Since Congress has failed to reauthorize funding for the Export-Import Bank, General Electric on Tuesday said that it would move about 500 U.S. jobs overseas so that it could obtain financing from foreign export credit agencies.
The Fairfield, Conn., company said 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. 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.
GE customers often require guaranteed financing from an export credit agency in order to submit a bid, the company said. With no U.S. export financing available, GE must pursue non-U.S. options.
Many export credit agencies have requirements similar to the Ex-Im Bank’s that production and jobs must be invested in-country to qualify for financing.
“We do not make today’s announcements lightly, and in fact, have done everything in our power to avoid making these moves at all, but Congress left us no choice when it failed to reauthorize the Ex-Im Bank this summer,” GE’s vice chairman John Rice said in a press release. “We know this will have an impact not only on our employees but on the hundreds of U.S. suppliers we work with that cannot move their facilities, but we cannot walk away from our customers.”
The 81-year-old Ex-Im Bank stopped accepting new loans at the beginning of July after Congress allowed its charter to expire, according to the Wall Street Journal. 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,” the WSJ wrote.
However, growing pressure from the business community may entice conservatives to find a way to save face and reauthorize the Ex-Im Bank, according to The Hill.
The Business Roundtable on Monday sent a letter to House and Senate leaders that U.S. companies have lost international sales and put hundreds of thousands of jobs at risk because Congress failed to reauthorize the bank.
“Especially given challenging global economic conditions and forecasts, Congress should seize on opportunities to support U.S. growth and jobs,” wrote Thomas Linebarger, chairman and CEO of Cummins and chairman of the Roundtable’s international engagement committee. “Reauthorizing Ex-Im Bank would help expand U.S. exports, generate and sustain American manufacturing and jobs, and grow the U.S. economy, at very little risk to U.S. taxpayers.”
Ex-Im, which facilitates financing for overseas projects involving U.S. firms, not only doesn’t cost taxpayers any money, it turns a profit, Linebarger wrote. In 2014, the bank generated more than $674 million for the Treasury Department from fees and interest charged for its services.