GE Could Join Boeing in Moving Production Overseas If EXIM Dies
Global conglomerate General Electric is taking steps to shift some U.S. manufacturing work overseas now that the U.S. Export Import Bank will be shuttered at least until September, say several news reports quoting GE Vice Chairman John Rice.
With EXIM unable to extend new loans or guarantees because of an effort in Congress to shut it down, GE is arranging with export credit agencies (ECAs) in Canada, the UK, France, Germany, China, Hungary and several other countries to finance more than $10 billion worth of international projects with much of the attendant production going to GE plants in those foreign locations.
“We’re submitting the tenders now,” Rice told reporters. “So we are identifying where we’ll bid this and the ECA support that comes with it, and it’s not in the United States.”
EXIM’s charter expired on June 30 and the bank has been unable to consider granting any requests for loan guarantees since then.
Citing one specific case, Rice said GE also is seeking financing from an export credit agency in an undisclosed country to save a $350 million locomotive deal with Angola that has lost access to EXIM support.
Connecticut-headquartered GE is not moving to shift work and jobs overseas “just to make a point” to Congress, he said, “but to win contracts that couldn’t advance without export credit agency support”
The company “is doing this because if we don’t, we can’t submit a valid tender,” he said without providing a timeline or detailing what GE facilities might be impacted by the possible relocation of some of the companies production activity.
The announcement by the GE Vice Chair isn’t the first such declaration. James McNerney, chairman of aviation and aerospace giant Boeing, said, should EXIM financing be allowed to evaporate, the company was actively looking at the option of moving “key pieces” of its operations, like GE, to other countries that could offer export credits.
According to GE’s Rice, “More business will move overseas if EXIM stays dead,” adding that “the people who are on the other side of this don’t really understand how global business is conducted. They don’t want to understand it.”