General Electric, which said earlier this week that its Schenectady-based Power & Water unit might shift as many as 500 jobs overseas because of the loss of Export-Import Bank services, said this morning it plans to establish a development center for turboprop engines in Europe.
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“If you’re an export credit agency outside the US, you are now in the process of rolling out the red carpet to US manufacturers”, GE Vice Chairman John Rice told Reuters.
To access the required export credit for its customers of its aeroderivatives turbines, GE will move its final assembly from the U.S.to Hungary and China. Foreign companies use the agency to buy expensive U.S. products when bank loans are not available.
Another 400 jobs could be created in France instead of factories in South Carolina, Maine and New York if the company wins projects it is bidding on. So far, GE has sold financial assets worth more than $90 billion, since it its strategy announcement in April this year.
Many nations with export credit agencies require that production and jobs be located within their borders in order to qualify for financing.
GE stopped considering U.S. locations for the new facility after Congress allowed EXIM’s charter to expire on June 30, the result of a campaign by conservative Republicans against the bank, which they say exemplifies “corporate welfare”.
GE has said that countries requiring export-credit-agency sponsorship make up a significant portion of aviation- related sales. “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”.
In addition, we have determined that we must move packaging for our 50 hertz aeroderivative gas turbine product line from the U.S.to Hungary and China, where functioning ECAs will support our customers with critical financing. The move is expected to impact 100 people who currently work in the company’s facility outside Houston, Texas, and transition will take place in 2016.
It was the second time in two days that GE, one of the largest US companies, has announced jobs outside the country, blaming the closure of the Ex-Im Bank.
GE chose move outside of the U.S.to get financing for projects.
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Several European locations are being considered for the turboprop centre, including in the Czech Republic, where GE now builds turboprop engines for small aircraft, GE spokesman Rick Kennedy said.
