McNerney says without Ex-Im Bank, Boeing work could move overseas

Boeing Co. Chairman Jim McNerney rattled his saber again Wednesday, suggesting the airplane maker would ship work overseas if Congress does not reauthorize the Export-Import Bank.

Speaking at the Economic Club of Washington, he said that Boeing is considering moving “key pieces” of the company to countries that offer export credits, Reuters reported.

The airplane maker is “now forced to think about this differently,” he told the audience, which included corporate executives and at least three foreign ambassadors, Reuters reported.

A company spokesman declined to provide further detail on McNerney’s comments.

The fate of the Ex-Im Bank, whose charter expired June 30, was left in limbo Tuesday after its renewal was not included in a short-term highway funding bill passed by Congress.

Without the bank’s financing, “U.S. manufacturers will have no choice but to consider increasing offshore production in countries that have export credit agencies,” McNerney wrote in an article published earlier this month in Politico, a publication covering inside-the-Beltway politics.

“This outcome is neither sought nor desired,” but it might be required for companies to compete abroad and continue delivering returns to shareholders, he said.

The head of the International Association of Machinists and Aerospace Workers’ (IAM) District Lodge 751, which represents about 32,000 Boeing workers in metro Puget Sound, criticized McNerney for threatening jobs here as political leverage.

“While we share his frustration with Congress and its failure to reauthorize the Ex-Im Bank, we are tired of Jim McNerney and his constant threats to take away our livelihoods and destroy our communities,” said Jon Holden, head of District 751, in a written statement.

The Ex-Im Bank, which was created during the Great Depression, provides financing for sales of U.S. goods overseas. Congress has to periodically reauthorize it, which usually occurs with little fanfare.

But some Republicans put the bank in their crosshairs last year, criticizing it as a corporate subsidy with little oversight. Critics derisively call it the Bank of Boeing, a nod to its biggest beneficiary.

The vast majority of the bank’s loans support small- and medium-sized businesses, supporters say.

This past fall, supporters managed to pass a temporary extension. However, Senate Republicans blocked reauthorizing the bank in June.

Since then the bank has not been able to provide new financing, but it is still administering existing agreements.

The district and IAM’s international leadership support reauthorizing the Ex-Im Bank.

Holden called McNerney’s implied threat to move jobs away “unacceptable.”

“Our workers in Puget Sound generate billions of dollars in revenue for Boeing, and our state’s citizens are committed to providing $8.7 billion in tax relief that will also boost Boeing’s bottom line,” he said in the statement. “Our members also have lobbied steadfastly for years in support of the Ex-Im Bank. And for that, all we get in return are more threats.”

Aerospace industry analyst Scott Hamilton called the comments “typical Boeing — they don’t get what they want, so they threaten to move jobs.”

Boeing had planned to use Ex-Im financing for 13 percent to 15 percent of its commercial aircraft sales this year, he said.

The company can provide much of that financing on its own, he said.

Citing unnamed sources, Reuters reported that the ongoing debate over the bank is making some companies question their planned purchases of a variety of Boeing products.

Having Ex-Im Bank financing can make the difference in the close competition with Airbus, which also gets publicly-supported export credit, Hamilton said.

While he supports reauthorizing the bank, Hamilton criticized McNerney’s habit of making vague, alarmist public statements.

McNerney is currently chairman of the company’s board of directors. He retired as Boeing’s CEO on July 1, closing out a decade running the Chicago-based company. He was succeeded by Dennis Muilenburg, the former head of Boeing’s defense side.

“I really hope Muilenburg takes a different tack,” but so far, he is an “enigma,” Hamilton said.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

Talk to us