Ex-Im $32 million loan guarantee to Brazilian company supported 250 American jobs for … three days

posted at 1:21 pm on August 17, 2012 by Ed Morrissey

The Washington Free Beacon’s CJ Ciaramella made a great catch on this story, which exemplifies the ludicrous nature of government interventions into markets they don’t understand, in order to make claims they can’t possibly keep.  It starts with a PR announcement on August 3rd, apparently by the Export-Import Bank of the United States, heralding a $32 million loan guarantee to Brazilian firm Wind Power Energia.  The loan, which applied to efforts to sell wind-turbine blades to Brazil, would safeguard 250 American jobs at LM Wind Power Blades Inc of Little Rock, Arkansas:

In line with its congressional mandate to increase support for renewable-energy exports, the Export-Import Bank of the United States (Ex-Im Bank) has authorized a $32.1 million loan guarantee to Wind Power Energia S.A. of Sao Paulo, Brazil, for the purchase of wind turbine blades manufactured by LM Wind Power Blades Inc. of Little Rock, Ark.

Ex-Im Bank’s financing, which guarantees a Bank of America loan, will support approximately 250 permanent American jobs at the company’s Little Rock, Ark., and Grand Forks, N.D., manufacturing facilities.

“The Bank’s loan guarantee will facilitate the export of American-made products to one of our nine key markets at a critical time,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “By doing so, it will simultaneously support American jobs in a valuable industry and boost Brazil’s clean-energy prospects.”

The wind blades will be used to complete a 180-megawatt wind farm in the Brazilian state of Bahia and another 211-megawatt farm in the Brazilian state of Ceara.

LM Wind Power of … Little Rock, Arkansas?  Not exactly; as Ciaramella discovered, that’s just a field office.  The firm is actually headquartered in Kolding, Denmark.

Anyway, August 3rd was a Friday.  By the following Monday, those 250 by-gum-guaranteed jobs turned into 234 layoffs:

Wind turbine blade manufacturer LM Wind Power has announced that it is laying off 94 employees and 140 temporary workers at its Little Rock, Ark., manufacturing facility.

The company cited the U.S. government’s failure to extend the wind energy production tax credit (PTC) as the reason for the layoffs.

Wait a minute!  Did Congress pass a bill on the Saturday or Sunday to block the extension of the PTC?  Did those dastardly politicians sandbag the Ex-Im Bank?  Nope.  The decision not to extend the PTC took place in February.  The language was part of the payroll-tax extension bill that finally got finished after a couple of months of brinksmanship between House Republicans and the Obama administration:

Hopes that a near-term extension of the production tax credit (PTC) for wind power would be included in legislation to extend the payroll tax cuts through the remainder of this year are nearly extinguished, as NAW has learned that congressional leaders have reached a tentative framework agreement on the payroll tax cut – but it does not contain a PTC extension.

A House-Senate conference committee is expected to approve the deal, which will then go to the House and Senate as soon as today. Sources, who wished to remain anonymous, told NAW that both legislative bodies are expected to quickly sign the measure before congressional leaders depart for the President’s Day recess that begins Feb. 20.

The omnibus bill extends the payroll-tax holiday and unemployment insurance through the end of the year and allows doctors to fully claim Medicare reimbursements – a measure that addresses the so-called “doc-fix.” Those provisions would be paid for with reductions elsewhere in the budget.

However, the bill does not include tax extenders such as the PTC, which, for wind power, expires at the end of this year.

In other words, LMWP knew for months about the PTC tax extension issue [see update below].  Did anyone at the Ex-Im Bank know about it?  Did they bother to research LMWP’s fiscal footing before issuing a $32 million loan guarantee?  Apparently not.

Nor is that the only problem that LMWP had with the government, Ciaramella reports:

When LM Wind Power came to Little Rock, Arkansas, in 2007, it said it would employ 1,000 people by 2012. But the global economic crunch led to diminishing demand. Three months before its loan guarantee was finalized, LM Wind Power announced its profits had fallen 41 percent last year.

LM Wind Power also has had numerous citations for workplace safety violations. The Department Of Labor’s Occupational Safety and Health Administration cited the firm 11 times in an investigation beginning October 2010 for exposing workers to unsafe conditions and noted the company had demonstrated a “continued pattern of failing to comply” with OSHA standards.

In 2010, LM Wind Power Blades was cited with OSHA violations because of conditions that killed a worker.

Terrific.  Just the kind of company that deserves a $32 million bet.

So let’s recap: The government-backed Ex-Im Bank gave a Brazilian company $32 million to buy wind-turbine blades from a Danish company to protect 25o American jobs for … a weekend.  That’s $42,666 per job per day saved.  Nothing like government to make efficient use of capital, eh?

