House GOP's Extremism on Ex-Im Bank Causing U.S. Manufacturer to Send Hundreds of Jobs Overseas
General Electric Co (GE.N) said on Tuesday it will move as many as 500 U.S. power turbinemanufacturing jobs to Europe and China because it can no longer access U.S. Export-Import Bank financing, reigniting a congressional battle over the suspended institution's future.
The largest U.S. industrial conglomerate said France's COFACE (COFA.PA) export agency has agreed to support some of GE's global power project bids with a new line of credit in exchange for moving production of some heavy-duty gas turbines to Belfort, France, along with 400 jobs.
U.S. facilities in Greenville, South Carolina; Schenectady, New York; and Bangor, Maine, will lose out on those jobs if GE wins the power bids, a GE spokeswoman said.
The company is bidding on $11 billion worth of international power projects that require export credit agency financing, including some in Indonesia.
The bitter fight in Congress over EXIM's future has sent businesses large and small to find alternative financing or lose business.
"If you're an export credit agency outside the U.S., you are now in the process of rolling out the red carpet to U.S. manufacturers," GE Vice Chairman John Rice told Reuters. "There are many other companies other than us that are impacted by this."
Boeing Co (BA.N), EXIM's biggest beneficiary, on Tuesday said it lost a second signed or potential satellite deal due to EXIM's lending suspension. Singapore-based satellite operator Kacific would not consider Boeing's bid on a satellite contract because a lack of EXIM financing. ABS, based in Bermuda and Hong Kong, canceled a Boeing satellite order in July.
Boeing said Tuesday uncertainty surrounding EXIM could affect future workforce decisions.
Jay Timmons, president of the National Association of Manufacturers, called GE's decision "the beginning of a tragedy in the making," noting it will ripple to suppliers, and called on lawmakers to reauthorize the bank.
New efforts are expected by EXIM's supporters in Congress to attach a renewal to government funding or transportation legislation this autumn, but no clear strategy has emerged. Meanwhile, EXIM may have to start laying off its 450 employees after its current operating budget expires on Oct. 1.
GE said the 400 new French jobs would be in addition to the 1,000 jobs that it pledged to bring to France to gain Paris' blessing for its acquisition of Alstom's (ALSO.PA) power business. Last week, GE won European Union regulatory approval for the deal, which it expects to complete by the end of 2015.
MySA.com editorial last week said House Financial Services Chairman Jeb Hensarling – who is spearheading killing the Export-Import Bank altogether – is costing a city in his district jobs. Today, Americans learn the consequences of his actions are being reflected all throughout his home state.
GE also said 100 additional jobs involved in final assembly of aeroderivative gas turbines will move next year from outside of Houston to Hungary and China…
The Export-Import Bank enjoys overwhelming bipartisan support because it supported over a million American jobs and costs nothing to taxpayers. Speaker Boehner famously said "thousands of jobs…would disappear pretty quickly" should Republicans shut down the Bank's charter. Today, that's proving correct – and local economies are feeling the impact of the GOP's failure to renew the Export-Import Bank.