Financial Times

GE switches 500 jobs to France in blow for US manufacturing

by Ed Crooks, Shawn Donnan and Michael Stothard ­

September 16, 2015 | 3:13 pm
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General Electric has reignited a political debate over US global competitiveness and the future of its Export ­Import Bank by announcing it is shifting 500 manufacturing jobs out of the
country to nations that provide export finance.

US business has been fighting for a year to save the ExIm Bank, the government ­backed trade finance agency, which lost its ability to extend new loans on July 1 after opposition from
conservative Republicans.

Leading chief executives, including Jeffrey Immelt, of GE, have argued that the bank is critical to their ability to compete globally in the face of growing government support for
exporters in China and other US rivals. The jobs to be lost are at plants manufacturing gas turbines for power generation. Most of the operations will be relocated to France, in a coup
for Socialist president, François Hollande.

GE said it had secured backing from Coface, the French export credit agency, to support its bid for contracts in Indonesia and other countries.

John Rice, a GE vice ­chairman, said: “In a competitive world, we are left with no choice but to invest in non­ US manufacturing and move production to countries that support high­ tech
exporters.”

Boeing also said yesterday that it planned to cut hundreds of jobs from its satellite manufacturing business in California, in part because of the failure to renew ExIm.

Boeing was the largest beneficiary of the bank in 2013 and GE the second­ largest in terms of the value of loans and loan guarantees provided, according to the Mercatus Center at
George Mason University, a free­ market think­ tank.

The positions lost at GE’s US operations will be from plants in Texas, South Carolina, Maine and New York. About 400 will move to France, with the rest going to Hungary and China.
GE said the jobs being moved to France would be in addition to the 1,000 new manufacturing and engineering jobs that it had promised to create there after its $14bn acquisition of
Alstom’s energy business.

The jobs shift is a vindication for France’s Socialist government, which has adopted a more business ­friendly agenda over the past year in an attempt to attract more inward
investment.

Ministers have promised to award €41bn of corporate tax breaks and reform France’s onerous labour code, and have also sought to better promote France abroad.

Large US manufacturers have become increasingly frustrated about how the ExIm Bank has languished since its backers in business and Congress struggled to have its mandate
reauthorised before the legislature’s August recess.

Republican critics of the ExIm Bank say it perpetuates crony capitalism, providing the bulk of its benefits to a small number of large, politically well­ connected companies, at the
expense of consumers and smaller businesses.

Business has been fighting to save the ExIm Bank, which lost its ability to extend new loans on July 1.

 

 

By: Ed Crooks, Shawn Donnan and Michael Stothard ­ 


by Ed Crooks, Shawn Donnan and Michael Stothard ­

September 16, 2015 | 3:13 pm
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