GE has signed a new export deal with the UK government that could create as many as a thousand jobs in the country.
Today’s announcement comes on the heels of a similar agreement last week with the French export credit agency COFACE that could create 400 jobs there, making this GE’s second ECA agreement with a foreign government lender since Congress failed to reauthorize the U.S. Export-Import Bank in June.
Over the past weeks, headlines in the United States, Europe and Asia have touted a series of new agreements on global trade as GE and other companies have been seeking to blunt the impact of the U.S. Ex-Im Bank’s lapse in operations. The U.S. Congress did not renew the Ex-Im Bank, as it is commonly known, at the end of June. Since then, the Bank has been unable to provide new loans, making the United States the only major industrial country to operate without an export credit agency.
While U.S. companies continue to urge Congress to renew the Bank, many have been forced to pursue alternative financing for their global customers or risk losing business. In addition to GE’s announcements last week, Boeing and Orbital Sciences Corporation, a Virginia-based satellite company, have reported lost satellite deals resulting from a lack of Ex-Im financing.
Today’s agreement with the UK export credit agency UK Export Finance (UKEF), will unlock $12 billion in financing for UK-manufactured exports. The agreement will support both confirmed and potential orders in a number of international markets including Brazil, Ghana, India and Mozambique – markets that either require ECA financing or where such financing is critical to secure a competitive advantage.
GE estimates that winning these orders will help it create up to 1000 new jobs in the UK in the energy sector.
Top: GE’s H80 turboprop engine inside a testing cell in Prague. Above: The blades of an aeroderivative turbine. Images credit: GE Reports
“We are doing everything we can to make Britain the best place in Europe to start, finance or grow a business,” said British Prime Minister David Cameron. “GE’s substantial commitment through this agreement is fantastic news. It will provide jobs and security for people working in the energy sector and elsewhere. It is a vote of confidence in our long term economic plan.”
GE is already one of the leading investors into the UK, investing over $21 billion dollars in the UK since 2003. As part of the deal, UKEF has added GE as a member of its Direct Lending Facility Partnership Panel, which will allow the company to provide technical, commercial and financial solutions to its customers.
GE Aviation already makes in the UK wing components for Airbus A380 (above) and A350 aircraft. Image credit: Adam Senatori/GE Reports
Prior to today’s UKEF agreement, GE Chairman and CEO Jeff Immelt visited Paris to formalize GE’s agreement with COFACE, which could ultimately create 400 jobs at GE’s facility in Belfort.
GE also announced last week that it would move 100 jobs responsible for final assembly of aeroderivative turbines from the U.S. to Hungary and China to ensure customer access to Export Credit Agency (ECA) financing in those countries. Additionally, last week, GE Aviation announced that it would create a $400 million turboprop engine development, test and production operation in Europe that could ultimately support between 500 to 1000 jobs.
GE has been in close talks over recent months with various ECAs in order to secure funding for its customers. The company made it clear that it would expand its operations in markets where ECA financing is available based on a lack of ECA financing at home.
“In today’s competitive environment, countries that have a functional Export Credit Agency (ECA) will attract investment,” Immelt said. “Export finance is a critical tool we use to support our customers. Without it, we can’t compete against foreign competitors who enjoy ECA financing from their governments.”