In a development filled with irony, Airbus intends to create an assembly facility in Mobile, Alabama. Why is this ironic? Because Senator Shelby of Alabama has been the chief obstacle to US Ex-Im "turning all of its lights on," to use Jonathan Bell of TXF's analogy.
The WSJ announced that
"Airbus Group's new factory in Mobile, Alabama, will open the company up to an unlikely source of financing: The Export-Import Bank of the United States (US Ex-Im).
This WSJ article is premature and naive of course because until president Obama's nominee to the US Ex-Im board is approved by Congress, the quorum which authorizes the U.S. Export Credit Agency (Ex-Im) to lend more than $10 million to one exporter, will not exist. Senator Shelby has stated publicly that he will not approve the president's superbly qualified nominee to the Ex-Im board. The U.S. Congress constitutes an existential threat to the creation of jobs in the U.S. Senator Shelby is an existential threat to the creation of jobs in the state he "represents." Representation is perhaps too strong a term for a body where two persons represent the entire population of each state. Government by fiat or despotism may be more appropriate terms. I wonder what our founding fathers would think of what can only be considered economic stupidity on such a global scale?
Irony turns to drama as one considers what I call the "capital market gambit" of this development for 2 reasons. First, whereas such European export insurance companies as Atradius, Euler-Hermes and Coface have offices in the U.S. and are "free to roam about the country," US Ex-Im has no similar facilities in Europe or anywhere other than in the U.S. Secondly and perhaps more importantly, such European companies as Spanish Abengoa and German Siemens, as Angela Merkel pointed out, have located facilities in the U.S. They have located in the U.S. in order to take advantage of US Ex-Im financing.