WASHINGTON/WARSAW (CI Ukraine) — Westinghouse Electric Company President and Chief Executive Officer Daniel L. Roderick says the Pittsburgh, Pennsylvania-based nuclear energy group could lose up to 50,000 jobs if Congress fails to renew the re-authorization for the US Export-Import Bank.
[Westinghouse Electric Company President and CEO Daniel L. Roderick speaks to Capitol Intelligence/CI Ukraine using CI Glass at The Hill newspaper’s America’s Nuclear Energy Future conference. Washington, DC. June 2, 2015]
Speaking to Capitol Intelligence/CI Ukraine at a conference in Washington, DC, Roderick said a potential USD 10bn contract to build a power plant in Poland will be placed in serious jeopardy if Congress fails to reauthorize EX-IM Bank as the contract can be easily awarded to French rival Areva (EPA: AREVA).
EX-IM supporters in the House and Senate hope to force through a 5-year EX-IM Bank re-authorization as a rider to the must pass by end-July US Highway re-authorization bill.
Roderick said that Westinghouse, as a nuclear energy group, is dependent on the EX-IM to win government-to-government contracts such as the one in Poland, nuclear fuel supply contracts in Ukraine and Kazakhstan and other nuclear energy deals in markets from Bulgaria to India.
The group of Conservative House Members led by House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Minority Leader Kevin McCarthy (R-CA) are leading a movement to abolish EX-IM Bank as an illicit government subsidy favoring a few big businesses.
However, the debate over the re-authorization and potential loss of thousands of US manufacturing jobs has created a bipartisan alliance between House Financial Services Ranking member Rep. Maxine Waters (D-CA) and Republican house members such House Energy and Subcommittee member Rep. Adam Kinzinger (R-Ill) and House Financial Services and Agriculture Committee member Rep. Frank Lucas (R-Ok).
[US House Financial Services Ranking Member Maxine Waters (D-CA) speaks with Capitol Intelligence/BBN using CI Glass at Export-Import Bank’s Washington Annual Conference. DC. April 24, 2015]
Congresswoman Waters is taking the lead in defending the EX-IM Bank as she sees the bank as a useful and critical tool in helping American small-to-medium size businesses –many owned by minorities and women — grow through exports.
Currently, the Polish government is preparing to invest up to USD 10bn to build a new nuclear power plants as a means to ensure energy independence from its eastern neighbor Russia and guarantee the country’s ongoing economic prosperity.
Listed Polish energy group Polska Grupa Energetyczna SA (PGE) is already preparing to build a nuclear power plant using technology from Westinghouse or GE (NYSE:GE)/Hitachi but has held in depth talks with Areva, an adviser close to PGE told Capitol Intelligence.
US Senate Energy and Natural Resources Committee Chairman Sen. Lisa Murkowski (R-Alaska) said she is firmly behind the re-authorization of EX-IM Bank and the Westinghouse bid to build a nuclear power plant in Poland.
Answering a question from Capitol Intelligence/GCA at a Pen & pad press briefing on July 23, 2015, Murkowski said that her upcoming Energy Policy Modernization Act of 2015 promotes the export of US LNG and greater energy independence both for the United States and her allies.
Murkowski has consistently lobbied promoted the export of US crude and LNG even before becoming the powerful chairman of the Senate Energy Committee as evidenced by her interview with Capitol Intelligence on March 3, 2015 .
[US Senator Lisa Murkowski (R-Alaska) speaks to Capitol Intelligence/GCA using Google Glass at IHS Ceraweek in Houston March 3, 2014]
Energy independence for countries that neighbor Ukraine such as Poland has once again become a front-page issue with the July 4th, 2015 incursions of Russian nuclear bombers off the coast of Alaska and California.
One Russian bomber, flying just ten miles off the coast of northern California, sent a radio message: “Good morning, American pilots. We are here to greet you on your Fourth of July Independence Day.”
Caterpillar (CAT:NYSE) , the Peoria,Illinois-based construction machinery and power group, is also supporting the re-authorization of EX-IM Bank not only for sales of its construction and agriculture but also its large San Diego, California-based Solar Turbines energy equipment business.
[Caterpillar Chief Executive Doug Oberhelman speaks to Capitol Intelligence/CI MENA using CI Glass at Export-Import Bank of the United States Annual Conference. Washington, DC. April 24, 2015]
Speaking with Capitol Intelligence at the US Export-Import Bank Annual Conference in Washington, DC, Caterpillar Chief Executive Doug Oberhelman said the company is looking for further expansion opportunities in North Africa and sub-Saharan Africa and the EX-IM Bank plays a critical role in the company’s planned expansion in these early growth markets. Caterpillar is also rumored to be eyeing agriculture M&A acquisitions in the Polish/Ukrainian market.
House Energy and Commerce Subcommittee member Rep. Adam Kinzinger (R-Ill.) told Capitol Intelligence/CI Ukraine in an interview that he support the EX-IM Bank re-authorization to preserve US jobs both at Westinghouse and Boeing (NYSE:BA).
