02 Keynote E im chairman fred hochberg

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  • Michigan Senator Debbie Stabenow couldn't be here, but I have worked closely with her on the President's Export Council to help grow jobs and exports. Senator Stabenow's regional staff person Barbara McCallahan is represent her. Sen. Stabenow hosted a reception this past Tuesday for the PEC members and we are fortunate to have 3 Michigan CEO's on the President's Export Council: Andrew Liveris of Dow Alan Mulally of Ford Stephanie Burns of Dow Corning AIT – Ed Chalupa is president (one location is (Chesterfield Township, MI – near Detroit). We authorized $51 million sale for Bomardier Inc of Canada in 2010. Another $25 million now pending. Long-term loan guarantee for JP Morgan. Similar to myself, Governor Snyder is a businessman-turned-politician who strongly supports small business. His business talent was shown at Gateway Computers where he helped it grow from 700 employees to a Fortune 500 company. Thus, the governor can relate to many of the challenges exporters face in running their businesses. He understands the pressures of developing strategies to compete around the world - ensuring there is adequate working capital - and managing cash flow to pay bills and grow. The Governor and our city/state partner want this region to increase its international sales and that is why they have encouraged the Bank to join this session. ========================================================================== “ Made in America” Today I will be discussing how the economic times have changed and how our country must adjust - growing Michigan and U.S. exports is a critical first step. The Export-Import Bank is taking significant steps in contributing to the improvement of our American economy. (NEXT SLIDE: FIVE PERCENT of consumers live in U.S.: 95% Abroad)
  • 5 percent of consumers live in U.S. (first row of this audience) – This is WHY WE ARE HERE Ninety-five percent of the world's consumers live outside our borders. (the rest of the room can’t be ignored) One billion people entering the middle class by 2020 Think about: How important it is for American companies to sell to this growing middle class? Think about: Demand … Opportunities. Think about: the boon these sales would have for your company, our economy and our communities: Job creation, profits, wealth. The current economic model is unsustainable. Job creation – must come from the export sector. (Transition: And the future is looking good ...) (Next slide: Made in USA)
  • U.S. largest manufacturer in world … Number 3 in exports - - #1 in 2002 Innovation Quality Outstanding Service Transparency; and the most productive and resilient workforce in the world. That is America’s competitive edge . And I see it at company after company that I visit from coast to coast. Opportunities are there—we must capitalize on them! Ex-Im Bank and its many partners, are here to help make sure the financing is there to make these transactions happen. (Next Slide: Doubling Exports)
  • I am bullish on the U.S. economy. We are on the path of DOUBLING Exports in 5 years! Export growth has been strong since the end of the recession in mid-2009. Exports of goods and services over the last twelve months totaled $2.1 trillion, which is 30 percent above the level of exports in 2009. U.S. EXPORTS HIT $180 billion in September, an all time high (7 th record month in 2011) FTA - South Korea, Colombia, and Panama Exports are playing a critical role in our economic recovery – and must play a central role in our long-term economic stability and prosperity. We have more work to do but progress is being made to create a climate where American exporters – and American workers – can grow, thrive, compete – And Win the Future! First, let me tell you a little about the history of Ex-Im Bank (Next Slide: Ex-Im Bank HISTORY)
  • A little history: Founded in 1934 during the depths of Depression Pan-American Highway (30,000 mile road that opened up trade through Americas) Marshall Plan ($2 Billion loan rebuilt Europe after WWII) Road (China-Burma) (700 miles long - $25 million loan to gov’t of China to expand trade) China used part of this loan to purchase 2,000 three-ton trucks from Ford, Chrysler, and General Motors. Our mission today remains the same as it was during the day’s of FDR---growing our economy—and creating American jobs--through exports. Ex-Im Bank has a long history of helping U.S. companies sell their products abroad, dating back to 1934. (Next Slide: Financing Makes the Difference)
