GE moving 500 jobs overseas to get credit financing
Industrial giant says lapse of U.S. Export-Import Bank hurts its prospects in bidding overseas
General Electric Co. has announced it will move about 500 U.S. jobs overseas because it can no longer get credit financing from the U.S. Export-Import Bank.
Instead, GE is looking for export financing from government-backed agencies in France, Hungary and China and that means moving jobs into those jurisdictions.
The Republican-controlled Congress has blocked new funding for the U.S. Export-Import Bank. The federal credit agency stopped accepting new loans at the beginning after Congress allowed its charter to expire on July 1.
The agency has been criticized as corporate welfare.
But GE says the U.S. is the only major economy now without a foreign credit financing agency and it has been forced to look overseas for financing that cannot be obtained from banks.
It will move about 400 jobs and create a centre of excellence for 50-hertz heavy duty gas turbines in Belfort, France after Compagnie Française d'Assurance pour le Commerce Extérieur, or Coface extended financing.
That will allow GE to complete deals for power projects around the world, including Indonesia.
GE says it is bidding on about $11 billion in projects around the world, but its customers often need guaranteed financing from an ECA in order to submit a bid.
"Our customers rely on export credit agencies, like U.S. Ex-Im, to finance their critical power projects," said Jeff Connelly, vice president for GE Power & Water.
He urged Congress to reinstate funding for the Ex-Im Bank.
"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."
Another 100 jobs packaging the aeroderivative gas turbine product line will be moved to Hungary and China in 2016.
The 500 jobs will be moved from plants in Texas, South Carolina, Maine and New York. When the Ex-Im Bank provided funding for foreign projects, it demanded that jobs remain in the U.S.