11 Oktober 2015

[111015.EN.BIZ] Now GE Exports US Jobs To Canada In Wake Of US ExIm Bank Shutdown

ANGRY General Electric said it will move production of large, gas-powered engines to Canada from Wisconsin, along with 350 jobs, because the company cannot access financing from the US Export-Import Bank, Reuters reports.

In its latest salvo aimed at persuading Congress to renew the trade bank's expired charter, GE said it will invest US$265 million in a new state-of-the-art manufacturing plant at a Canadian location yet to be determined.

Export Development Canada will provide export financing support for products made in the new plant, GE said.

Recently, GE said it made a deal with the British export credit agency for up to US$12 billion in financing, possibly creating as many as 1,000 jobs in Britain.

The agreement marks another instance of American exporters' displeasure at the winding up of the US Export-Import Bank, which lent money to foreign customers of US exporters.

The week before, GE announced plans to shift up to 500 US power-turbine making jobs to Europe and China because of the lack of American export credit. It also went to Europe for locations of a new development centre for turboprop engines.

But the US trade finance agency's charter lapsed on June 30 after the US Congress cast it as a promoter of "crony capitalism".

GE said its deal with UK Export Finance, a department of the British government, would support orders for oil and gas and other energy projects in Brazil, Ghana, India, Mozambique and other countries.

GE chief executive Jeff Immelt has been actively campaigning for the revival of Ex-Im, telling reporters recently that more US jobs are likely to move overseas unless the bank is revived.

GE has previously said it was seeking financing from other export credit agencies to save a $350 million locomotive deal with Angola that has lost access to Ex-Im support. That deal involved 100 diesel-electric locomotives to be built in Erie, Pennsylvania.

"In today's competitive environment, countries that have a functional export credit agency (ECA) will attract investment," Mr Immelt said.

"Export finance is a critical tool we use to support our customers. Without it, we can't compete against foreign competitors who enjoy ECA [export credit agency] financing from their governments."

Boeing chairman Jim McNerney has said the world's biggest aircraft maker is actively looking at moving "key pieces" of its operations to other countries, given uncertainty about the future of the Ex-Im Bank.

The president of the largest US aerospace trade group told Reuters last week that more companies are considering moving plants overseas due to concerns over Ex-Im.

Source : HKSG.

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