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G.O.P. Discord Over Ex-Im Bank Intensifies, as G.E. Shifts Jobs Abroad
A G.E. turbine. The company said it would move 500 jobs overseas.Credit Vincent Kessler/Reuters

WASHINGTON — General Electric announced plans on Tuesday to move 500 jobs overseas, and Boeing said it had lost a second foreign satellite contract in weeks, developments that both corporate giants blamed on the Republican-led Congress’s failure to keep the federal Export-Import Bank open to help finance new deals.

The announcements were certain to reignite Republican infighting over the future of the 81-year-old export credit agency just as Congress was returning from its long summer recess, promising to widen the rift between the party’s pro-business and anti-government wings both on Capitol Hill and in the presidential-nominating race.

Antigovernment populists who deride the Ex-Im Bank as “corporate welfare” or “crony capitalism” so far have won in Congress, blocking reauthorization of the agency and forcing it since June to stop acting as lender of last resort to the foreign buyers of American-made products, from aircraft to car seats.

While pro-bank forces were confounded over how to revive it, they seized on the latest corporate news to try to put their conservative opponents on the defensive and force action.

G.E. announced that it would move about 400 jobs to France, whose own export credit agency offered financing for gas turbines, and relocate 100 jobs to Hungary and China to get credit for customers of its advanced aircraft gas turbines. The jobs would shift from New York, Maine, Texas and South Carolina.

“We call on Congress to promptly reauthorize Ex-Im,” said John Rice, the G.E. vice chairman. He called it “a rare government program that supports the economy while cutting the deficit.”

“In a competitive world,” he added, “we are left with no choice but to invest in non-U.S. manufacturing and move production to countries that support high-tech exporters.”

Texas and South Carolina are home to leading opponents of the bank, including Senator Ted Cruz of Texas, a Tea Party favorite and Republican presidential candidate; Representative Jeb Hensarling of Texas, who, as chairman of the House Financial Services Committee, has defied Speaker John A. Boehner and refused to bring any bank bill to a vote in his panel; and Representative Mick Mulvaney of South Carolina, a leader among conservatives in the House.

Last month, G.E. dropped Dallas from its short list of contenders to replace Connecticut as its corporate headquarters, a decision Tony Bennett, president and chief executive of the Texas Association of Manufacturers, attributed to “the political climate that’s been chilled by certain Texas elected officials.”

Following G.E., Boeing announced on Tuesday that it had lost a bid to sell satellites to a Singapore-based satellite operator, Kacific, because the aerospace giant did not have the backing of a governmental export-credit agency. This news came two months after Boeing similarly lost a contract with Bermuda-based ABS Holding Ltd. and said it would be reducing the work force in its satellite manufacturing business, in part because of uncertainty over the Ex-Im Bank.

The developments came as lawmakers drifted back from their long summer recess, and bank advocates searched for a legislative way to reopen the agency. The hope is to add language renewing its charter to one of the many bills Congress must pass this fall, perhaps one to finance the government or a transportation measure. Without renewal, the bank is open only to manage existing credit and insurance business for foreign deals.

More than 100 chief executives for corporations who are members of the Business Roundtable arrived in Washington on Tuesday for an annual meeting, a day after the group’s chairman sent congressional leaders a letter urging extension of the export credit agency. On Wednesday the group will meet with President Obama, who, along with most Democrats, supports the bank.

On this issue among others — like funding the government, raising the federal borrowing limit and financing highways — such business groups have found themselves at odds with traditional Republican allies who increasingly reflect a new populist strain of conservatism in the party that is often hostile toward big business. For decades, the Ex-Im Bank was reauthorized by bipartisan votes, often unanimously.

The National Association of Manufacturers recently stopped hosting the fund-raisers at its well-appointed offices that drew business donors for Republicans. Boeing and G.E. have not explicitly vowed to withhold support, but Boeing’s vice president of communications, Gordon Johndroe, a former aide in the George W. Bush administration, said, “It would be odd for us to hold a fund-raiser or make a large contribution to someone who’s being vocally opposed to an issue of such importance to us.”

The bank’s opponents are “in some cases economically illiterate,” said John Engler, the president of the Business Roundtable and a former Republican governor of Michigan. “I think it’s the antigovernment nature of so many members” elected since the Tea Party’s rise in 2010, he added. “It’s inexplicable. Texas is the largest beneficiary of the Ex-Im Bank. We had in the last year 3,700 transactions that involved the bank, 164,000 jobs.”

Mr. Bennett, the head of the manufacturers group in Republican-controlled Texas, said that at all levels of government, “the ultra-right wing of the party has put a fear factor into our elected officials, and we see some very bizarre behavior, very anti-business behavior and rhetoric out of these folks.”

But on this issue and others, Republican lawmakers face counterpressures from conservative antigovernment groups including Heritage Action, Club for Growth and Charles and David Koch’s Americans for Prosperity, which want to kill the Ex-Im Bank and are ready to finance campaigns against unsupportive Republicans. Many Republicans simply believe uncompromisingly in free-market principles, which they say is antithetical to Ex-Im’s government intervention.

Mr. Mulvaney, the congressman from South Carolina, said G.E. should have been able to get a line of credit from private-sector banks rather than the French government. Bank proponents say private institutions often will not or cannot provide assistance to foreign customers, and more than two dozen mostly developing countries require that exporters who bid for sales have the potential backing of an export-credit agency. More than 80 nations have such banks, with China’s by far the largest.

Mr. Mulvaney also questioned G.E.’s claim that the bank’s uncertain future forced its move, suggesting that other economic factors in the United States — corporate taxes, government regulations and tort costs — could have also driven the decision.

“Anytime we lose jobs to countries overseas, it should be cause for us to examine our international competitiveness,” he said. “But that goes far, far beyond just the Export-Import Bank.”

Mr. Hensarling, who has counted the bank’s lapse as a major victory for conservatives, was unavailable for comment.

While the week’s news put G.E. and Boeing at the center of the debate, bank supporters have tried to focus on small businesses that export to counter the anticorporate strain among Republicans, and demonstrate the bank’s wider impact.

“We need to get this done before we lose any more jobs,” said Representative Stephen Fincher, Republican of Tennessee and the author of legislation resurrecting the bank. “Some of my colleagues are pandering to the outside political groups instead of their constituents.”

Democratic supporters clearly enjoyed the Republican discord but for the fact that they see a real threat to local jobs. Senator Sherrod Brown of Ohio, the ranking Democrat on the Senate Banking Committee, said, “It’s insane to me that something that works this well, that’s been so bipartisan, is jeopardized to score political points.”

Read more http://rss.nytimes.com/c/34625/f/640350/s/49e20448/sc/24/l/0L0Snytimes0N0C20A150C0A90C160Cbusiness0Ceconomy0Cexport0Eimport0Ebank0Egeneral0Eelectric0Eboeing0Bhtml0Dpartner0Frss0Gemc0Frss/story01.htm


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