General Electric says it is moving 600 jobs overseas from the U.S. because Congress has not reauthorized the Export-Import Bank, a government agency that had provided low-cost financing to foreign customers of U.S. companies.
Many other countries have their own version of the Ex-Im bank to help finance exports from their manufacturers. GE argues it needs access to that kind of financing to make its business building turbines and other heavy equipment used in power plants competitive.
So it said it will shift 500 jobs from Texas, South Carolina, Maine and New York to France, Hungary and China in the near term. Another 100 jobs from outside Houston will be moved to Hungry and China next year.
Government support for the U.S. Ex-Im bank expired in July, despite a major push to reauthorize it from business interests such the U.S. Chamber of Commerce, the National Association of Manufacturers and major corporations such as GE and Boeing.
While large businesses were among the major beneficiaries of the Ex-Im bank’s financing, thousands of small businesses used the Ex-Im bank to finance their overseas sales. But some members of Congress, led by some conservative Republicans, argued the bank amounted to corporate welfare.
GE’s statement again called on Congress to act to reauthorize the bank, which still exists but is not currently allowed to grant new financing.
“The truth is that Ex-Im supports thousands of U.S. jobs and has returned $7 billion to the U.S. Treasury over the last 20 years — a rare government program that supports the economy while cutting the deficit,” said GE vice chairman John Rice. “In a competitive world, we are left with no choice but to invest in non-U.S. manufacturing and move production to countries that support high-tech exporters.”
But opponents of the bank have vowed to continue to fight its reauthorization. They argue that just over 1% of the nation’s exports are financed by the Ex-Im bank.
“The challenge for supporters of a competitive free-market economy is to make sure Ex-Im stays expired,” said Jeb Hensarling earlier this summer. The Texas Republican is chairman of the House Financial Services Committee. “Ex-Im is a part of yesterday’s economy.”