  • We are self-sustaining. Returned approximately $3.7 billion to American taxpayers in the past SIX years (2006 – 2011). Note: Only $1.9 million for last 5 years (avg. $400/year – CFO getting specifics 2006 was banner year at $1.8 billion (Next slide: Support in 150+ Countries - We Target 9)
  • 1. GDP Growth 2. Infrastructure Expansion ( tripled vs. 3 years ago) 3. AG, Services and Commodities are also growing 4. Ex-Im Bank Differential Recall I said exports were at a +16.5% Rate? - - - Three targeted countries are in the top ten of countries buying more from the U.S.(Sept 2011): Turkey +49 % Brazil +30% S Africa +29 % (Next slide: RECORD-BREAKING YEAR)
  • More than $32 billion in export financing supporting $41 billion sales 290,000 jobs at 3,600 companies $6 billion in small business authorizations (+20%) Over 85% of total transactions benefit small business (Next slide: Michigan Trade Stats)
  • Over one-quarter of all manufacturing jobs in MI depend on exports. CY '10 STATE 8 th largest in USA and #10 with Ex-Im Bank $45 billion ( Up 36% from FY ’09 ) but returning to CY’08 level as 2009 was bad year. “ Above Par” growth rate 90% exporters in state are SMEs Detroit – Warren – Lavonia area ($28 billion which is 64% of total state’s exports) FY’11 EX-IM BANK Michigan and Ex-Im Bank have room for improvement and that is why we are here today. $147 million authorized (-68%) and $458 million in 2011* [* FY’10 influence: $330 million by just 4 companies affected FY 2011 results Ford - $250m Hess - $34m TEI - $25m United Solar - $22m] Thus, 2011 was not as bad as the numbers look. Also on the positive side, 52% of our authorized dollars are for small business … … And some of those small business companies are here today. KEY MARKETS: Canada (nearly half exports at $22 billon – need to sell more than one country) - Mexico - China - Germany - Japan (Next Slide: SCREAM )
  • This is the reaction I often get when I talk to small businesses about export opportunities. Exports: Outside comfort zone. I hear it all the time. Small business owners say to me: I already lose sleep worrying about getting paid by my customers in New Orleans, New York and New Mexico. How on earth am I going to sell to New Delhi? (Next Slide: Global Access )
  • SURVEY ROOM - how many export? how many export to more than one country? Global Access aligns our small business goals with the President Obama’s National Export Initiative. The features of Global Access are centered around some very concrete goals: 5,000 companies $30 billion in transactions by 2015 THREE strategies: Customer focus with new financing products Reaching more companies to become AWARE of Ex-Im’ Banks products and services More Partnerships (Next Slide: Customer Focused)
  • The foundation of a successful business is a customer centric culture. Increased efforts to make exporters AWARE of how they can benefit (details later) We have reduced approval time of applications. Small business products are becoming known and selling This year we’ve continued to strengthen our customer service and product innovation. More companies are now eligible for our financial support – (expanded U.S. content) (Next Slide: NEW Products)
  • Global Access is CUSTOMER FOCUSED We have developed several new financial products and policies specifically for small business exporters. Where’s Jan Blaho – Senior Export Finance Manager? Jan – on govt. agency panel coming up later and will provide the details of the new products and policies am going to mention. A. Express Insurance : 5-day turnaround & Streamlined Application Very popular: Since May, 135 policies issued B. Supply Chain Financing : Supporting companies that supply U.S. exporters can now get financing too. Boeing, CNH, and Caterpillar have signed on. 2. In fact, these three are the largest exporters we support. 3. DON’T be in shock! We also supported local Acme Electric with a $1,200 transaction (low voltage transformer). No deal is too small for the Bank. C. Renewable Express : for renewable energy projects under $10 million. (Next Slide: Reaching More Companies )
