AGCO CEO Sounds Off in Washington

AGCO Chairman and CEO Martin Richenhagen took time during a recent visit to Washington D.C. to share thoughts on lawmakers' allowing the authority of the Export-Import Bank to lapse.

Richenhagen was in D.C. to attend the President's Advisory Council on Doing Business in Africa. While he was there, he lobbied for the Ex-Im Bank's reauthorization and spoke with the Washington bureau chief for the Business Journals.

He said that AGCO sells its products in 140 countries, including markets in which financing from export credit agencies is essential to managing risk. Conventional banks are unlikely to assume risk of financing export sales in these markets.

Richenhagen said the corporation has an $80 million deal to sell grain storage equipment in Ukraine but needs export credit agency financing to back it. Without it, AGCO would move the work to its factory in Hungary, where it can get export financing. If the Ex-Im Bank were operating, AGCO would do the work in Assumption, Ill.

Information from the bank says that in fiscal year 2014, nearly 90% of its transactions supported small businesses. It also backed $27.5 billion in exports in FY 2014 and supported 164,000 American jobs. And, Ex-Im noted that it made money, sending more than $674 million in profits to the U.S. Treasury in FY 2014.

Congress let the Ex-Im Bank’s lending authority expire on June 30. According to the Bloomberg QuickTake, Tea Party Republicans, who want to limit government intervention in the free market, said the bank provided a form of corporate welfare.

“We don’t get gifts here,” Richenhagen told the D.C. bureau chief. “We pay fees for the insurance we buy. For the taxpayer, there is no advantage at all if you discontinue Ex-Im Bank."

He said if lawmakers do not reauthorize the Ex-Im Bank, it costs American jobs and sends the message that the U.S. doesn't want to do business with the world.

“Nobody in the world understands what’s going 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.”

He went on: “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.”

The Bloomberg report said Congress had considered bills to reauthorize the lender with some reforms. But U.S. Rep. Jeb Hensarling (R-TX), head of the House committee that oversees the bank, called for its abolition.

The bank does not die immediately; it will complete making loans that were already under way and collect outstanding loans.

Proponents still hope to reauthorize Ex-Im Bank this fall. S