By David Lawder and Lewis Krauskopf
WASHINGTON/NEW YORK (Reuters) - General Electric (NYSE:GE) Co said on Tuesday it will move as many as 500 U.S. power turbine manufacturing jobs to Europe and China because it can no longer access U.S. Export-Import Bank financing, reigniting a congressional battle over the suspended institution's future.
The largest U.S. industrial conglomerate said France's COFACE export agency has agreed to support some of GE's global power project bids with a new line of credit in exchange for moving production of some heavy-duty gas turbines to Belfort, France, along with 400 jobs.
U.S. facilities in Greenville, South Carolina; Schenectady, New York; and Bangor, Maine, will lose out on those jobs if GE wins the power bids, a GE spokeswoman said.
GE also said 100 additional jobs involved in final assembly of aeroderivative gas turbines will move next year from outside of Houston to Hungary and China. No U.S. facility will close, a GE spokeswoman said.
The company is bidding on $11 billion worth of international power projects that require export credit agency financing, including some in Indonesia.
The bitter fight in Congress over EXIM's future has sent businesses large and small to find alternative financing or lose business.
"If you're an export credit agency outside the U.S., you are now in the process of rolling out the red carpet to U.S. manufacturers," GE Vice Chairman John Rice told Reuters. "There are many other companies other than us that are impacted by this."
Boeing (NYSE:BA) Co, EXIM's biggest beneficiary, on Tuesday said it lost a second signed or potential satellite deal due to EXIM's lending suspension. Singapore-based satellite operator Kacific would not consider Boeing's bid on a satellite contract because a lack of EXIM financing. ABS, based in Bermuda and Hong Kong, canceled a Boeing satellite order in July.
Boeing said Tuesday uncertainty surrounding EXIM could affect future workforce decisions.
"U.S. exporters across the country are operating at a significant disadvantage in overseas sales campaigns and are facing tough business decisions because Congress has failed to reauthorize the Ex-Im Bank," said spokeswoman Gayla Keller.
GE's Rice said he expects the company to soon announce agreements with other export credit agencies.
"If EXIM isn't going to happen, or it's going to be a regular fight to be reauthorized, we've got to make other plans," he said.
Jay Timmons, president of the National Association of Manufacturers, called GE's decision "the beginning of a tragedy in the making," noting it will ripple to suppliers, and called on lawmakers to reauthorize the bank.
Conservative Republicans in Congress, led by House Financial Services Committee Chairman Jeb Hensarling, are trying to kill the 81-year-old trade lender, charging that it represents "corporate welfare" and puts U.S. taxpayers at risk. They successfully blocked a renewal of EXIM's charter at the end of June, suspending new lending and trade guarantees.
New efforts are expected by EXIM's supporters in Congress to attach a renewal to government funding or transportation legislation this autumn, but no clear strategy has emerged. Meanwhile, EXIM may have to start laying off its 450 employees after its current operating budget expires on Oct. 1.
GE said the 400 new French jobs would be in addition to the 1,000 jobs that it pledged to bring to France to gain Paris' blessing for its acquisition of Alstom's power business. Last week, GE won European Union regulatory approval for the deal, which it expects to complete by the end of 2015.