BUSINESS

General Electric To Move 350 Jobs To Canada To Get Export Financing

09/28/2015 01:27 EDT | Updated 09/28/2016 05:12 EDT
General Electric Co. says it plans to move production of large, gas-powered engines from the U.S. to an unspecified location in Canada, to benefit from trade financing from Export Development Canada.

In an announcement geared at pressuring the U.S. Congress to fund the U.S. Import-Export Development Bank, GE said it would shut its Waukesha, Wis., plant and move 350 jobs to Canada.

GE said it will invest $265 million in a new state-of-the-art manufacturing plant in Canada to make large piston engines generally used for electric power generation that run on natural gas or methane from landfills.

GE is winning contracts around the world, especially in emerging economies, for this kind of power generation, but its customers need the help of government-backed trade banks to get financing.

The Republican-controlled Congress has blocked new funding for the U.S. Export-Import Bank. The federal credit agency stopped accepting new loans at the beginning after Congress allowed its charter to expire on July 1.

Trade development agencies have been lining up for GE's business in the interim.

Export Development Canada has pledged export financing for products made in the new plant, expected to begin operations in about 20 months, GE said.

The facility can be expanded and provide flexible manufacturing capacity to support other GE businesses, including engines for railroad locomotives, GE said.

GE recently expanded its cold-weather jet engine testing facility in Winnipeg,

In recent weeks, GE has announced deals to expand production in the United Kingdom, France, Hungary and China, and take advantage of export credit offered in those countries.

GE vice-chairman John Rice urged Congress to restore the U.S. trade credit agency, but he expressed concern about the resignation of House of Representatives Speaker John Boehner, who has been a supporter of the U.S. Export-Import Bank.

Boehner's likely successor is House majority leader Kevin McCarthy, who has sided with opponents of the trade credit agency, calling it a form of corporate welfare.