WASHINGTON/NEW YORK (Reuters) - Turning up the pressure on Congress to revive the U.S. Export-Import Bank, General Electric Co (GE.N) said on Thursday it would open a new development center for turboprop engines in Europe because it cannot access U.S. export financing.
The GE’s move was the latest effort by a big company to raise the alarm in Washington about the shutdown of new financing by EXIM, so far with little evident impact on Congress.
GE said the $400-million turboprop project would create 500 to 1,000 jobs. It said it will develop, test and produce engines for larger aircraft, a new market for GE Aviation.
The largest U.S. industrial conglomerate also said it will invest $55 million in Celma, Brazil, to build a new engine testing facility, and will spend $23 million on expanding its engine testing capability in Winnipeg, Canada.
Several European locations are being considered for the turboprop center, including in the Czech Republic, where GE now builds turboprop engines for small aircraft, GE spokesman Rick Kennedy said. Talks are underway with export credit agencies in those countries for financing and loan guarantees.
GE stopped considering U.S. locations for the new facility after Congress allowed EXIM’s charter to expire on June 30, the result of a campaign by conservative Republicans against the bank, which they say exemplifies “corporate welfare.”
On Tuesday, GE announced plans to shift up to 500 U.S. power turbine manufacturing jobs to Europe and China because it can no longer access EXIM financing.
The warning shots, along with a visit by GE Chairman Jeff Immelt to Capitol Hill on Wednesday, thus far have not jolted Congress into action to revive EXIM. House Financial Services Chairman Jeb Hensarling and a vocal group of other conservative Republicans have blocked legislation to reauthorize the 81-year-old bank.
House Republican lawmakers said on Thursday there have been no discussions of trying to attach EXIM legislation to a spending bill needed to keep the government open past Sept. 30.
GE has said it is bidding on $11 billion 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.
Kennedy said EXIM’s closure would put GE Aviation at a competitive disadvantage with its rival in the turboprop business, Pratt & Whitney Canada, a division of United Technologies Corp (UTX.N), because Pratt can provide government-backed credit assistance from Canada to its customers.
GE Aviation employs 25,000 U.S. workers, including 9,000 in the southwest Ohio area where the division is headquartered.
Those facilities are close to the Ohio district represented by Republican House Speaker John Boehner. He has supported EXIM in the past, but has been largely silent about whether he will allow renwal 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 Ex-Im,” said Boehner spokeswoman Emily Schillinger. “Chairman Hensarling asked the speaker for this consideration and he agreed to it.”
Reporting by Susan Heavey and David Lawder in Washington and Lewis Krauskopf in New York; Editing by Kevin Drawbaugh, Mohammad Zargham, Bernadette Baum and Andrew Hay