General Electric on Tuesday announced that it plans to send 500 jobs overseas, a move the industrial giant said is necessary because Congress allowed the charter for the Export-Import Bank to expire earlier this year.
As a result, GE said it’s moving jobs from Texas, South Carolina and Maine to France, Hungary and China.
GE also said 100 additional final assembly jobs for smaller turbine generator sets derived from aircraft engines will move next year from outside Houston to Hungary and China.
GE said it was required to show proof of financing from a governmental export credit agency in order to bid on the power turbine business, which meant it could not work with a USA commercial bank.
“In a competitive world, we are left with no choice but to invest in non-U.S. manufacturing and move production to countries that support high-tech exports”, John Rice, vice chairman at GE, said in a statement on Tuesday.
Many other countries have their own version of the Ex-Im bank to help finance exports from their manufacturers.
Many credit export agencies, or ECAs, require companies that benefit from its financing to have significant operations in the region where the ECA is based, which is why the shutdown of Ex-Im in the United States is prompting USA companies to consider moving jobs overseas. The Texas Republican is chairman of the House Financial Services Committee.
“Let me be clear: The sole reason this work can not be performed in Schenectady is that House Republicans have failed to renew the Export-Import Bank”, said Rep. Paul Tonko (D-N.Y.), whose district will also be affected by GE’s move. That is a government crediting agency some House Republicans say US corporations could do without.
“Most companies base important decisions like this on low taxes, a skilled workforce, a fair legal system and quality of life, which is why everyone knows there is no better state to do business in than Texas,”said Hensarling press secretary Jeff Emerson”.
But Boehner, mindful of his party’s strong conservative faction, has said little about his intentions for EXIM’s future, even though he has backed the bank in the past.
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. USA taxpayers would be responsible for a loan if a company operating overseas defaults on a bank loan used to buy a product made by a US company.
The company announced that it will move US power turbine manufacturing jobs to Europe and China due to a financing problem caused by Congress. The bank is not immediately closed, however it cannot take on new business.
“Since its authority lapsed in July, Congress’s failure to reauthorize Ex-Im Bank has already resulted in USA companies losing global sales and puts hundreds of thousands of U.S. jobs at risk”, they said.