General Electric Co. will move about 500 U.S. jobs
overseas to avoid losing business to foreign rivals, a decision the company
said was prompted by the lapse of the U.S. Export-Import Bank’s charter earlier
this summer. For months, GE has said that the failure to reauthorize the export
financing agency, which congressional Republicans have singled out as an
example of corporate welfare, would force the company to move jobs overseas or
risk losing contracts for turbines, power projects and other industrial
GE said Tuesday it had signed an agreement for a line of
credit for certain power projects from France’s export credit agency, Compagnie
Française d’Assurance pour le Commerce Extérieur, or Coface, which would result
in 400 jobs moving to Europe, primarily from facilities in New York, Texas,
South Carolina and Maine. It said another 100 jobs would be moved next year
from a facility outside Houston to Hungary and China to access export credit
for customers of gas turbines used in aviation.
Executives say the company is bidding on $11 billion worth
of projects, mostly in developing nations, and that bids won’t be entertained
if they aren’t sponsored by an export credit agency. GE said, for example, that
countries where such export credit agency sponsorship is required have
accounted for 80% of total sales of those aviation-related turbines over the
past three years.
Company officials said the proposal to move jobs was
entirely separate from GE’s impending purchase of the power business of
France’s Alstom SA. As part of that $17 billion acquisition, GE has
promised to add 1,000 new jobs in France, where the company already maintains a
major power turbine production facility in the town of Belfort. GE has
projected it can generate $3 billion in annual savings by consolidating the
operations of its power business and Alstom, including by closing factories and
reducing the company’s workforce.
The Export-Import Bank requires the vast majority of
production and jobs for deals that it finances to be located in the U.S., and
most other export credit agencies have similar requirements.
The 81-year-old agency stopped accepting new loans at the
beginning of July after Congress allowed its charter to expire. In July, some
64 senators voted for an amendment to reopen the bank, but conservative
Republicans who control key leadership positions have so far prevented a vote
in the House of Representatives. Critics of the bank say Washington shouldn’t
be picking winners and losers, and some have said that any hardship for
businesses is part of a necessary recalibration.
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