[US Congressman and Energy and Commerce Committee Member Adam Kinzinger (R-IL) speaks to Capitol Intelligence/BBN using CI Glass at the The Hill newspaper’s America’s Nuclear Energy Future event. Washington, DC. June 2, 2015]
Kinzinger, an Air Force veteran, has taken an unusually brave position in supporting EX-IM Bank while many of Kinzinger’s fellow freshman Republicans in the House oppose the banks re-authorization.
Representative Frank Lucas, who serves on Financial Service and Agriculture Committees, also said that the non re-authorization of EX-IM Bank is not a realistic solution.
[US House Financial Services and Agriculture Committee Member Frank Lucas (R-OK) speaks to Capitol Intelligence/BBN using CI Glass at Export-Import Bank of the United States Annual Conference. Washington, DC. April 24, 2015]
The failure to reauthorize the EX-IM Bank could lead to Boeing losing a contract to supply up to 20 wide-body aircraft to South Africa Airlines, a Boeing source said. The source said SAA has held up deciding on whether to order the planes from Boeing or Airbus based on whether the US Congress reauthorizes the EX-IM Bank.
An Airbus source said that the failure for Congress would mean an easy win for Airbus as the SAA will not go ahead with the order without government financing through a state sanctioned export guarantee institution.
Dubai, UAE-based Emirates President Sir Tim Clark said that the Gulf airline has helped maintain more than 400,000 jobs in the United States through its order of new Boeing aircraft.
[Emirates Airline President Sir Tim Clark speaks to Capitol Intelligence/CI MENA using CI Glass on US Export-Import Bank re-authorization at National Press Club. Washington, DC. June 30, 2015]
Speaking to Capitol Intelligence/BBN at news conference on June 30, 2015 at the National Press Club, Emirates President Sir Tim Clark said the the non re-authorization of the EX-IM Bank makes no economic sense.
He noted that Emirates, along with Abu Dhabi-based Etihad and Doha-based Qatar Airways, almost single-handily kept Boeing’s 777 wide body aircraft program afloat.
In fact, US legacy carriers such as Delta Air Lines (NYSE DAL), United Airlines (NYSE:UAL) and American Airlines (NASDAQ:AAL) have joined in opposing the re-authorization of EX-IM Bank, claiming that the bank unfairly subsidizes the purchase of Boeing Aircraft by international competitors such as Emirates and Etihad.
Sir Tim Clark held a news conference at the National Press Club of Washington, DC to refute charges made against Gulf carriers at an earlier joint appearance by United Airlines CEO Jeff Smisek; AA W. Douglas Parker; and Delta CEO Richard Anderson at the same National Press Club on May 15.
[United Airlines CEO Jeff Smisek; American Airlines Group CEO W. Douglas Parker; and Delta Air Lines CEO Richard Anderson join US airline pilots unions to lobby against quality airlines Emirates, Qatar Airways and Etihad at National Press Club. May 15, 2015. Covered by Capitol Intelligence/MENA using CI Glass.]
However, the efforts of the CEOs of Delta, American and United Airlines campaign against Emirates and Etihad seems to have back-fired on the US airlines in a spectacular fashion. The fact that three top US airline CEOs joined forces with the airline pilot and flight attendant unions has triggered a Justice Department anti-trust investigation into illegal collusion between the three airlines.
Emirates Sir Tim Clark is looking at cementing Emirates’ position in the United States by potentially acquiring a 25% stake in its code share partner JetBlue (NYSE: JBLU) and/or Seattle, Washington-based Alaska Air Group (NYSE: ALK).
[Emirates Airlines President Sir Tim Clark responds to question from Capitol Intelligence/CI MENA using CI Glass on JetBlue, Alaska Air Group at National Press Club. Washington, DC. June 30, 2015]
Sir Tim Clark’s answer of “never say never” regarding acquiring a potential 25% stake in a US airline — the limit of foreign ownership in a US carrier — derives from pressing needs for a fully integrated feeder network for its US inbound flights.
However, the seeming reluctance of Emirates’ Clark to make such an acquisition follows Deutsche Lufthansa (ADR: DLAKY) nightmare experience as a minority stakeholder in JetBlue.
“Our equity partnership with JetBlue was the absolute worst of both worlds,” a Lufthansa board member said. “We had a stake but no management say in JetBlue while our valued customers were blaming us for the company’s miserable customer service and often times gross incompetence.”
Even Alaska Air Group, which is closer to Emirates full-service model, is unable to manage non-hub operations out of other airports other than its headquarters in Seattle. In the United States, the only efficient and consistently profitable airline remains low-cost travel pioneer and major Boeing aircraft client, Southwest Airlines (NYSE:LUV).
While Emirates is very wary of M&A transactions following its costly takeover of Sri Lanka, its Abu Dhabi-based competitor Etihad is very M&A driven following stake purchases in Italy’s Alitalia, German low-cost Air Berlin, and Balkan airline Air Serbia.
A financial source said that Etihad is currently monitoring three US airline for a potential stake purchase: JetBlue; San Francisco-based Virgin America (NASDAQ: VA); and ultimately Alaska Airlines.
[Boeing CEO Jim McNerney questioned by Capitol Intelligence/CI Africa using CI Glass about mega South African Airline contract at Export-Import Bank Annual Conference in Washington, DC, April 23, 2015]
By PK Semler in Washington, DC; Warsaw, Poland; and at 35,000 feet on United Airlines flight UA1665 LAX-CLE.
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