Part 1 of 2 in the series Exporting Profits, Importing
Subsidies
 |
| HOLLOW THREAT: General Electric CEO Jeffrey Immelt threatened to move jobs overseas if Ex-Im Bank isn’t reauthorized but records show the company has been moving jobs offshore for years. |
In June, General Electric Chief Executive Officer Jeffrey Immelt threatened to send jobs overseas if Congress didn’t reauthorize the Export-Import Bank.
“We’re not going to lose this business,” Immelt was
quoted by Bloomberg in a speech to the Economic Club of Washington.
“We’ll build these products in places where export credit financing is
available.”
But GE and 130 other companies that export products using
Ex-Im bank loan guarantees have been eliminating or shipping thousands of jobs
overseas while benefiting from the taxpayer-subsidized agency, a Watchdog.org
investigation found.
The Export-Import Bank Act of 1945, which set up the bank,
specifically required it to guarantee loans that “contribute to the employment
of United States workers.” But Watchdog’s analysis of Ex-Im and U.S. Department
of Labor databases show companies benefiting from about 45 percent of all the
bank’s guarantees since 2006 eliminated or exported at least some jobs to other
countries.
David Williams, president of the Taxpayers Protection
Alliance which opposes Ex-Im re-authorization, said Watchdog.org’s analysis
shows the flaws in the bank’s mission and policies.
Taxpayers Protection Alliance president David Williams
said it’s time to end the Ex-Im Bank program. “It’s almost a cognitive dissonance,” Williams said. “You
say you’re helping jobs but you’re sending jobs overseas. The point of Ex-Im is
to create jobs here and not elsewhere. They’re speaking out of both sides of
their mouth.”
The bank, which guarantees loans to foreign businesses
and governments to buy U.S. products, boasts that it “supported”
164,000 American jobs last year.
But bank and Department
of Labor records show companies that shipped $69 billion of products using
Ex-Im loan guarantees since 2006 also shipped at least 5,600 jobs overseas in
that same time period, Watchdog.org found.
Actual job losses are likely to be four or five times
higher for Ex-Im exporters because only 34 of the DOL records Watchdog.org
reviewed listed job-loss numbers. The remaining 131 records noted jobs were
sent overseas but didn’t list the specific number of positions lost. DOL
spokesman David Roberts did not return repeated calls and emails to explain why
only some of the petitions detailing job losses are online.
Watchdog.org learned that taxpayers were also on the hook
for retraining many Americans who lost jobs at Ex-Im supported companies because
of the federal Trade Adjustment Assistance program. In 2010, Congress
appropriated nearly $1 billion for TAA, and the program is expected to cost an
additional $2 billion through 2020.
TAA provides retraining, job search and added
unemployment payments to workers whose jobs were eliminated because of foreign
competition or because their jobs were sent overseas.
Bank spokesman Lawton King would not provide a bank
official to discuss the issue, but he emailed a statement noting that Ex-Im
only supports exports that are made or have nearly all their components made in
the United States.
“EXIM Bank finances U.S. export-related transactions in
order to support U.S. jobs,” the email statement said. “If a foreign company
would like to finance a transaction with EXIM financing, the company must ‘buy
American.’”
But a 2013 Inspector General report questioned how well the bank does in verifying that
exporters sell U.S. products using Ex-Im guarantees.
“Due to the lack of verification efforts and because we
identified concerns regarding exporter certifications of content, we believe
Ex-Im Bank has limited assurance that content requirements are met,” IG
auditors wrote.
King declined to comment on whether U.S. companies who
send jobs overseas should be prevented from participating in Ex-Im Bank
exports, saying Congress sets the Bank’s rules.
Most of Watchdog.org’s calls and emails to U.S. lawmakers
were not returned, but a spokeswoman for U.S. Rep. Ken Buck, R-Colo., provided
a statement praising the expiration of Ex-Im Bank’s authorization.
“As a prosecutor, I strongly oppose the Ex-Im Bank
because this federal agency has a history of accepting bribes, steering funds
to favored foreign companies, and chilling the market for our home-grown
companies,” the statement said. “Ex-Im has become a breeding ground for
corruption, cronyism, and fraud.”
The reauthorization of the bank, which for decades was
routine, was blocked when House Republicans broke with establishment lawmakers.
Conservatives have charged the bank is a waste of taxpayer money, distorts
markets by favoring some companies over others and provides cheap financing to
foreign companies that then compete on a less-than-level playing field with
U.S. businesses.
Bank supporters point out that most developed countries
have similar government guarantees. They say Ex-Im funding maintains U.S. jobs
and it doesn’t cost taxpayers anything because the bank operates at a profit.
That final point is controversial as Congressional Budget Office
staff testified last year that the bank would cost taxpayers
$2 billion between this year and 2024 if bank officials used a common
accounting method.
