The Corner

Economy & Business

GE’s Ex-Im Pity Party Needs to Stop

GE is engaged in an aggressive battle to keep its Ex-Im subsidies alive. By threatening lawmakers to withhold contributions and move jobs and operations abroad, the company has shown it will stop at nothing in this fight. The latest propaganda coming from CEO Jeff Immelt is the claim that, because of the liquidation of the Ex-Im Bank, GE is being forced to (1) move jobs abroad, and (2) start depending on foreign governments’ handouts. The way journalists are reporting on these stories, you’d think Ex-Im’s existence meant G.E. never had to move jobs abroad and or use foreign export subsidies. 

So let’s check these claims. 

Is GE being forced to move jobs to France due to Ex-Im’s not being reauthorized? No. It was already scheduled to create these jobs as part of a deal with the French government for approving its merger with French manufacturing giant Alstom.

According to the company’s annual report, it is already employing 10,000 people in France. But since the narrative seems to be that the only reason to move jobs to France is the loss of Ex-Im subsidies, it’s fair to ask what prompted GE to currently employ 10,000 workers there before the Ex-Im subsidies expired. While I disagree that GE’s outsourcing is inherently terrible for the U.S, if the company wants to stick to its claim that moving jobs to France is so bad for the U.S. that it requires the reauthorization of Ex-Im to prevent it, I suggest that lawmakers demand repatriation of all the G.E.’s France-based jobs as the price of continuing the export subsidies.  

Also, someone should tell Jeff Immelt that GE had been moving jobs abroad long before the end of Ex-Im. According to its annual reports, between 2004 and 2014, the number of its employees in the U.S. has fallen from 165,000 to 136,000, a 17.6 percent reduction. During the same period, the number of GE employees abroad grew from 142,000 to 169,000, a 19 percent increase. Ex-Im was of course fully operational during that interval, and GE was one of the top five beneficiaries. 

How about the claim that GE is forced to move 1,000 jobs to the U.K? Again, it already has a huge presence in the U.K., with about 18,000 jobs. Moreover, Reuters reported last week that G.E. was very unlikely to have put these jobs in the U.S even with Ex-Im around:

Regarding Thursday’s UK deal, a GE spokeswoman said it was unlikely that GE would have made the investments in the United States even if Ex-Im had been operating, but the agreement was representative of the type of opportunities GE can no longer pursue in the U.S. while the bank is closed.

Got that, Congress?

Finally, the company claims that the end of Ex-Im is forcing it to ask for help from foreign governments, such as those of France and the U.K. Color me skeptical As Diane Katz remarked to me last week, if that were true, GE wouldn’t already be one of the largest beneficiaries of foreign credit agencies. See the French report here:

Of the 15 main recipient businesses of the Coface guarantees, 10 are large French or foreign multinationals, such as Airbus, Chantiers de l’Atlantique, Alstom, Alcatel, Areva, Siemens, Bouygues, Spie and Vinci, General Electric, Thales, Technip and EDF. Frameca (France Metro Caracas) is a consortium established by French multinationals. DMS is the only midsize. G.E. should stop claiming that the end of Ex-Im is making it dependent on the French or the British government. It’s not. G.E. was sucking on other governments’ tits long before the end of Ex-Im

In other words, GE was already the recipient of foreign governments’ largesse, and it should stop pretending that the winding down of Ex-Im forced it into this position. 

Not renewing the Ex-Im charter has been one of the very few conservative victories of the last seven years. Congress shouldn’t let GE’s bullying and bogus claims change that.

Update: Andy Koenig of Freedom Partners sends me this. It is a statement by Representative Scott Allen (R, WI) which confirms G.E.’s constant attempts to blame the end on Ex-Im for business decisions that were made completely independently of the liquidation of the Bank:

“In a press release, and substantiated by my conversation with GE corporate spokesperson, Patrick Theisen, this afternoon, GE wishes to blame the problem on the House of Representatives and that body’s failure to act on the U.S. Export Import Bank. Mr. Theisen was eager to connect me with his public relations department to help me gin up a press release blaming Congress and demanding they act. In the same conversation, practically in the same breath, he told me that the decision on the Waukesha plant was made some time ago and that it was irreversible.”
Annoying. 

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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