General Electric to move 350 jobs to Canada to get export financing
Industrial giant pledges $265M plant to make gas-powered engines for power generation
General Electric Co. says it plans to move production of large, gas-powered engines from the U.S. to an unspecified location in Canada, to benefit from trade financing from Export Development Canada.
In an announcement geared at pressuring the U.S. Congress to fund the U.S. Import-Export Development Bank, GE said it would shut its Waukesha, Wis., plant and move 350 jobs to Canada.
GE said in a news release that it notified its U.S. employees and its local suppliers today.
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GE said it will invest $265 million in a new state-of-the-art manufacturing plant in Canada to make large piston engines generally used for compression, mechanical drive and power generation applications.
GE is winning contracts around the world, especially in emerging economies, for power generation, but its customers need the help of government-backed trade banks to get financing.
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.
Trade development agencies have been lining up for GE's business in the interim.
Export Development Canada has pledged export financing for products made in the new plant, expected to begin operations in about 20 months, GE said. The company said it has a long history of working with the EDC to export products made in Canada.
The facility can be expanded and provide flexible manufacturing capacity to support other GE businesses, including engines for railroad locomotives, GE said.
Contacted by CBC News, GE Canada said there was no further information regarding the location or the process it will use to determine where the plant is located.
GE recently expanded its cold-weather jet engine testing facility in Winnipeg, but it has plants in several other cities.
In recent weeks, GE has announced deals to expand production in the United Kingdom, France, Hungary and China, and take advantage of export credit offered in those countries.
GE vice-chairman John Rice urged Congress to restore the U.S. trade credit agency, but he expressed concern about the resignation of House of Representatives Speaker John Boehner, who has been a supporter of the U.S. Export-Import Bank.
Boehner's likely successor is House majority leader Kevin McCarthy, who has sided with opponents of the trade credit agency, calling it a form of corporate welfare.
Rice issued a press statement that clearly pointed to the link between lack of trade credit financing in the U.S. and the loss of American jobs.
"We believe in American manufacturing, but our customers in many cases require ECA financing for us to bid on projects. Without it, we cannot compete and our customers may be forced to select other providers. We know these announcements will have regrettable 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," Rice said.
With files from Reuters