General Electric is relocating manufacturing for heavy-duty gas turbines from plants in the U.S. to operations in Europe and China, at the cost of approximately 500 manufacturing jobs in Texas, South Carolina, Maine, and New York — though no plants in the U.S. are expected to close in these changes, according to reports.
Through its GE Power Generation business unit, the company is the world’s largest manufacturer of gas turbines in various sizes and power ratings, and also develops steam turbines and other power generation technologies.
GE explained it has reached agreement on a line of financing credit with Coface, the French export agency, to execute a series of power plant projects totaling $11 billion. It will relocate the manufacturing orders for power turbines in order to gain the export credit.
GE’s operation in Belfort, France, will be made its “unique Center of Excellence” for 50-Hz heavy-duty gas turbines. That will draw manufacturing business and a reported 400 jobs from plants in Greenville, S.C., Schenectady, N.Y., and Bangor, Maine.
Beyond that, GE also said 100 jobs involved in final assembly of aeroderivative gas turbines will move Texas to Hungary and China next year.
The conglomerate also made it clear that the export-financing facility is no longer available to its domestic operations because of the Congress declined to reauthorize the U.S. Export Import Bank (Ex-Im) on July 1.
Export credit agencies (ECA) guarantee financing for large capital projects by potential GE customers, guarantees that GE requires before it will bid on such projects. In exchange for the guarantee, the ECAs typically require that manufacturing programs and jobs must be maintained in the originating nation – and GE emphasized that having no export credit-financing agency will result in the loss of thousands of U.S. jobs at GE plants and those of its suppliers.
“Our customers rely on export credit agencies, like U.S. Ex-Im, to finance their critical power projects,” explained GE Power & Water vice president Jeff Connelly. “While our preference is to continue producing power generation equipment in our best U.S. factories, without customer access to the U.S. Ex-Im bank, we have no choice but to move our work to places that will offer export credit financing of these projects.”
GE said it has negotiated with several foreign export credit agencies to secure financing for its customers in the weeks since the reauthorization was declined.
“We call on Congress to promptly reauthorize Ex-Im,” stated John Rice, General Electric vice chairman. “The truth is that Ex-Im supports thousands of U.S. jobs and has returned $7 billion to the U.S. Treasury over the last 20 years – a rare government program that supports the economy while cutting the deficit.
“In a competitive world, we are left with no choice but to invest in non-U.S. manufacturing and move production to countries that support high-tech exporters,” Rice added.