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U.S. pilots, other labor unions split on Ex-Im Bank reforms

By Emily Stephenson

WASHINGTON (Reuters) - On issues ranging from minimum wage to workplace rights, labor unions often speak with one voice, but the fight within Congress over reauthorizing the U.S. Export-Import Bank has created a tricky split between airline pilots and manufacturing unions.

Democrats and some Republicans support Ex-Im, which provides loans and loan guarantees to foreign purchasers of U.S. exports. The bank's backers say it helps boost job creation.

Conservative critics, however, see the bank as an example of "crony capitalism," and a vehicle which the government uses to pick winners and losers in the private sector.

Without reauthorization, the bank, which helped finance an estimated $37.4 billion worth of U.S. exports in 2013, will have to stop lending when its charter expires on Sept. 30.

Unlike many issues where business and labor take opposing tacks, lawmakers are receiving somewhat conflicting messages from within both communities about the Ex-Im Bank.

The differences of opinion within organized labor could make it harder for Democrats who favor renewing Ex-Im to coalesce around a legislative strategy since unions are a crucial constituency for the party.

Boeing Co, one of the biggest beneficiaries of the bank, says it would see sales hurt if Ex-Im closed. Unions representing machinists and engineers have joined Boeing's push for a quick renewal with no changes to the bank.

But the chief executive of Delta Air Lines has urged new limits on the bank's financing of airplane purchases, arguing that the current export subsidies put Delta at a disadvantage compared with foreign competitors, which can reduce airline ticket prices because their borrowing costs are lower. [ID:nL2N0P51FH]

Siding with Delta, the Air Line Pilots Association International (ALPA) asked Congress on Thursday to renew the Ex-Im Bank, but bar it from financing certain aircraft sales to state-owned foreign companies that could access private capital.

"It's unfortunate with a major American manufacturing issue like this that there are some unions that are divided on it," said Matt Biggs, legislative director for the International Federation of Professional and Technical Engineers.

"If it ain't broke, don't fix it," said Biggs, whose group includes about 24,000 Boeing employees. He said the union in March brought members to speak to their lawmakers in Washington and may bring them back to lobby again later this summer.

The AFL-CIO, an umbrella labor organization that includes ALPA, wrote to lawmakers in June calling for Ex-Im Bank's renewal "without delay."

DEMOCRATS DIVIDED

Democrats generally agree that the Ex-Im Bank should be reauthorized, but they have been debating the merits of incorporating some reforms to attract Republican votes.

Proposals from both parties include letting the bank finance more coal-fired power plants abroad and lowering its lending cap. Representative David Scott, a Georgia Democrat, at a June hearing floated limits on aircraft finance.

"A lot of the proposed reforms are just ideas for death on the installment plan," said Frank Larkin, a spokesman for the International Association of Machinists and Aerospace Workers, which includes Boeing employees.

Democratic Representative Denny Heck of Washington introduced a bill that would give the bank seven more years without making major changes to the way it operates. But conservative lawmakers in the U.S. House of Representatives refuse to consider that approach.

Supporters must allow some reforms that will win over moderate Republicans, said Michael Robbins, head of government affairs at the airline pilots' union. He said their proposal to limit financing for foreign airlines would level the playing field without hurting manufacturing jobs.

"I think those who say, 'The status quo or nothing,' are really the ones who are holding the bank hostage," Robbins said.

(Reporting by Emily Stephenson; editing by G Crosse, Caren Bohan and Grant McCool)

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