Story by The Washington Bureau
As the Export-Import Bank remains shuttered, the export credit agency’s biggest customers are adding jobs in countries that will finance their sales.
General Electric (GE) once again on Thursday cited the lack of Ex-Im Bank financing as the reason why it’s expanding operations overseas. This time, GE reached an agreement with the United Kingdom’s export credit agency for up to $12 billion in financing. The financing deal will support sales in international market ranging from Brazil to India. GE said it will create up to 1,000 energy-sector jobs in the U.K. as a result of the financing.
General Electric says it will add about 1,000 jobs in the United Kingdom after reaching an agreement for $12 billion in financing from that country’s export credit agency.
“The U.K. is pro-export and pro-manufacturing,” said GE Chairman and CEO Jeff Immelt, who also headed President Barack Obama’s Council on Jobs and Competitiveness.
Immelt thinks the U.S. isn’t so competitive now that the Ex-Im Bank can’t provide export financing for American companies selling their products overseas. Congress allowed the federal agency’s charter to expire July 1.
“In today’s competitive environment, countries that have a functional export credit agency (ECA) will attract investment,” Immelt said. “Export finance is a critical tool we use to support our customers. Without it, we can’t compete against foreign competitors who enjoy ECA financing from their governments.”
The Exporters for Ex-Im Coalition said GE’s latest announcement “is yet another example of how foreign countries with export credit agencies are capitalizing on the lapse of the U.S. Export-Import Bank. Export credit agency financing is often required to bid on a project, giving countries with functioning ECAs a leg up on the competition when it comes to attracting business in their country.”
Meanwhile, another big user of Ex-Im Bank financing, Boeing, announced plans to open an airplane production facility in China, its first outside the U.S. The plant will finish the interiors and paint the exteriors of 737s manufactured by Boeing (BA) in Renton, Wash.
This joint venture with a Chinese company was announced at the same time Boeing bragged about a $38 billion deal to sell 300 airplanes to China. It’s not clear what role export financing had in this deal, or Boeing’s decision to open a production facility in China. But China has a robust export credit agency — it pumped another $45 billion into the Export-Import Bank of China this summer, according to Reuters. Plus, Boeing, like GE, has said that it might have to move more production overseas because Ex-Im Bank financing was no longer available from the U.S.
Loren Thompson, a national security consultant, wrote in Forbes that “it appears the uncertain fate of the U.S. Export-Import Bank figured in the decision [by Boeing] to establish offshore production,” writes Loren Thompson, a national security consultant, in Forbes.
But Export-Import Bank critic Veronique de Rugy, a senior research fellow at the Mercatus Center, contends the announcement of new jobs overseas by Ex-Im users like GE is no reason to revive the export credit agency. GE may like to get government-backed financing for its deals, but it doesn’t need it, she argues.
The giant corporation is using its overseas jobs announcements “as a political weapon against members of Congress to scare them into renewing Ex-Im,” she writes in Reason.
“Lawmakers sensitive to this bullying should ask themselves whether GE would bring back all its foreign jobs if Ex-Im came back to life. Knowing that the answer is no should open their eyes to GE’s real motives.”