Construction companies and equipment makers got some good news on May 30, when President Obama signed a three-year reauthorization for the U.S. Export-Import Bank.
Ex-Im is widely known for its support for major companies. The leading beneficiary is Boeing Co., with $30.7 billion in assistance from the bank over the 2007-2012 period, according to Ex-Im's ranking. The construction industry is represented in Ex-Im's top 10 by Caterpillar Inc. and Bechtel Corp.
But Ex-Im isn't completely the land of the giants.
A construction case in point is BLS Enterprises Inc., of Bensenville, Ill., which makes polyurethane-covered steel track pads for milling machines, pavers and other equipment. Its annual sales total $4 million to $5 million, says Barry L. Stoughton, the company's president.
Stoughton—he's the "BLS"—says exports of his company's TUFPADS increased 30% last year, partly because of Ex-Im help.
The bank says small businesses comprise 65% of the 5,768 U.S. exporting companies that it has assisted since 2007.
Stoughton says that a few years ago, a company in Taiwan ordered TUFPADS, and paid for the order up-front, following BLS's policy on export sales.
He says the Taiwan company found that their customers liked TUFPADS and it wanted to buy more of them. It sought to triple its order but, Stoughton says, the Taiwan firm lacked the cash to pay BLS for the larger order of pads up-front.
BLS went to Ex-Im, which provided the aid needed to get the deal done. Stoughton says its Taiwanese customer had continued to buy from BLS for the last several years.
Stoughton says, "
I think without (Ex-Im assistance) we would have had a difficult time continuing to do business with this customer, and we have other potential uses of the [bank's] program in other parts of the world."
The just-signed legislation raises Ex-Im's total assistance limit to $120 billion, from $100 billion. The cap then is rise to $140 billion in 2014. The measure "gives us three more years to be able to use [Ex-Im] and to help the balance of trade," Stoughton says.
Large companies also were happy to see the bank's authorization extended.
Bill Lane, Caterpillar's Washington director, says that getting the Ex-Im bill approved was "an important priority" for the company. (See earlier ENR story on the bill for additional information and comments.)
Paul Weida, Black & Veatch vice president of government affairs, said in a statement: "The Export-Import Bank has become an essential entity in providing financing options that enable U.S. companies to compete for and win large infrastructure projects overseas."
Ex-Im last year approved an $806-million loan to Eskom Ltd., South Africa's state-owned electric utility. The bank says the loan supported Eskom's acquiring engineering and construction-management services from Black & Veatch for a powerplant project.
Business interests, including the U.S. Chamber of Commerce and Association of Equipment Manufacturers, pushed for the bill. Unlike past Ex-Im authorizations, this one was a struggle.
Lane says, "Right now the number-one priority of many members of Congress is reducing government spending And the Ex-Im's authorizations got entangled in the desire to reduce spending while increasing exports."
He adds, "What made this fight different than a lot of other spending fights is that the Ex-Im Bank actually returns revenues to the federal government, [which] makes money on Ex-Im loans. And that ultimately proved to be one of the trump cards that the business community had."