The Watchdog.org investigation also questions whether the
bank does enough to encourage its beneficiaries to keep jobs in the United
States.
General Electric and its subsidiaries shipped nearly $5
billion in products with Ex-Im Bank guarantees since 2006, but the company, its
subsidiaries and union officials notified DOL at least a dozen times of GE jobs
moved to Mexico, China, Hungary and other countries, DOL records show.
GE spokeswoman Meghan Thurlow declined to do an interview
on the subject, providing an emailed statement she said “speaks for itself.”
“GE is a major contributor to the U.S. economy, adding
16,000 U.S. jobs since 2009,” she wrote in an email exchange. “We employ more
than 130,000 Americans, (and) generate billions in U.S. exports.”
But GE’s corporate filings show since 2006 the company
reduced its U.S. workforce by 19,000 employees while increasing overseas jobs
by 5,000.
A 2011 Huffington Post article noted that in 2000 GE had thousands more jobs in
the U.S. than abroad but that flipped in the past decade. “Since Immelt took
over in 2001, GE has shed 34,000 jobs in the U.S., according to its most recent
annual filing with the Securities and Exchange Commission. But it’s added
25,000 jobs overseas,” story said.
Thurlow said SEC employee disclosures include jobs at NBCUniversial that GE
spun off in 2009 but she did not provide any additional details.
Of the more than 20 DOL certifications of GE jobs losses
since 2006, only three petitions that detail the number of jobs lost are online
at the DOL website. Those clearly show jobs moved out of the United States.
In 2013, an HR manager at the Ravenna, Ohio, plant
notified DOL that 160 jobs would be lost. “Production is being moved to a
foreign country (sic), Budapest,” the petition says.
The same year, a union official reported between 500 and
1,500 GE jobs building locomotives and other vehicles at the Erie, Pa., plant
will be lost. “(W)orker separations at the Erie Plant have occurred and are
threatened as a result of the continuing and expanded shifting of production by
the Company to foreign countries,” the petition said. News stories noted 950
jobs were lost because the jobs were shifted to a lower-cost Texas plant, which
the union petition said uses foreign parts.
A year later, union officials reported 200 jobs would be
lost in the closing of New York plant and moving production to Florida. The
petition notes shifting production overseas to France and China contributed to
job losses. “In the past three years, the company has outsourced the capacitors
used in GE locomotives, one of the largest customers of Ft. Edwards (NY)
capacitors, to a manufacturer in China,” it said.
GE is not alone. Since 2006, Boeing has been the largest
beneficiary of selling products under loan guarantees, totaling more than $57
billion, according to an Ex-Im Bank database on Data.gov. Since 2013, the company has moved more than 4,400
jobs offshore or eliminated them because of foreign competition, DOL filings
show.
Boeing spokesman Tim Neale said without bank loan
guarantees, which account for about 15 percent of Boeing’s sales mostly to
companies and governments in the third world, there is a good chance more jobs
will move to other countries.
“We’re not going to sit back and lose major market
share,” he said, adding that the European and Chinese airplane companies
receive loan guarantees from their governments. “It would be a very slippery
slope for us.”
A 2015 DOL filing reported as many as 3,500 jobs from
Washington state will be moved overseas. “The Boeing Company has continued the
strategy of outsourcing instituted in 2012,” the union official wrote. “The
Company has outsourced manufacturing support to Australia, Canada, Mexico,
Russia and India.”
Union officials did not return Watchdog.org’s calls
seeking comment and requesting interviews with displaced workers.
Neale followed up with an email that contended that while
some jobs moved overseas, the company has created tens of thousands of
well-paying opportunities in the United States.
“We have created more than 30,000 U.S. jobs in our commercial
airplane business over the last 10 years, most of them in Washington state, and
about 6,000 of them at our new manufacturing facility outside of Charleston,
SC,” he wrote. “More than 90 percent of our direct employees company wide are
here in the United States, and 80 percentof our commercial airplane suppliers
are here in the U.S. as well. As mentioned when we talked, we are a global
company in terms of customers, but in terms of jobs we are very much a U.S.
company.”
TPA’s Williams said Congress’s failure to re-authorize
Ex-Im is a good test to see if the government can get rid of a program that is
no longer needed and is not benefiting U.S. workers.
“Let’s call a timeout now and see if there are any real
economic consequences of eliminating Ex-Im,” he said. “If there are, they are
going to be minimal.”
Josh Kaib, Grayson
Quay, Steve Ambrose, Sarah Chavey contributed to this story.
Part 1 of 2 in the series Exporting Profits, Importing
Subsidies
Ex-Im Bank touts U.S. jobs but companies export positions
overseas See More...
No comments:
Post a Comment