Trade Winds in the Sunshine Economy
Nobody would give Ian MacDonald a job when he came to Fort Lauderdale more than 30 years ago, so he says he started a company.
MacDonald was born in England, raised in Nigeria and now runs a company that makes underwater lights for boats. Today, he has 11 employees, nine of whom are based in Fort Lauderdale. The combination sales office, showroom, and assembly area is in a small industrial park cradled in the northeast corner of the I-95/ I-595 exchange.
MacDonald’s company is called Underwater Lights USA, though it's better known in the marine industry for its brand Sea Vision. It designs and assembles lights that go below the waterline in boats and yachts.
These lights shine out into the water. It can be a beautiful, ghostly effect, visually setting a boat off from the infinite blackness of water beyond.
It’s not all that different than the uncertainty MacDonald sees for his business beyond the shores of the United States. About 25 percent of Sea Vision’s business is overseas, and that business has been tough to come by.
"Internationally, it's very unstable at the moment," he said. "There's a lot of uncertainty in Europe, Turkey. Central and South America are very difficult to do business with now."
Exports out of South Florida’s seaports and airports have been falling for three years. About $55 billion dollars worth of stuff flowed through South Florida on its way to the rest of the world in 2015. That’s a lot of aircraft parts, cell phones and medical supplies. It’s even cotton, perfumes and vaccines. Sometimes the stuff is made here. Often it comes here only to be shipped out or flown out to overseas customers.
The value of all those exports has been falling for three years now. There are lots of reasons why; A strong American dollar against international currencies makes Made the USA products more expensive for foreign buyers. Weaker foreign economies, especially in Latin America. And for five months last year, the government agency that acts an an insurance policy for U-S companies selling to foreign buyers was essentially out of business.
"No new loans. No new authorizations. No new insurance," said Export-Import Bank Chairman and President Fred Hochberg during a recent stop in Miami. "It really had an impact on American business."
Luis Arguello figures he lost about $3 million of revenue during the five months the ExIm Bank wasn't allowed to do business. Arguello runs DemeTech Corp. in Miami Lakes. The company makes surgical sutures and scalpel blades. DemeTech buys insurance from the ExIm Bank when it sells its products to foreign buyers. The insurance guarantees DemeTech will get paid even if the overseas customer doesn't pay.
Our revenues were hurt. Our profits were hurt. - Luis Arguello, CEO, DemeTech
"Our revenues were hurt. Our profits were hurt," Arguello said last week before he left for a medical supplies industry sales conference in Dubai. "We should have hired more employees in 2015 than in 2014. That definitely did not happen."
Ian MacDonald at Underwater Lights USA said he was willing to walk away from a $50,000 order for marine lights from a new Italian yacht builder unless he was able to buy the insurance from the ExIm Bank.
By December, the bank was reauthorized with bipartisan support from Congress, breaking the gridlock that had kept the bank out of the export financing business since July.
"Everybody is fighting tooth and nail for every single sale," said Hochberg. "So if we don't make the sale because a small business here in South Florida doesn't have the backing, their competitor in Germany or Korea or Japan is more than happy to do that."