GE Power & Water has announced it will stop manufacturing gas engines in Waukesha and lay off 350 manufacturing workers there.
The company plans to build a new $265 million “brilliant factory” to manufacture engines in Canada, which will have the added ability to manufacture diesel engine components for GE Transportation. Expected to open in May 2017, the factory will use data, analytics and software to improve efficiency. The company plans to shift the 350 manufacturing jobs to that facility.
The employees being laid off in Waukesha build engines for compression, mechanical drive and power generation applications. GE today notified the affected employees and more than 400 U.S. suppliers of its decision. The plant generated almost $47 million in revenue for Wisconsin suppliers, the company said.
Another 200 employees in Waukesha will not be impacted. The company said it’s too soon to say whether it will close that Waukesha manufacturing facility.
GE said it has made the shift in its manufacturing operations because of the uncertainty surrounding the U.S. Export-Import Bank, which provides export financing the company uses often. Since July 1, the Ex-Im bank has been in limbo as Legislators discuss whether it should continue.
“There’s no financing available in the U.S. anymore because the U.S. Export-Import Bank has been unable to offer new loans since July 1,” said Meghan Thurlow, a company spokesperson for GE Corporate. “There’s just too much uncertainty right now in the environment in Washington. We just can’t be sure that that change is going to be permanent.”
In Canada, GE will have access to a similar export credit agency, Export Development Canada, which will allow it to bid on about $11 billion of projects currently in the pipeline that require export financing.
GE pointed out that it is now creating jobs and giving an economic boost to other countries instead of the U.S. The company two weeks ago also announced a deal with France’s export credit agency to partner on power and water projects that are expected to create 400 French jobs, Thurlow said.
“We believe in American manufacturing, but our customers in many cases require (export credit agency) financing for us to bid on projects,” said John Rice, vice chairman of GE. “Without it, we cannot compete and our customers may be forced to select other providers. We know these announcements will have regrettable impact not only on our employees, but on the hundreds of U.S. suppliers we work with that cannot move their facilities, but we cannot walk away from our customers. EDC joins a growing list of export credit agencies interested in supporting GE’s global business operations and customer base.
“We continue to urge Congress to reauthorize the Ex-Im Bank for all American companies. However, we must prepare for the worst case and arrange export finance outside the U.S. Unfortunately, this will come at the expense of American jobs. In a slow growth and volatile world, we must go where the markets are and compete in over 170 countries.”