  • Our outreach and communications are more active than ever. NEW SMALL BUSINESS PORTAL Step-by-Step understanding of Ex-Im Products and Next Steps defined. FORUMS ARE WORKING We’ve held Global Access events across the country — as you can see from the map – Today is our 31st and more are planned: New York City Buffalo Tampa Portsmouth, NH, Forum this year on January 31, like this one. Bill Skelley, of Skelley Medical , testified before the attendees he could double his company's emerging markets sales by offering open account terms. Two weeks later, Skelley was approved for a $250,000 small business policy They Expect to cover $1.25 million in exports to India and Mexico 3. WEBINARS Held Monthly Presently featuring a series with NAM – and FedEx is in the plan 4. SEMINARS and INDUSTRY EVENTS Held Nationwide and in DC (Next Slide: Partner Logos )
  • Global Access PARTNERS No need to read them Partnerships: true public-private project National network of City-State Partners: 60+ Local City/State Partner: World Trade Center Detroit/ Windsor Association 2. Van Andel Global Trade Center Grand Valley State University (Next slide: Working Capital Story – MAG)
  • Exporter: MAG IAS - Sterling, MI Ex-Im Bank Increases Michigan Company's Working Cap to Maintain 100 Jobs Makes machine tools for durable goods industries – aerospace, automotive and truck, oil and gas, etc. Need : Contract backlog leading to turning international jobs down. So needed more funds this year to cover: 1. standby letters of credit for performance bonds and 2. collateral for advance customer deposits Destination: China, Brazil and India Product/Solution : Ex-Im Bank working capital loan guarantee Transaction: Existing guarantee supported $100 million in annual exports Doubled it to $20 million (3 year revolving) Results: 1. Sales Growth 2. 100 jobs maintained 3. Likely hire additional workers in areas hard hit by the recession –Sterling Heights, Mich, Wisconsin and Kentucky. Recently featured on NBC News as manufacturing comeback. Exports expected to grow from 37% to 54% in 2011. Lender: Burdale Capital Finance (Stamford, CT) (Next Slide: Export Credit Insurance – Hardwoods of MI)
  • Exporter: Hardwoods of Michigan - Clinton Sawmills converts timber to lumber and dries it so it can be used indoors. Customer then make products such as flooring, decks and furniture Employs 75 Needs: 1. Nonpayment protection, especially for a large customer in Estonia (93% of exports) 2. Extend Credit Terms Current Destinations : * Primary: Estonia (over $1.5 million) lumber to make decks Estonia is 10% of total sales * Other countries: China - Japan - Mexico Solution: Graduated from using small single-buyer to multi-buyer policy (for coverage elsewhere) $750,000 limit Broker: Global Commercial Credit (Next Slide: Working Cap and Insurance Story – Energy Int. )
  • Exporter: Energy International Corp. - Canton Sells and supplies HVAC equipment (warm air heating and air-conditioning) Veteran -owned 24 employees Customer for 20 years (and no claims!!!) Need: 1. Funds to grow business and improve cash flow 2. Nonpayment protection (required by lender) Destination : Middle East – Jordan, Lebanon, Saudi Arabia, UAE, Qatar, and Egypt 2011 Export Credit sales: $6 million (Saudi 73%, Qatar 25%) Solution: Working Capital Loan Guarantee Small Business Export Credit Insurance $5 million policy Lender: Bank of America Broker: Newstead Credit and Political Risk, Inc Results: 64% growth from 2006 to 2011 ($18 million) Other: 1. 25% insurance discount using both products 2. Lender and broker do paperwork (Next Slide: Buyer Financing Story - Wirtz Mfg . )
  • Exporter: Wirtz Manufacturing Company – Port Huron Makes equipment to produce finished batteries for Autos, Motorcycles, Aircrafts, Boats, etc. Third-generation family owned. Started in 1932. 100 employees Destination: Israel (Vulcan Automotive Industries) Challenge: Buyer needed term financing to replace their old, battery-making equipment. Vulcan makes maintenance-free, long life auto batteries. Ex-Im Bank Solution : Ex-Im Bank Medium-Term Insurance $979,000 on five-year terms Lender: M & T Bank Results: Customer was able to get five year loan. Purchase supported 30 jobs (Next Slide: ZZZZZZZZZZZZZZZ)
