General Electric Co. said Thursday that its aviation unit would expand operations in Europe, Brazil and Canada, as the company continues to shift more American jobs overseas, citing the failure of the U.S. government to reauthorize the U.S. Export-Import Bank.
GE has said the lapse of the charter of the export-financing agency, which congressional Republicans have singled out as an example of corporate welfare, forces the company to move facilities overseas or risk losing contracts for turbines, power projects and other industrial equipment.
On Thursday, GE said it would create as many as 1,000 jobs in Europe with a $400 million investment in a new turboprop engine development, test and production operation. An additional $78 million in similar investments are slated for Canada and Brazil.
GE has said that countries requiring export-credit-agency sponsorship make up a significant portion of aviation-related sales.
“Right now, across the entire company, GE has $11 billion in sales opportunities in the pipeline requiring [Export Credit Agency] financing,” says David Joyce, head of GE Aviation. “The uncertainty around the Ex-Im Bank in the U.S. requires that companies like GE create alternatives in order to compete internationally.”
Earlier this week, GE said it had signed an agreement for a line of credit for certain power projects from France’s export-credit agency, which would shift some 400 jobs from New York, Texas, South Carolina and Maine to Europe. It said another 100 jobs would be moved next year from the Houston-area to Hungary and China to access financing for customers of gas turbines used in aviation.
The Export-Import Bank requires the vast majority of production and jobs for deals that it finances to be located in the U.S., and most other export-credit agencies have similar requirements.
The 81-year-old Export-Import Bank stopped accepting new loans at the beginning of July after its charter expired. That same month, some 64 senators voted for an amendment to reopen the bank, but conservative Republicans who control key leadership positions blocked 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.