Update: As Scott Lincicome clarifies, the PTC is still in effect; the bill just didn’t extend it past 2012:

He also e-mailed me:

HI Ed,

I saw your story on the Ex-Im fiasco, but I think one point might be wrong.  The wind PTC is still in effect and will expire at the end of the year (see, e.g., here: http://awea.org/issues/federal_policy/upload/PTC-Fact-Sheet.pdf).  Senate Finance just approved a tax extenders bill – with wide bipartisan support – that included the PTC extension (at a cost of $12B over 10 years! – ), but it’s not clear whether it’ll survive the House/Senate conference (or even a full Senate vote).  Big Wind is citing to that uncertainty – rather than their uncompetitive product, of course – as the reason for all these layoffs.  I’m actually writing a paper about US subsidies so have been tracking this one pretty closely (and tweeting abt it: https://fr.twitter.com/scottlincicome/status/231360613337673728). Hope this helps.

Best,

SL

Also, I had the loan transaction backwards.  The Ex-Im Bank gave the loan guarantee to the Brazilian company to buy wind turbine blades from the Danish company to save 250 American jobs for a whole weekend.  If you find this confusing … welcome to reality.  I’ve edited the headline and the post to reflect that change.


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Yaaaawwwwnnnn! More money laundering to the marxist’s re-election campaign.

bgibbs1000 on August 17, 2012 at 1:23 PM

OT: I love that pic so much. I laugh every time I see it.

Weight of Glory on August 17, 2012 at 1:24 PM

Status quo for this administration.

Status quo for the mainstream media means this will get zero coverage.

natasha333 on August 17, 2012 at 1:24 PM

we’re more comfortable with Obama wielding this sort of power because he seems a hell of a lot more effective and responsible with it.

urban elitist on February 8, 2012

Bishop on August 17, 2012 at 1:24 PM

You missed the point entirely.
The question is not how many jobs it created.
It’s how many votes did it get?

LeftCoastRight on August 17, 2012 at 1:25 PM

VENTURE $OCIALI$M FOR THE WINZ!!!!!

BOOM!

harlekwin15 on August 17, 2012 at 1:26 PM

Schweet! Had I held one of those jobs early retirement would have been Fine.

Bmore on August 17, 2012 at 1:26 PM

Where is that picture from? The woman’s eyes are hilarious.

hawkdriver on August 17, 2012 at 1:26 PM

LOOK OVER THERE… SEAMUS ON THE CAR ROOF!

Marcola on August 17, 2012 at 1:27 PM

Not exactly; … that’s just a field office. The firm is actually headquartered in Kolding, Denmark.

Obama people are business and economics illiterates. They don’t know a spreadsheet from a bed sheet, headquarters from hind quarters, a field office from a feeled orifice.

petefrt on August 17, 2012 at 1:28 PM

You missed the point entirely.
The question is not how many jobs it created.
It’s how many votes did it get?

LeftCoastRight on August 17, 2012 at 1:25 PM

This

But, but, dogs, and returns, and chains!!

I shouldn’t be surprised…I’m not surprised…

Just *speechless*

Sue Doenim on August 17, 2012 at 1:28 PM

That’s one big Prune Danish.

Drained Brain on August 17, 2012 at 1:28 PM

Need that South Park meme…

“Created a bunch of new jobs…”

“AAAAAAAAAAND IT’S GONE”

The Rogue Tomato on August 17, 2012 at 1:29 PM

OT: I love that pic so much. I laugh every time I see it.

Weight of Glory on August 17, 2012 at 1:24 PM

Ditto. The best evah.

Its gold, Jerry. Gold.

FlaMurph on August 17, 2012 at 1:29 PM

Obama people are business and economics illiterates. They don’t know a spreadsheet from a bed sheet, headquarters from hind quarters, a field office from a feeled orifice.

petefrt on August 17, 2012 at 1:28 PM

LOL YES!!

I’m going to keep this one :)

Sue Doenim on August 17, 2012 at 1:29 PM

The woman’s eyes are hilarious.

hawkdriver on August 17, 2012 at 1:26 PM

It’s like she’s looking right into my very soul. I love her.

CurtZHP on August 17, 2012 at 1:30 PM

Brayam: “Success”!!!!

CW on August 17, 2012 at 1:30 PM

Now you understand why the Seamus jokes are so important for obozo….there’s so much profligacy and incompetence to mask, poor Seamus might need a sibling or two to help 0 make his pitch…

jimver on August 17, 2012 at 1:32 PM

“I want 4 more years of this!” -Average Lefty

visions on August 17, 2012 at 1:32 PM

Did this girl in the photo ever get treatment??

ToddPA on August 17, 2012 at 1:33 PM

Well, they can’t always pick winners.

a capella on August 17, 2012 at 1:33 PM

That woman in the pic is priceless.

