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GE Inks Financing Deal; Could Move 1,000 Energy Jobs to UK

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General Electric Company GE struck a financing deal with Britain's export credit agency that could potentially create 1,000 energy sector jobs in the U.K., in its latest step to create jobs abroad after the U.S. Export-Import Bank's charter lapsed this summer.

The export credit agency agreed to grant GE access to funding of up to $12 billion for potential orders from other countries. Initially, the agreement will support confirmed and prospective orders from India, Brazil, Mozambique, Ghana and other international markets.

GE's step to move U.S. jobs abroad comes after Congress allowed the U.S. Export-Import Bank's charter to lapse in June, thus depriving the conglomerate of access to export financing.

The deal is the latest indication of the unrest among U.S. exporters at Congress' decision of winding down the U.S. Export-Import Bank, which loaned money to foreign clients of U.S. exporters. Conservatives in the U.S. Congress denounced the bank as a promoter of "crony capitalism", and allowed its charter to lapse on Jun 30.

GE's chief executive, Jeff Immelt, has actively voiced his opinion against the decision. He believes that more U.S. jobs will likely move overseas unless the bank is reauthorized and resumes operations.

GE's announcement has come close on the heels of its undertaking to shift as many as 500 jobs from the U.S. to France, China and Hungary for power turbine production; as well as to create 500-1000 jobs in Europe for its GE Aviation business, which has plants in Massachusetts and Ohio.

In fact, aircraft maker and also the largest U.S. exporter, The Boeing Company BA , is threatening to do the same. Its chairman Jim McNerney said that if the Ex-Im Bank was not reauthorized to lend, moving jobs and even operations overseas was inevitable.

It remains to be seen how much the economy stands to lose with the shutdown of the Ex-Im Bank, or how many companies will follow in GE's footsteps.

GE presently carries a Zacks Rank #3 (Hold). Better-ranked stocks that warrant a look include Engility Holdings, Inc EGL and Northrop Grumman Corporation NOC , both carrying a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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