GE has announced it will open a new $400m development centre for turboprop engines in Europe, because it cannot access US export financing.
The move appears designed to turn up the pressure on politicians to revive the US Export-Import Bank (EXIM), which provided financing for foreign purchases of US goods until Congress let its charter expire on 30 June after a concerted campaign by Republicans against what they see as 'corporate welfare'.
GE says it stopped considering US locations for the new facility, which will develop, test and produce engines for larger aircraft and could create 500 to 1,000 jobs, following the lapsing of EXIMs charter. Several European locations are being evaluated.
These include the Czech Republic, where GE now builds turboprop engines for small aircraft, according to GE spokesman Rick Kennedy, who said talks are underway with candidate countries' export credit agencies over financing and loan guarantees.
GE, the USA's largest industrial conglomerate, also announced a $55m investment to build a new engine testing facility in Celma, Brazil and $23m project to expanding its engine testing capability in Winnipeg, Canada, while Tuesday saw it announce plans to shift up to 500 US power turbine manufacturing jobs to Europe and China because it can no longer access EXIM financing.
Despite these warning shots, along with a visit by GE Chairman Jeff Immelt to Capitol Hill on Wednesday, House Financial Services Chairman Jeb Hensarling and a vocal group of conservative Republicans are continuing to block legislation to revive the bank.
GE Aviation employs 25,000 US workers, including 9,000 in the southwest Ohio area where the division is headquartered, close to the district represented by Republican House Speaker John Boehner, but he has so far remained silent about whether he will allow renewal legislation to proceed.
"The only commitment the speaker has made is to give chairman Hensarling the opportunity to amend any Senate-passed vehicle that may include EXIM," said Boehner spokeswoman Emily Schillinger. "Chairman Hensarling asked the speaker for this consideration and he agreed to it."
GE has said it is bidding on $11bn worth of international projects that require export credit agency financing and has started talks with several foreign export credit agencies since EXIM's lending authority expired.
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