Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
August 21, 2015 02:00 AM

Export-minded plastics firms push for Ex-Im Bank

Steve Toloken
Assistant Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Wikipedia

    The shutdown of the Export-Import Bank of the United States may prove to be temporary, the result of a nasty political fight in Washington, but it has American plastics companies who rely on it for international sales nervously watching and waiting.

    “It is important to us and it has worked well for us in the past,” said Russ LaBelle, president of equipment maker Wilmington Machinery Inc. “Frankly I think it would be a mistake not to continue it.”

    The Wilmington, N.C.,-based maker of injection and blow molding equipment uses Ex-Im financing for about one-third of its exports, often to developing countries.

    With exports making up about half its total sales, it's an important tool for the company, particularly against European competitors who can receive similar support from their governments, LaBelle said.

    But the 80-year-old bank, which is a U.S. government agency that guarantees loans from private banks to finance exports from American companies, shut its doors June 30 after conservative Republicans in Congress blocked its reauthorization.

    Opponents of the bank call it corporate welfare, with groups including Americans for Tax Reform challenging the notion that it's crucial to exports.

    They cite an analysis of U.S. government data by the Mercatus Center at George Mason University in Fairfax, Va., which showed that only 1.9 percent of U.S. exports by value were financed with the bank.

    “Needless to say, without the Ex-Im Bank, American exports will not collapse,” according to Veronique de Rugy, a senior research fellow at Mercatus.

    An April report from Mercatus argued that its mainly big businesses that benefit, and they could obtain financing elsewhere. All of the 10 biggest users of the bank overseas are large corporations buying from U.S. multinationals.

    Half of those 10 are foreign airlines buying Boeing aircraft (Boeing is the single biggest U.S. user) and the other half are involved in the exploration or production of oil, it said.

    The overseas firms that receive the loans can wind up competing against U.S. companies, bank opponents argue.

    But supporters of the bank such as plastic packaging manufacturer Multifilm Packaging Corp. in Elgin, Ill., say the bank's financial guarantees are a big help in its efforts to boost sales, particularly in emerging markets without well-developed financial systems.

    “What the Ex-Im Bank allows us to do is be a little bit more gutsy,” said CEO Olle Mannertorp. “Mexico and South America and to a certain extent the Caribbean, these are economies that are so-called cash economies.”

    Exports are more than half of Multifilm's business and helping customers get financing at U.S. interest rates is a key selling point, he said.

    “How do you go about trying to grow in that part of the world?” Mannertorp said. “We have a hard time competing on price with the low labor cost there. If you offer high quality product that also includes a line of credit, you have a good offer.”

    The Ex-Im loans to Multifilm customers have been good investments and have not required bailouts, he said: “We haven't cost Ex-Im a penny.”

    Losing the bank won't hurt business with its existing, established customers, but it will make it more difficult to close deals with new customers, Mannertorp said.

    Bank supporters like the Ex-Im Coalition say the default rate on Ex-Im loans is less than 2 percent over its history, and was less than 1 percent in 2014, after a tightening of lending rules in 2012.

    A broad coalition of business lobbying groups, including the National Association of Manufacturers and the U.S. Chamber of Commerce, are lobbying for the bank's renewal, arguing it matches the similar services offered by more than 50 other countries.

    Wilmington Machinery's LaBelle said in his company's experience, Ex-Im backed loans go to overseas customers with established track records that can show several years of profitability.

    “I feel it will be reauthorized, since it's one of the few tools we have to promote exports,” LaBelle said. “Let's face it, European competition is very stiff.”

    For legislators who oppose the bank, stopping reauthorization has been a significant political victory. The fight is expected to restart in September, when Congress returns to session.

    “If you're a politically connected bank or company that benefits from Ex-Im, no doubt you would like it to continue,” said Texas Republican Rep. Jeb Hensarling, one of the bank's most vocal opponents. “After all, it's a sweetheart deal for you. Taxpayers shoulder the risk and you get the reward.

    “But if you work at a small business or other American company competing in the global marketplace, it's unfair,” he said. “Ex-Im effectively taxes you while subsidizing your foreign competitors.”

    RECOMMENDED FOR YOU
    Thermoformer Genpak closing Ohio facility, cutting 67 jobs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Asahi Kasei settles Michigan PFAS lawsuit, agrees to clean up pollution
    2
    Numbers That Matter Live January 2023: Expect short-term pain, strong rebound in 2024
    3
    Berry, Coca-Cola launch tethered caps in EU markets
    4
    Berry sees growing health care demand in India; new plant to open soon
    5
    Top-dollar deals, repeat buyers highlight 2022 M&A
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified