The Wall Street Journal: GE to Shift Jobs to Canada In Ex-Im Bank Protest

September 28, 2015 – General Electric Co. said Monday that it would cease manufacturing gas engines in Waukesha, Wis., and move 350 jobs to a new factory in Canada to use that country’s export financing regime to pursue new business.

The announcement is the latest from GE after Congress failed in July to reauthorize the Export-Import Bank, the export financing entity in the U.S.

GE says that financing from an export credit agency such as Ex-Im is required for some $11 billion of projects for which it is preparing bids, including power turbines, generation equipment and aircraft engines.

Earlier in September, GE executives announced plans to create 500 jobs in the company’s power and water business in France, Hungary and China, saying the moves would enable GE to secure export financing from those countries in exchange for creating jobs. The company also said it would create as many as 1,000 jobs in its oil-and-gas unit in the U.K., also in exchange for export financing.

Export financing deals, such as those GE has secured in the past from the Ex-Im Bank, are required as part of a formal bid on many significant projects that GE competes for, company officials say.

GE will cease manufacturing gas engines at its factory in Waukesha, Wis. President Barack Obama toured the facility in 2014.
GE will cease manufacturing gas engines at its factory in Waukesha, Wis. President Barack Obama toured the facility in 2014. PHOTO: MANDEL NGAN/AFP/GETTY IMAGES

“You have to make a choice,” said John Rice, a GE vice chairman who directs the company’s global operations. “Either bid and make it in a country that has an export credit agency, or you’re not going to bid.”

GE’s exit from Waukesha means the departure of a namesake product: the company’s Waukesha line of engines used for compression and mechanical drivers, as well as for generating power. Several hundred GE jobs will remain in Wisconsin, including in engineering and design, Mr. Rice said, but the manufacturing positions will move to a new $265 million factory planned to open in 20 months in Canada.

The new facility will allow for future expansion and be designed to handle manufacturing requirements of GE’s other industrial businesses.

GE said it already has about 6,500 workers in Canada and has used Canada’s export financing entity to support past sales.

Opponents of Ex-Im say GE and other major manufacturers are throwing their weight around to add pressure for the bank’s reauthorization, and suggest announcements such as GE’s could have been made regardless of Ex-Im’s status. GE, for instance, is expanding in France with the acquisition of the power business of Alstom SA. The company says its recently announced job-creation plan in France is unrelated to the 1,000 jobs it promised as part of the Alstom deal.

But GE says the Ex-Im fight is one of necessity because export financing is a condition to qualify for bidding on many projects, and other countries are willing to supply financing in exchange for GE shifting manufacturing work to their shores.

“This notion that it’s a choice is just the craziest idea,” Mr. Rice said Monday.

Mr. Rice, in an interview, said GE wasn’t sure if the interval before the planned departure of House Speaker John Boehner could offer a chance to Ex-Im supporters to push through a reauthorization of the bank. Mr. Boehner’s most likely successor, House Majority Leader Kevin McCarthy, started out supporting Ex-Im but later turned to oppose its reauthorization.

Even if the bank is reauthorized later this year, Mr. Rice said, “it really won’t change any of what we’ve announced, but it will certainly help in the future.”

Write to Ted Mann at