General Electric announced plans to move 500 jobs overseas, and Boeing said it lost the second foreign satellite contract in recent weeks — both due to the failure to keep the federal Export-Import Bank open to help finance new deals.
WASHINGTON — General Electric announced plans Tuesday to move 500 jobs overseas, and Boeing said it lost the second foreign satellite contract in recent weeks. Both corporate giants attributed those developments to the Republican-led Congress’ failure to keep the federal Export-Import Bank open to help finance new deals.
The announcements reignited Republican infighting over the future of the 81-year-old export-credit agency just as Congress was returning from its long summer recess. They also promised to widen the growing rift between the party’s pro-business and anti-government wings, both on Capitol Hill and in the presidential nominating race.
Anti-government populists who deride the Ex-Im Bank, as it is informally called, as “corporate welfare” or “crony capitalism” so far have won in Congress. They have blocked reauthorization of the agency and forced it since June to stop acting as lender of last resort to the foreign buyers of U.S.-made products, from aircraft to car seats.
While pro-bank forces were confounded over how to revive it, they seized on the latest corporate news to try to put their conservative opponents on the defensive and force action.
GE announced that it would move about 400 jobs to France, whose own export-credit agency offered financing for gas turbines, and relocate 100 jobs to Hungary and China to get credit for customers of its advanced aircraft gas turbines. The jobs would shift from New York, Maine, Texas and South Carolina.
“We call on Congress to promptly reauthorize Ex-Im,” said John Rice, vice chairman of GE. He called it “a rare government program that supports the economy while cutting the deficit.”
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Citing global competition, he said GE was left with no choice but to invest in non-U.S. manufacturing and move production to countries that supported high-tech exporters.
Following GE, Boeing announced Tuesday that it had lost a bid to sell satellites to a Singapore-based satellite operator, Kacific, because the aerospace giant did not have the backing of a governmental export-credit agency. This news came two months after Boeing similarly lost a contract with ABS Holding, based in Bermuda, and said it would be reducing the workforce in its satellite- manufacturing business, in part because of uncertainty over the Ex-Im Bank.
Boeing Chairman Jim McNerney also has threatened to move work out of the U.S. if the government’s bank is not reauthorized by Congress.
Bank advocates are searching for a legislative way to reopen the agency. The hope is to add language renewing its charter to one of the many bills that Congress must pass this fal. Without renewal, the bank is open only to manage existing credit and insurance business for foreign deals.