- Loss of credit access was `tipping point,' Rice says
- Relocation expands on threat to shift domestic positions
General Electric Co. plans to move 350 U.S. jobs to Canada and build a manufacturing plant there as the company campaigns for congressional renewal of the Export-Import Bank.
Gas-engine work currently done in Waukesha, Wisconsin, will be shifted to a $265 million facility that could open in less than two years, GE said Monday. The move will support access to Canada’s export credit agency after Congress halted the Ex-Im Bank’s ability to offer new financing, GE said.
“We had no specific plans to do something with this facility, but it became clear as we saw the difficulty that Congress was going to have in reauthorizing Ex-Im” that the decision was necessary, Vice Chairman John Rice said in a telephone interview. “In many respects Ex-Im was the tipping point. We had to do some things to give ourselves more access to export credit financing.”
The shift expanded on GE’s threat to relocate work outside the U.S. after the June 30 expiration of the bank’s charter. The Ex-Im Bank provided almost $1 billion of credit assistance last year to international customers for Fairfield, Connecticut-based GE.
While more than half of GE’s 305,000-person workforce was outside the U.S. at the end of 2014, the loss of domestic jobs is a sensitive political issue. GE said Sept. 15 it would move as many as 500 U.S. positions in its power generation business to Europe and China, and said 2,000 spots may be added overseas as a result of a U.K. financing deal and expansion in its aircraft-engine unit.
The 81-year-old Ex-Im Bank provides loans and credit guarantees to support overseas sales by U.S. companies including GE and Boeing Co. It became a target this year of some conservative congressional Republicans who say the agency helps large corporations that don’t need government assistance.
GE is currently competing for $11 billion of potential orders that require export financing, Rice said.
GE said it has notified suppliers about its plans for the Waukesha plant. While about 200 engineering jobs will remain in that location, the manufacturing positions will move even if Congress revives Ex-Im, Rice said.
“We would not change any of the announcements that we’ve made in the last couple of weeks,” Rice said. “You’ve got long-term ramifications from this.”