John the Libertarian on August 17, 2012 at 1:34 PM

Key themes are developing to attack in ads. Billions of stimulus $ went to foreign firms. Why is this? Has O taken it upon himself to be the savior of the world economy? Impossible and idiotic, but it consistent with the notion that o is interested in redistribution of wealth from us to them (astounding), and he considers himself first and foremost part of a global community, not an American per se.
The other things is the huge amount of $ that went to friends and campaign contributors. This is criminal. Make an ad squawk about it. The latest I hear makes another double play for us (suggesting that O is foreign oriented and devoted to enriching$ friends) is this:

Biden’s ‘good friend,’ donor receives $20M federal loan to open foreign luxury car dealership (in the Ukraine).

anotherJoe on August 17, 2012 at 1:35 PM

$32 million? They carry that in their coin pocket.

hillsoftx on August 17, 2012 at 1:36 PM

Well, I sure hope that the spouses of those former employees stay healthy – I’d hate to think that the Director of the Ex-Im could be liable for their failing health.

Hill60 on August 17, 2012 at 1:36 PM

OT: I love that pic so much. I laugh every time I see it.

Weight of Glory on August 17, 2012 at 1:24 PM

Same here. It never gets old.

txsurveyor on August 17, 2012 at 1:37 PM

The pic is from a Duke basketball game.

LtGenRob on August 17, 2012 at 1:37 PM

http://dailycaller.com/2012/08/17/bidens-good-friend-donor-receives-20m-federal-loan/

250 American jobs for 3 days is better than this job creation in the UK, Germany and the Ukraine.

bayview on August 17, 2012 at 1:38 PM

The Left (including those of you who qualify on this website)
should take this article and engage your more Conservative
aquaintances. Simply say “see, you don’t want a Republican
Administration to pizz away taxpayer dollars…

..leave that to the Professionals.”

ToddPA on August 17, 2012 at 1:39 PM

In 2010, LM Wind Power Blades was cited with OSHA violations because of conditions that killed a worker.

Oh, well, hey, did you hear about that lady that died of cancer CANCER because of what Mitt Romney did????

baaaaaaad/

ted c on August 17, 2012 at 1:39 PM

So which of 0′s donors/bundlers profited from this?

Follow the money!

iurockhead on August 17, 2012 at 1:46 PM

Time to invade Denmark and take back what is ours. We should also go spank (and loot) Finland for stealing our tax dollars to make that damned karma car. It’s time to use our big stick to remind the world who we are and to teach them to keep their avaricious hands off our hard-earned wealth.

TXJenny on August 17, 2012 at 1:47 PM

anotherJoe on August 17, 2012 at 1:35 PM

This.

Romneys people need to compile a list of where all the stimulus money went, the outcome of it, and they need to highlight the foreign destinations of the money. A 30-second add with a brief description, with a website named on the ad where ALL the details can be found. And site the sources.

Get busy, folks……..

iurockhead on August 17, 2012 at 1:51 PM

So let’s recap: The government-backed Ex-Im Bank gave a Danish company $32 million to sell wind-turbine blades to Brazil to protect 25o American jobs for … a weekend. That’s $42,666 per job per day saved. Nothing like government to make efficient use of capital, eh?

No, the loan guarantee was to the Brazilian company that is supposed to purchase the blades from the Danish company with a field office in Arkansas.

If we’re going to assume the government will be paying for a default, you need to look to the financials of the Brazilian company that got the loan. Not the company they’re supposed to be buying from.

I’m against this form of government intrusion, but let’s not get things twisted.

ButterflyDragon on August 17, 2012 at 1:51 PM

So how much did this company “donate” to the Obama Re-election campaign?

GarandFan on August 17, 2012 at 1:51 PM

Even your headline is wrong Ed.

ButterflyDragon on August 17, 2012 at 1:55 PM

As others have posted on that picture, does anyone know who/what this is about? It looks as if they are before a dc hearing and not liking the questions or results of the questions. That gal is golden!
L

letget on August 17, 2012 at 1:55 PM

OT ( BUT VERY IMPORTANT)

Ladies….its HERE …. the PAUL RYAN TOPLESS PHOTO !

thatsafactjack on August 17, 2012 at 1:57 PM

… and I wonder who functionally owns that company, hmmm?

Midas on August 17, 2012 at 1:59 PM

OT/ New ad from the RNC – stupid interviews:

http://www.therightscoop.com/brutal-new-rnc-ad-slams-obama-for-giving-patsy-interviews-while-america-suffers-under-his-policies/

Cody1991 on August 17, 2012 at 1:52 PM

Make it a series. Romney talking to his whiteboard; Obama answering “red or green”

lorien1973 on August 17, 2012 at 1:59 PM

This is the dook bench’s reaction to getting dunked on by a Tar Heel.

