Local businesses cheer revival of Export-Import Bank
FARGO, N.D. - When Congress passed, and President Barack Obama recently signed, legislation reauthorizing the Export-Import Bank of the United States, you could almost hear a collective sigh of relief from many small businesses in North Dakota.
FARGO, N.D. – When Congress passed, and President Barack Obama recently signed, legislation reauthorizing the Export-Import Bank of the United States, you could almost hear a collective sigh of relief from many small businesses in North Dakota.
And no company was happier about the news than WCCO Belting in Wahpeton, which had warned it might have to cut jobs if Ex-Im, as the bank is known, remained shuttered. "We rely heavily on exporting - it's over half of our business - so we need to use all the tools to our benefit that we can and Ex-Im is one of them," said Karley Serati, who is sales and marketing administrator at WCCO Belting, a company her grandfather founded.
Serati credited U.S. Sen. Heidi Heitkamp, D-N.D., for providing much of the push that helped get the bank reauthorized.
"We're a small family business located in a rural community making a product most people don't know exists, but we have a passion for it," Serati said. "It's nice that Heitkamp has a passion for small business and she was able to help ours."
The latest reauthorization will keep the Export-Import Bank going until 2019, but Heitkamp said supporters of the agency must remain vigilant against future efforts to undermine something she said is critical to businesses in the state.
"I expect that next time it won't be a tactic to shut the bank down, but to restrict the bank's charter to limit its effectiveness," Heitkamp said, referring to the approach critics of the bank are likely to take.
"We'll always have to fight this fight," she added, "But, I think winning this as big as we did will make a full-on attack on the bank less likely."
The Export-Import Bank is an independent federal agency and the official export credit agency of the United States. Among the things it does is provide loans, loan guarantees and insurance to facilitate overseas sales by U.S. firms.
Without such guarantees, doing business overseas would be too risky for many small companies because they would have little recourse if customers don't pay for their products, backers of the bank argue.
Heitkamp and other proponents of the Export-Import Bank emphasize that the agency is self-supporting from a cost perspective and that it even returns a profit to the U.S. Treasury.
Detractors call it corporate welfare because even very large companies can use its services.
Howard Dahl, president and CEO of Fargo-based Amity Technology, said he was pleased with the reauthorization and he said its services are very valuable to companies like Amity, a builder of agricultural equipment.
"For some reason, there are many people that have looked at Ex-Im as crony capitalism," he said. "For those of us who are actually doing exports, we face very tough competition from the export credit agencies from different countries."
"For my companies - Amity Technology in Fargo and AGCO-Amity JV in Wahpeton - we have lost many sales due to export financing provided for German companies," Dahl said. "The Export-Import Bank has allowed us to get many sales over the years and without it we would be at a big disadvantage on many contracts."
Prior to the reauthorization, WCCO Belting, which makes a variety of products, including conveyor belts, said it faced having to cut up to 60 percent of its workforce, a move that now appears unlikely.
"We actually saw some plants shut down in Maine and Wisconsin," Heitkamp said.
"Had this (bank closing) gone on much longer, I think we would have seen the potential of layoffs in North Dakota as well," she said, adding that many businesses in the state view the Export-Import Bank similar to how they view the Bank of North Dakota.
"We know what a great tool that (bank) has been for our economic development," Heitkamp said.
Foreign countries also know the value of credit agencies when it comes to supporting export activity, she said.
"When China and India saw their economies flatline, the absolute first thing they did was put more money into their credit export agencies," she said.
"That's a lesson we shouldn't unlearn," Heitkamp added. "Our competitors globally were waiting for us to stumble. So, gratefully we're back in the business of supporting exports in the United States."