Congress’ failure to renew the Export-Import Bank has led General Electric to look overseas for
export credit financing, and as a result, it will cost at least 500 jobs in the
U.S.
GE announced Tuesday that it had
secured a line of credit from France’s export credit agency for global power
projects. As a result, it will move 400 heavy-duty gas turbine production jobs
to Europe. The company also will move final assembly of aeroderivatives
turbines to Hungary and China, citing the need for export credit for its
customers.
Together, these moves will lead to the loss of 500 GE jobs in New York, Texas, South
Carolina and Maine.
GE noted that the U.S. is now the only developed country in the
world that doesn’t provide export financing to its exporters, and that many of
its customers require guaranteed financing from an export credit agency.
Without Ex-Im Bank, whose authority to provide new financing
expired July 1, companies like GE must pursue financing from other countries,
the company said, which means it must move production to these countries.
“While our preference is to continue producing power generation
equipment in our best U.S. factories, without customer access to the U.S. Ex-Im
bank, we have no choice but to move our work to places that will offer export
credit financing of these projects,” said Jeff Connelly, vice president, supply
chain, for GE Power & Water.
“We do not make today’s announcements lightly, and in fact, have
done everything in our power to avoid making these moves at all, but Congress
left us no choice when it failed to reauthorize the Ex-Im Bank this summer,” he
said. “We know this will have an impact not only on our employees but on the
hundreds of U.S. suppliers we work with that cannot move their facilities, but
we cannot walk away from our customers.”
The Exporters for Ex-Im Coalition said GE’s announcement “is the
latest example of the tough decisions companies of all sizes are being forced
to make because Congress has failed to reauthorize the Ex-Im Bank.”
Unlike GE, “thousands of small businesses that rely on Ex-Im”
don’t have the option of moving work overseas “and will continue to suffer
until Congress act.”
Opponents of the Export-Import Bank consider it to be a form of
corporate welfare — they contend government shouldn’t be involved in
private-sector business deals. Plus, they note that most of the financing — at
least in terms of dollars — goes to corporate giants such as GE, Boeing and
Caterpillar.
John Engler, president of the
Business Roundtable, said he believes Congress eventually will revive the Ex-Im
Bank.
“We believe the votes are there to pass the Export-iImport bank,
both in the House and the Senate. The key is getting the vote.”
How Ex-Im Bank supporters will get that vote "is a
different question," Engler said.
http://www.bizjournals.com/bizjournals/washingtonbureau/2015/09/ge-moving-500-turbine-jobs-overseas-citing-export.html?ana=yahoo
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