General Electric Co (NYSE:GE) said on Tuesday that it will move 500 U.S. power turbine manufacturing jobs to Europe and China because it can no longer access U.S. Export-Import Bank financing after Congress allowed the agency's charter to lapse in June.
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GE said that France's COFACE export agency has agreed to support some of the industrial giant's global power project bids with a new line of credit in exchange for moving production of 50-hertz heavy duty gas turbines to Belfort, France, along with 400 jobs. GE also said in a statement that 100 additional jobs will move from the United States to Hungary and China.
The company said it is now bidding on $11 billion worth of international power projects that require export credit agency financing, including some in Indonesia.
The U.S. jobs will be moved from facilities in South Carolina, New York, Texas and Maine, but no U.S. facility will close, a GE spokeswoman said.
GE Vice Chairman John Rice said the company would soon announce agreements with other foreign export credit agencies to finance GE products.
"If the EXIM bank were open, it would be business as usual," GE Vice Chairman John Rice told Reuters in a telephone interview.
Given the bitter fight in Congress over EXIM's future, Rice said that GE cannot afford to wait and must make other long-term financing arrangements for large industrial projects.
"If EXIM isn't going to happen, or it's going to be a regular fight to be reauthorized, we've got to make other plans," he said.
Conservative Republicans in Congress who say that EXIM represents "corporate welfare" and "crony capitalism" successfully blocked renewal of the 81-year-old export credit agency's charter at the end of June.
EXIM supporters have thus far been unsuccessful in attaching renewal to other legislation, but new efforts are expected to be made this autumn as Congress considers government "must-pass" agency funding, a transportation bill and an increase in the federal debt limit.
GE last year vowed to add 1,000 jobs in France to gain the blessing of the French government for the U.S. conglomerate’s acquisition of the power business of France’s Alstom. GE won European regulatory approval for the deal last week, and expects it to close by the end of the year.
GE is also seeking to wring out $3 billion in cost savings as it combines with Alstom, including by reducing overlap and consolidating manufacturing operations.
In its statement, GE said the job move "reinforces the need for Congress to promptly reauthorize the U.S. Export-Import Bank."
Aerospace giant Boeing Co (NYSE:BA) has also said it was considering moving work overseas due to uncertainty over the future of the EXIM bank.
(Additional reporting by Lewis Krauskopf in New York; Editing by Eric Walsh)