guarantees will just turn to Airbus, reducing demand not only for our airplanes but for the talent and efforts of those who help build them in Utah.
Without congressional authorization, the bank will expire on Sept. 30. I hope that residents of Utah, seeing the opportunities and value Ex-Im provides to this state’s future, will encourage their elected representatives to support its re-authorization.
Larry Coughlin is general manager of Boeing Salt Lake.