U.S. Export-Import Bank turnaround

August 1, 2010

Bucyrus International Inc. is world-renowned in the design and manufacture of mining equipment. The South Milwaukee-based company employs thousands of people nationwide and does business on six continents.

Recently, Bucyrus was expecting nearly $600 million in sales to a coal power plant in India that is currently under construction. In order to complete this sale, the plant, owned by Reliance Power, Inc., needs a loan guarantee from the U.S. Export-Import Bank. The ExIm Bank is responsible for overseeing loan guarantees of this sort and ensuring that projects meet established environmental standards. It is also responsible for promoting the export of American products, like the equipment made by Bucyrus.

The power plant in India meets all of the bank’s environmental standards, as well as international environmental criteria. Despite this fact and the ExIm Bank’s obligation to promote export of American products, in late June it denied the loan guarantee. Without the guarantee, Bucyrus would lose that $600 million sale and roughly 300 jobs in South Milwaukee and along the supply chain would be put in jeopardy. It is even more frustrating that the ExIm Bank would not initially comment on or justify the loan denial. The plant will still be built, the coal will still be mined. The bank’s loan denial merely ensured that those Bucyrus manufacturing jobs were sent to other countries.

The ExIm Bank’s decision was simply unacceptable. An enormous outcry erupted from Wisconsin citizens and elected officials, including me, calling on the bank to reconsider the loan guarantee. The pressure was tremendous and officials at the ExIm Bank did choose to reconsider. A compromise offer was made to Reliance to approve the loan guarantee if the power company agreed to increase its renewable power projects in India.

There are still a few steps that must be taken to finalize the deal, but it is clear that this partnership between the private sector and public officials was strong enough to effectively save hundreds of jobs in South Milwaukee. Bucyrus is a cornerstone of our economy in southeastern Wisconsin. We must move forward with green energy initiatives and technology, but, in doing so, we need to protect and create family-supporting jobs in our state.

Jeff Plale is the state senator for Wisconsin’s Seventh Senate District, which spans from Milwaukee’s East Side to Oak Creek, including downtown, the Third Ward, Bay View, St. Francis, Cudahy, and South Milwaukee. He can be reached locally at (414) 744-1444 or in Madison at (800) 361-5487 or sen.plale@legis.wisconsin.gov.

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