Martin Richenhagen is chairman and CEO of AGCO Corp., a publicly traded manufacturer (AGCO) of agricultural equipment headquartered in Duluth, Ga., that sells its products in 140 countries. He was in Washington, D.C., this week to attend the President’s Advisory Council on Doing Business in Africa, but he also took time to lobby for the Export-Import Bank’s reauthorization and talk to me at the National Association of Manufacturers’ headquarters.
Why the Export-Import Bank is needed: AGCO does business all over the world, including “certain difficult markets” where financing from export credit agencies such as Ex-Im Bank is needed in order to manage risk, Richenhagen said. Conventional banks often aren’t willing to assume the risk of financing sales of exports in these markets.
Impact of Ex-Im Bank’s lapse on AGCO: The company has an $80 million deal to sell grain storage equipment in Ukraine, but needs export credit agency financing to back it. Without Ex-Im Bank, which was forced to stop providing export financing on July 1, AGCO will move work on the equipment to its factory in Hungary so it can get financing for the deal from that country’s export credit agency. If Ex-Im financing were available, that work would be done at the company’s plant in Assumption, Ill.
In Richenhagen’s words:“This is just only the beginning. In the future, if we don’t get Ex-Im Bank coverage, I think there will be plenty of jobs in America that will disappear.”
Impact on America’s image:“Nobody in the world understands what’s going on in America,” he said, because every other developed country in the world offers export financing to their manufacturers. “The American brand is really damaged by these crazy guys who do things nobody understands.” If Ex-Im Bank isn’t reauthorized, “the signal Washington would send to the world is, ‘We don’t want to do business with you.’ “
Impact on U.S. manufacturing: The lack of an export credit agency “will be another disadvantage” for manufacturing in the U.S. “We already have very, very bad tax laws. We can’t repatriate foreign earnings. We have a business-unfriendly government. … So this is another element that forces manufacturing out of the country.”
His view of Export-Import Bank opponents:“It’s a weird combination of some right-wing Tea Party guys who are carried away and some socialists.”
But isn’t Ex-Im Bank corporate welfare?“We don’t get gifts here,” Richenhagen said. “We pay fees for the insurance we buy.” Ex-Im makes money for the government. “For the taxpayer, there is no advantage at all if you discontinue Ex-Im Bank. You just lose some jobs at the bank, and industry would lose jobs.”
Parting shot:“I don’t know what they smoke in Washington, but something is wrong with the country.”