GE: Greenville won't get jobs because of Congress
Source: Greenville Online
September 18, 2015
General Electric Co. said Tuesday that it plans to put 400 jobs in France instead of at its power turbine plant in Greenville and two other U.S. locations because Congress didn't re-authorize the Export-Import Bank of the United States.
GE said it needed to include export financing of the kind formerly provided by the Ex-Im Bank in order to bid on billions of dollars' worth of work to make power turbines and generators for various foreign countries, including Indonesia.
GE said it couldn't get the export financing for the overseas customers in the United States since the Republican-led Congress let the Ex-Im Bank's authorization expire at the end of June, effectively putting the federal lending agency out of business.
So GE said it turned to the bank's equivalent in France to obtain a line of credit for the global power projects.
As a result, GE said it is required to put 400 jobs it expects to create, if it wins the business, in France instead of in Greenville, Schenectady, New York, and Bangor, Maine.
In addition, GE said it would move 100 jobs involving packaging of aeroderivatives turbines from the Houston area to Hungary and China.
Company spokeswoman Katie Roberts Jackson said GE wasn't breaking out exactly how many jobs would not be going to Greenville.
The company's move should not come as a surprise to members of Congress who opposed Ex-Im re-authorization, including U.S. Reps. Jeff Duncan and Mick Mulvaney of South Carolina.
Jeff Immelt, GE's chief executive, warned in June that the company would move U.S. jobs to Canada or Europe rather than lose business for a lack of export financing.
He said at the time that 27 countries required companies to offer financing such as that provided by the Ex-Im Bank "just to bid on a large infrastructure project."
If Congress fails to reauthorize the bank, Immelt said at the time, GE would be "left to make choices of our own."
"Because we're not going to lose this business," he said then. "We'll build these products in places where export financing is available because we have to."
Like other tea party Republicans, Duncan and Mulvaney argue that export financing is a job for the private sector, not the federal government.
In a statement Tuesday, Mulvaney said GE's move "raises interesting questions about a whole host of issues," including why the company didn't get private financing.
Other questions involved in guaranteeing a "level playing field" for U.S. businesses, Mulvaney said, include America's high corporate tax rate, the burden of government regulations and lawsuit costs.
"Anytime we lose jobs to countries overseas, it should be cause for us to examine our international competitiveness," the 5th District congressman said. "But that goes far, far beyond just the Export-Import Bank."
GE said it was required to show proof of financing from a governmental export credit agency in order to bid on the power turbine business, which meant it could not work with a U.S. commercial bank.
Ex-Im Bank advocates, including Sen. Lindsey Graham of South Carolina, say the United States is at a competitive disadvantage without the financing option because many other countries offer it.
The United States shouldn't eliminate its export credit agency unless other nations do the same, Graham has argued.
He and Sen. Tim Scott of South Carolina voted this summer to re-authorize the bank.
Tuesday, Graham said he feared more job losses ahead unless Congress restores the bank.
"The sooner Congress reauthorizes the Export-Import Bank and puts us back on a level playing field, the better it will be for workers in Greenville and across our state," said Graham, a Republican running for president. "The United States should not unilaterally disarm, yet that is exactly what we are doing. This is a recipe for losing jobs."
Scott spokesman Sean Conner said the Ex-Im Bank helps "level the playing field for South Carolina businesses and other businesses interested in exporting."
Republican U.S. Rep. Trey Gowdy, whose district includes GE's Greenville complex, said he favors reforming the bank "while working toward making it unnecessary."
He said the Obama administration should negotiate with other countries to eliminate all export banks competing against U.S. interests "so jobs are not lost to other countries."
Gowdy, who voted to re-authorize the bank in 2012 when Duncan and Mulvaney voted against it, agreed with Graham that "unilaterally disarming" does not make sense.
It especially doesn't make sense for South Carolina "where our manufacturing base is engaged in competition worldwide with companies who have access to multiple Ex-Im banks," Gowdy said.
Jaime Harrison, chairman of the South Carolina Democratic Party, said Mulvaney and other South Carolina Republicans "have been leading the charge against the reauthorization of the Export-Import Bank while Boeing, GE and the hard-working people of South Carolina are taking the brunt of their political games."
The Ex-Im Bank has always received bipartisan support in the past and is "pro-American businesses and pro-American workers," Harrison said. "It is time for a change in Washington and that starts with a change in our congressional delegation."
In announcing the job moves Tuesday, GE called on Congress to restore the bank, saying it had returned $7 billion to the U.S. Treasury over the last 20 years.
Congress' decision to let it expire means the United States is the only major economy in the world without an export bank, GE said.
"We do not make today's announcements lightly, and in fact, have done everything in our power to avoid making these moves at all, but Congress left us no choice when it failed to reauthorize the Ex-Im Bank this summer," GE Vice Chairman John Rice said in a statement.
"We know this will have an impact not only on our employees but on the hundreds of U.S. suppliers we work with that cannot move their facilities, but we cannot walk away from our customers," Rice said.
More than 3,000 people work at GE's complex on Garlington Road, mostly designing and making heavy-duty turbines that burn fossil fuels such as natural gas to generate electricity.
GE has said that 80 percent of the turbines it makes in Greenville are sold overseas and about 30 percent of those deals in the past have included Ex-Im financing.
GE employs more than 700 other South Carolinians at a jet engine parts factory in southern Greenville County and a medical imaging plant in Florence. It has said those factories are part of business units that have also used Ex-Im Bank financing.
The Boeing Co., which makes aircraft for export in North Charleston, has lost satellite business as a result of no longer having access to the Ex-Im Bank, said Rob Gross, a spokesman for the company in South Carolina.
Ted Pitts, president of the South Carolina Chamber of Commerce, said GE's announcement "extends beyond GE to the many small businesses across South Carolina that work with GE and will also suffer as a result of more inaction from Washington."
"Congress should stop stalling and take the vote to reauthorize the bank for the sake of American jobs and businesses," Pitts said.
Ben Haskew, president of the Greenville Chamber, said GE's decision shows how national partisan battles in Washington have real consequences for communities such as Greenville.
He praised Graham for pushing to keep the bank alive and noted the opposite position taken by others in South Carolina's congressional delegation.
"Ideological talking points make for good news channel banter, but they don't put food on a worker's table or grow our community," Haskew said. "It's past time for Congress to take action and reauthorize the Export-Import Bank."
-- Mary Orndorff Troyan of USA Today contributed.