Mr. Wednesday Night on August 17, 2012 at 2:01 PM

So let’s recap: The government-backed Ex-Im Bank gave a Danish company $32 million to sell wind-turbine blades to Brazil to protect 25o American jobs for … a weekend. That’s $42,666 per job per day saved. Nothing like government to make efficient use of capital, eh?

How’s that old quote go? Put the government in charge of the Sahara and within a week they would run out of sand…

SWalker on August 17, 2012 at 2:02 PM

Ha! You’re going to love this …

The principle shareholder of LM Wind Power is the British Private Equity Management Company, Doughty Hanson & Co, three principals of which are members of the Board of Directors on LM Wind Power.

So, Obama is off-shoring to private equity firms now.

Dusty on August 17, 2012 at 2:04 PM

Wait…. Obama is OUTSOURCING JOBS!!!!!

faraway on August 17, 2012 at 2:06 PM

In line with its congressional mandate to increase support for renewable-energy exports, the Export-Import Bank of the United States (Ex-Im Bank) has authorized a $32.1 million loan guarantee to Wind Power Energia S.A. of Sao Paulo, Brazil,

That is about $130,000 per “job created.”

Assuming the Brazilian firm defaults, which going by the recent track record of green energy financing is likely, they should have just given the $32,000,000 to the Danish company to keep the workers on the payroll for a couple of years.

They could dig holes on even numbered days and fill them in on odd numbered days. At least that would make this enterprise more productive and less destructive than the majority of the green energy schemes Mr. Obama and is ilk have concocted.

Steven Chu and Barack Obama both won Nobel Prizes. What the heck did we ever do to the Scandinavians to make them hate us so?

MessesWithTexas on August 17, 2012 at 2:06 PM

If this were a movie plot, it would be unbelievable. When we find out its been laundered to an off-shore account for Obama and Co. then it’ll be believable.

ManWithNoName on August 17, 2012 at 2:06 PM

Make it a series. Romney talking to his whiteboard; Obama answering “red or green”

lorien1973 on August 17, 2012 at 1:59 PM

I’d like to see some ads using his ‘laser focus on jobs’ quote while he’s out golfing, fundraising, entertaining celebs, vacationing, etc.

And I don’t know about anyone else, but that picture of BO with his feet on the desk in the Oval Office puts me in a rage. They should use that photo often because plenty of people probably react the same way. What a lazy, worthless POS.

Cody1991 on August 17, 2012 at 2:10 PM

ManWithNoName on August 17, 2012 at 2:06 PM

I’m guessing this is not so much Obama as it is the Clintons. The company’s office was Little Rock, Ark, and was set up in 2007, when Clinton appeared to have a lock on the nomination.

If one had access to private records one would probably find LM Wind Power connections to the William J Clinton Foundation and Clinton connections to Doughty Hanson & Co.

No doubt, however, the Chicago Team has skimmed a % somehow.

Dusty on August 17, 2012 at 2:14 PM

THE DEMOCRAT PARTY-ONE BIG PONZI SCHEME.

ToddPA on August 17, 2012 at 2:14 PM

THE DEMOCRAT PARTY-ONE BIG PONZI SCHEME.

ToddPA on August 17, 2012 at 2:14 PM

Yippers.

GrannyDee on August 17, 2012 at 2:25 PM

This is the dook bench’s reaction to getting dunked on by a Tar Heel.

Mr. Wednesday Night on August 17, 2012 at 2:01 PM

How is that academic thing going in Chapel Hole these days?

bgibbs1000 on August 17, 2012 at 2:25 PM

Trickle down Socialism.

OxyCon on August 17, 2012 at 2:30 PM

Status quo for this administration.

Status quo for the mainstream media means this will get zero coverage.

natasha333 on August 17, 2012 at 1:24 PM

Apparently, according to the looney left Marxists, there are many definitions of “status quo”
Status quo in healthcare = unacceptable (need to change it or people will die!!!)
Status quo in Medicare = acceptable (need to keep it the same or people will die!!!!)

Liberal logic is funny…

Strike Hornet on August 17, 2012 at 3:21 PM

This is the dook bench’s reaction to getting dunked on by a Tar Heel. Mr. Wednesday Night on August 17, 2012 at 2:01 PM

That’s all?

Looks more like some dookie dunked it into his own goal to get that reaction.

Akzed on August 17, 2012 at 3:56 PM

as planned. all this stimulus and investment BS from the gay man child in the white house has been nothing but cronyism and theft. and all the rank and file ignoramuses that comprise the Democrat party oooh and ahhh about saving the economy and planet and whatever the BS of the day is. it is dumbfounding

tom daschle concerned on August 17, 2012 at 4:05 PM

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largess out of the public treasury.”

BobMbx on August 17, 2012 at 8:00 PM