Exclusive: GE says to lose Angola locomotive deal if Ex-Im Bank closes

Tue May 19, 2015 5:32pm EDT
 
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By David Lawder

WASHINGTON (Reuters) - General Electric Co (GE.N: Quote) would lose a $350-million deal to build locomotives for Angola, and perhaps billions of dollars more in future export opportunities, if Congress closes the U.S. Export-Import Bank, a senior GE executive told Reuters.

"It would be gone," GE Transportation unit president Russell Stokes said of a not-yet-finalized agreement announced by the global conglomerate in March for 100 lightweight diesel-electric locomotives to be built in Erie, Pennsylvania.

Up to 1,800 jobs at GE, its suppliers and local businesses in 12 states would be put at risk because, without Ex-Im financing, Angola would buy Chinese-built locomotives, he said.

GE, along with other major U.S. exporters including Boeing Co (BA.N: Quote) and business groups like the U.S. Chamber of Commerce and the National Association of Manufacturers, is fighting to save the Ex-Im Bank. The export credit agency's critics, mostly conservative Republicans, want Congress to allow Ex-Im's charter to expire on June 30.

Stokes spoke to Reuters on Capitol Hill between visits to lawmakers late last week to persuade them to keep the bank open.

The alternative would be the end of an institution formed 80 years ago to help finance exports of U.S. goods and services, which the bank says counters foreign competition and protects jobs. Ex-Im, funded from fees and interest, generated a $675 million surplus in fiscal 2014 above its operating cost.

The bank's opponents argue that its loans put taxpayers at risk, distort free enterprise and amount to "corporate welfare." GE reported revenues of $149 billion and profits of $15 billion in 2014.

"GE should seek private financing if it wants the Angola deal to go through," said David McIntosh, president of the conservative Club for Growth, an advocacy group allied with Republican politicians attacking Ex-Im. "It's not the role of the federal government to secure sales for GE."   Continued...

 
The General Electric logo is seen in a Sears store in Schaumburg, Illinois, September 8, 2014. REUTERS/Jim Young