  • We’re in the Sleep Business. Our mission is to help you sleep better at night. (Next Slide: KEEP MOVING – USA #1)
  • OUR GOAL is #1 Congregation members are mourning over you, what would you like them to say?        Artie said: "I would like them to say I was a wonderful husband, a fine spiritual leader, and a great family man.“        Eugene commented: "I would like them to say I was a wonderful teacher and servant of God who made a huge difference in people's lives .“        Fred said: "I'd like them to say, "Look, he's moving!" Business People : We are here to make your company more successful. Every one of us at Ex-Im and Keep YOU MOVING! ( LAST SLIDE – Mention Jan Blaho and Govt. Panel)
  • We have time for Q & A NEXT: PANEL: New Federal & State Export Finance Resources – Hear about the latest export support programs! Panel introduced by Bill Richeson, Senior Vice President, International Division - PNC Bank * FYI – Bill is responsible for international sales and marketing for PNC Bank in Michigan, Illinois, and Wisconsin). Prior to PNC, he worked 15+ years for Bank of America in Virginia and Georgia. Jan Blaho , Export Finance Manager Ex-Im Bank Richard Corson, Director, U.S. Commercial Service – Pontiac John O’Gara, Regional Manager, Export Solutions Group, SBA Paul Brown, Vice President, Capital Markets, MEDC
  • 02 Keynote E im chairman fred hochberg

    1. 1. Global Access for Small Business November 18, 2011 – Detroit, Michigan
    2. 2. 1 BILLION 5%
    3. 3. U.S. #1 manufacturer in the world U.S. #3 in global exports 1% of U.S. companies export
    4. 5. Pan-American Highway Marshall Plan Burma Road
    5. 6. $3.7 BILLION No Cost to Taxpayers
    6. 7. Support in Over 150 Countries 1. Brazil 2. Colombia 3. India 4. Indonesia 5. Mexico 6. Nigeria 7. South Africa 8. Turkey 9. Vietnam
    7. 8. FY 2011: A Record-Breaking Year <ul><li>More than $32 billion in export financing supporting $41 billion sales </li></ul><ul><li>290,000 jobs at 3,600 companies </li></ul><ul><li>$6 billion in small business authorizations (+20%) </li></ul><ul><li>Over 85% of total transactions benefit small business </li></ul>
    8. 9. Michigan Exports <ul><li>Key Industries: </li></ul><ul><li>Transportation Equipment </li></ul><ul><li>Chemical Manufactures </li></ul><ul><li>Machinery Manufactures </li></ul><ul><li>Primary Metals Manufactures </li></ul><ul><li>Computers and Electronic Products </li></ul>Annual 2010 Total State Exports : $45 billion (+36%) Recovering Ex-Im Bank FY’11 $147 million Small Business 52%
    9. 11. Global Access
    10. 12. Putting Customers First: Government at the Speed of Business <ul><li>More outreach and information </li></ul><ul><li>Faster cycle time </li></ul><ul><li>Strong growth in Insurance and Working Capital </li></ul><ul><li>Streamlined credit approvals and delegation </li></ul><ul><li>Expanded eligibility </li></ul>
    11. 13. Customer Focus: New Products Express Insurance Supply Chain Financing Renewable Express
    12. 14. Reaching More Customers Industry Events Seminars Webinars
    13. 15. Partners
    14. 16. Working Capital Ex-Im Bank Success Story <ul><li>MAG IAS </li></ul><ul><li>Sterling, Michigan </li></ul><ul><li>Jobs Maintained: 100 </li></ul><ul><li>Likely Add 50 More </li></ul>“ The Ex-Im facility will enable MAG to pursue additional export sales which in turn will secure our current manpower and support new hires.” - Dave Nowicki, President
    15. 17. Receivables Insurance Ex-Im Bank Success Story <ul><li>Hardwoods of Michigan </li></ul><ul><li>Clinton, Michigan </li></ul>Destination: Estonia   &quot;Exim insurance has given us the flexibility to extend larger lines of credit to worthy customers at a competitive rate.&quot;  - Brian Burt, CFO
    16. 18. Working Capital and Insurance - Success Story Combo <ul><li>Energy International Corporation </li></ul><ul><li>Canton, Michigan </li></ul>Destination: Middle East “ Ex-Im Bank is our safety net for resources and protection.” – Barry Pray, Controller
    17. 19. Buyer Financing Ex-Im Bank Success Story Wirtz Manufacturing Port Huron, Michigan Jobs Supported: 30 Destination: Israel
    18. 21. Our Goal
    19. 22. exim.gov/smallbusiness 800.565.3946

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