OREANDA-NEWS. GE Power & Water plans to stop manufacturing gas engines in Waukesha, Wisconsin and open a new facility to build engines in Canada. The new facility will also have back-up capacity to manufacture diesel engine components for GE Transportation. GE currently employs 350 at its manufacturing facility in Waukesha, building gas engines for compression, mechanical drive and power generation applications.

Today, GE notified employees in Waukesha and more than 400 U.S. suppliers of its plans.  In Wisconsin alone, suppliers generate almost $47 million in revenue from the plant.

GE plans to build a new US$265 million state-of-the-art “Brilliant Factory” in Canada that will optimize efficiency and streamline production using data, analytics and software.  The factory is expected to be completed in 20 months and will be a flexible production facility that can expand over time and also support manufacturing requirements for other GE businesses.

GE will build its new facility in Canada in order to access additional support from the country’s export credit agency, Export Development Canada (EDC).  The agency has a strong record of export financing. GE has a solid, long-standing relationship with EDC under which the company has participated in a number of global transactions.   With today’s announcement, GE fully expects to expand its relationship with EDC in support of the company’s Power & Water, Oil & Gas and Transportation businesses.   In 2014, EDC facilitated exports and investments of approximately $100B CDN.  The agency actively supports global expansion for manufacturers based in Canada, supporting over 7,000 customers in close to 200 countries last year. 

GE is currently bidding on $11 billion of projects that require export financing. While more than 60 other countries have export credit agencies (ECAs) that support domestic manufacturing for export, the US does not. The authorization for the U.S. export credit agency – the Export-Import Bank, or Ex-Im – lapsed on July 1. For the last year, exporters and suppliers have called upon Congress to reauthorize the U.S. Export-Import Bank to support manufacturing jobs and level the playing field for U.S. companies that compete globally.  Most countries are hungry for manufacturing and export jobs.  The U.S. remains the only major economy in the world without an export bank.

“We believe in American manufacturing, but our customers in many cases require ECA financing for us to bid on projects.  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,” said John Rice, Vice Chairman, GE.  “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 ExIm Bank for all American companies,” Rice continued.  “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.”

Earlier this month, GE Power & Water announced plans to move production and 500 jobs to France, Hungary and China as its customers seek ECA financing support for projects using 50Hz heavy duty and aeroderivative gas turbines. GE Aviation announced plans to create a turboprop engine development, test and production operation in Europe. GE recently signed an agreement with UK Export Finance (UKEF) to access $12 billion in export credit financing for both confirmed and potential orders that could create as many as 1,000 UK jobs.  Among the factors driving these decisions was the need to meet customer financing requirements and access foreign ECAs.