Airbus is building a $600 million assembly plant in Alabama where it expects to begin final assembly of its A320 family of commercial jets in 2015 and first deliveries to customers in 2016.
The U.S. Congress is considering reauthorizing the bank when its charter expires at the end of this month.
A report in the Seattle Times from Wednesday said that a nine-month extension has been added in a short-term budget bill.
Ex-Im Bank president Fred Hochberg told the conference sponsored by Reuters:
We’re about US jobs. We have no national treasures. Every company is a national treasure. … To the extent that the Airbus plane is actually made here, we could support those exports that are made in the United States.
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Airbus has said that U.S. suppliers provide more than 40% of the parts for the A320s, including the planes’ CFM56 engines, which are made by a 50/50 joint venture between General Electric Co. (NYSE: GE) and the Snecma division of France’s Safran. CFM International is also building the CFM Leap-1A engines for the new A320neo.
Last week the United Arab Emirates’ Emirates airline said it did not need the Ex-Im Bank’s help to purchase new planes. Emirates received $900 million in loan guarantees in 2013.
Does this help or hurt Boeing? As the bank’s president pointed out in his remarks, GE’s Germany-based competitor Siemens gets Ex-Im financing for customers of its gas-turbine products that are manufactured in North Carolina.
On one hand, among some congressional representatives that may be new news and raise even more obstacles to reauthorization of the Ex-Im bank.
On the other hand, Hochberg’s claim that failing to reauthorize the bank threatens 205,000 U.S. jobs may carry the day.
About 46% of the bank’s total financial exposure is related to aircraft made by Boeing, according the Reuters report. Having to replace that certainly will have some impact on the company’s finances. Standard & Poor’s Ratings Services has estimated that failing to reauthorize the Ex-Im Bank could raise the demand for the company’s own financing from around $3.5 billion to $9.0 billion.
Boeing’s stock was trading down about 0.5% in the noon hour on Thursday, at $127.61 in a 52-week range of $107.80 to $144.57.
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