The Corner

Economy & Business

Union Calls Out GE for Saying Its Outsourcing Is Due to Liquidation of Ex-Im

Over at the Milwaukee Sentinel, Tom Buffenbarger calls out General Electric for citing the end the Ex-Im bank as the reason for reallocating its Waukesha, Wisc. plant to Canada. Buffenbarger is the president of the International Association of Machinists and Aerospace Workers (IAM) International, the union that represents workers at the closing Waukesha plant.

Obviously, Buffenbarger and I have different views on many things, including the overall impact of the outsourcing of jobs by international corporations and the Ex-Im bank. However, we agree that GE’s outsourcing the Waukesla plant’s jobs have nothing to do with a failure to reauthorize crony Ex-Im. He does a good job of putting the Waukesha plant in the context of GE’s larger outsourcing history.

He writes:

It’s difficult to find the right words to describe General Electric’s hypocrisy in declaring that the 100-year-old Waukesha engine plant will be sacrificed due to Congress’s failure to reauthorize funding for the U.S. Export-Import Bank.

It would be just as hard, if not impossible, to find another large U.S. corporation that has moved as many good-paying U.S. manufacturing jobs out of this country than General Electric. If there is a poster child for the offshore outsourcing that has gutted the U.S. manufacturing sector over the past two decades, it is GE.

GE’s oily attempt to lay the corpse of Waukesha and its workers at the feet of Congress may be considered an inspired move in the world of corporate public relations, but anyone who has followed GE’s long-running exodus strategy knows the decision to shutter Waukesha had nothing to do with export financing.

In the last decade alone, GE has steadily gutted its U.S. workforce by more than 17%, while increasing the number of workers employed abroad by nearly 20%. The rationale is always the same: global competition, lower costs, overseas sales opportunities. At no time has GE ever blamed or credited U.S. export subsidies for any such decisions. ..

He is right that their practice of outsourcing jobs isn’t new. As I noted last week, “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.” 

And while it is true that G.E. never used export subsidies in the past as a reason for the need to outsource jobs, I would add that G.E. was outsourcing a large number of jobs even when it was a top beneficiary of Ex-Im. In other words, outsourcing jobs for GE is a business decision that is made independently of the existence of export subsidies. Blaming Congress for not reauthorizing Ex-Im is straightforward politics.

There was a great piece last week by Lachlan Markay about how GE’s executives asked a state representative to blame Ex-Im for the plant closure while admitting that it was not the real reason. Here is the statement, Rep. Scott Allen (R., Wisc.) made on the issue:

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.

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

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