16 July 2020

General Electric Moves 500 US Jobs Overseas

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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 equipment.

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.

Click here to access the full article on The Wall Street Journal.

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