No Ex-Im bank, so GE says it may move jobs overseas
Washington – General Electric announced Tuesday that it may move about 500 U.S. jobs to France, Hungary and China because of Congress’s failure to extend the charter of the Export-Import Bank. It is an issue that could also influence the Connecticut-based company’s search for a new headquarters.
Tuesday the company said it is bidding on $11 billion in projects that require export financing and has reached an agreement with the French export credit agency (COFACE) to provide a line of credit.
The company also said that, in order to access export credit for customers of its aero-derivatives turbines, GE will move its final assembly from the United States to Hungary and China.
“As related projects are bid and won in these two product lines, GE will move approximately 500 jobs from Texas, South Carolina, Maine and New York to France, Hungary and China,” the company said.
“The U.S. remains the only major economy in the world without an Export Bank,” GE said.
Opposed by many Republicans as “corporate welfare,” the bank’s charter expired on June 30.
One Republican who led the move to allow the bank’s charter to expire was Rep. Jeb Hensarling, R-Texas, head of the House Financial Services Committee. Hensarling represents Dallas, a city often cited as a competitor to Fairfield as a potential home for GE’s corporate headquarters.
Decrying Connecticut’s new taxes on corporations, GE said in June that it has formed a search committee to find a “more pro-business” climate for the headquarters. GE CEO Jeffrey Immelt told CNBC last week he’d make a decision this year.
GE has repeatedly declined comment on its search for a new headquarters.
But many “pro-business” states with low corporate taxes are home to some of GE’s Republican foes in the Ex-Im Bank fight, like Hensarling, who derided the bank’s services as unfair subsidies to rich corporations.
“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 if they are really basing their decision on the fact that members of the state’s congressional delegation are opposed to one small federal agency, then they are going to have to bypass pretty much every state, including Georgia.”
Atlanta has also been cited as a possible site for GE’s headquarters. But Georgia is home to Rep. Tom Price, the chairman of the House Budget Committee, and other GOP lawmakers who opposed the reauthorization of the bank’s charter.
The Ex-Im bank was created by former President Franklin Delano Roosevelt in 1934 to close gaps in sales of U.S. goods to buyers overseas when private lenders are unable or unwilling to take on the financial risk.
Before it’s charter ran out, the bank helped American companies in several ways.
It had the ability to make direct loans, but usually guaranteed low interest commercial loans to the foreign customers of U.S. companies.
The Export-Import Bank also provided insurance to U.S. companies against the risk of non-payment by a foreign customer and provided short-term loans to U.S. companies that are growing exporters.
On Tuesday, the National Association of Manufacturers reacted to GE’s announcement that it may move hundreds of jobs overseas.
“These American jobs losses are a direct result of the failure of Congress to act on Ex-Im reauthorization,” NAM said in a statement. “This is not a debate about abstract ideas, as opponents would have you believe. Congress’s refusal to support American manufacturing workers is having real-world consequences. “
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