Why Boeing and Delta are dueling over the Ex-Im bank
Delta airlines goes head-to-head with Boeing over the reauthorization of the Export-Import bank, which they argue will harm U.S. airlines.
You'd think a giant company that buys planes would have a half-decent relationship with a giant company that makes planes. And, for the most part, Delta and Boeing have been business buddies over the years. But now, these two big guns of American aviation are lined up on opposite sides of one of the biggest policy fights rocking Congress: The debate over the Export-Import bank.
Big companies tend to get their way in Washington because opponents are usually weak. Think Wall Street versus Main Street, or cable companies against subscribers. Those aren’t real boxing matches, they're more like Mike Tyson fighting your Uncle Stewart. But Boeing versus Delta is a real matchup, and it has observers in politics and business riveted.
Among other things, the Ex-Im bank uses American tax money to help foreign airlines buy Boeing planes. Those airlines are Delta’s competitors, and Delta doesn’t like the idea of American money going to them. Recently Delta’s CEO testified on Capitol Hill, flanked by uniformed pilots and flight attendants, to say this practice should stop.
Boeing says the Ex-Im Bank helps Boeing compete internationally and create more American jobs. And the company has benefited for a long time from the Ex-Im Bank's support. But now, with Delta in the ring and Ex-Im Bank skeptics gaining power in Congress, Boeing’s long and cushy ride with the Bank is encountering some turbulence.
Mark Garrison: Big companies tend to get their way in Congress because opponents are usually weak. Wall Street versus Main Street. Cable companies against subscribers. Those aren’t real matches. That’s like Mike Tyson fighting your Uncle Stewart. But Boeing versus Delta, that’s a fight.
Richard Anderson: I have a about 100 Delta employees here with me that have my back today.
That’s Delta CEO Richard Anderson testifying on the Hill, flanked by uniformed pilots and flight attendants.
Anderson: I’m here to talk about their jobs, because the Ex-Im Bank takes their jobs.
Anderson’s talking about the Export-Import Bank. And he’s angry because Boeing has long gotten what it wants from the Bank, which, among other things, uses American tax money to help foreign airlines buy Boeing planes. And those are Delta’s competitors. The airline doesn’t like the idea of American money going to them.
Veronique de Rugy: It puts a face on the usually unseen victims of these government deals.
Veronique de Rugy is senior fellow at the Mercatus Center, and thinks of the Ex-Im Bank as corporate welfare. In aviation or any industry, when equally powerful companies face off, the outcome’s hard to predict, totally different than when a whole industry goes up against a set of regulations. Tom Tacker is an economics professor at Embry–Riddle Aeronautical University.
Tom Tacker: I think it’s a big deal and it does make it more interesting.
It also puts the debate in the public eye. That matters, says UNC political scientist Frank Baumgartner.
Frank Baumgartner: In the fights that aren’t fair, nobody even knows about them. They’re done within the boardrooms or the committee rooms without any fanfare and the status quo remains what it is.
But with Delta in the ring and skeptics in Congress, Boeing’s long and cushy ride with the Ex-Im Bank is hitting unusual turbulence. I'm Mark Garrison, for Marketplace.