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GE to Build New State-Of-The-Art Engine Plant in Canada to Fill Gap from Ex-Im Bank Lapse

Tomas Kellner
September 27, 2015
GE today announced plans to build a new, state-of-the-art "Brilliant Factory" with manufacturing capacity for multiple business lines including Power & Water, Oil & Gas and Transportation in Canada. The plan will create 350 manufacturing jobs in the first phase and will secure access to Canadian Export Finance to fill the gap from the lapse of the U.S. Export-Import Bank.
As part of the plan, GE's Power & Water business will stop making its trademark orange gas engines in Waukesha, Wis.

The company said today it 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 Waukesha plant.

GE plans to build a new US$265 million state-of-the-art “Brilliant Factory” in Canada that will use data, analytics and software to optimize efficiency and streamline production. The company expects to finish building the factory in 20 months. GE will design it as a flexible production facility that can expand over time and also support manufacturing requirements for other GE businesses.

The new GE plant in Canada will also have back-up capacity to manufacture diesel engine components for GE Transportation. GE currently employs 350 people at its manufacturing facility in Waukesha, building gas engines for compression, mechanical drives and power generation applications.

GE said it would build its new facility north of the border in order to access additional support from the country’s export credit agency, Export Development Canada (EDC). This is the fourth time this month GE announced it was seeking export financing from a foreign government and opening new jobs abroad. The other instances included France and the U.K.

GE and other companies have been seeking to blunt the impact of the U.S. Export-Import Bank’s lapse in operations since June, when the U.S. Congress did not renew its charter. 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.

“We believe in American manufacturing, but our customers in many cases require ECA (Export Credit Agency) financing for us to bid on projects,” said GE Vice Chairman John Rice. “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.”

In 2014, EDC facilitated exports and investments valued at approximately 100 billion Canadian dollars.  The agency actively supports global expansion for manufacturers based in Canada, giving backing to over 7,000 customers in close to 200 countries last year.

GE said it was 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.

Rice said that EDC joined “a growing list of export credit agencies interested in supporting GE’s global business operations and customer base.”