(Reuters) - General Electric Co (N:GE) plans to create a development center for turboprop engines in Europe after ruling out the United States, raising pressure on Congress to revive U.S. export financing after Congress allowed the Export-Import Bank's charter to lapse in June.
GE, the largest U.S. industrial conglomerate, said on Thursday it will invest more than $400 million in the European turboprop engine development, testing and production operation, creating between 500 and 1,000 jobs.
The company will also invest $55 million in Celma, Brazil, to build a new engine testing facility, and will spend $23 million on expanding its engine testing capability in Winnipeg, Canada.
The announcement comes after the company said on Tuesday it plans to shift up to 500 U.S. power turbine manufacturing jobs to Europe and China because it can no longer access EXIM financing, moving them from locations in Texas, New York, South Carolina and Maine.
Lack of clarity over whether EXIM will resume lending has prompted GE and other companies to scramble to make alternative plans.
GE has said it is bidding on $11 billion worth of international projects that require export credit agency financing and, since the EXIM authorization expired, has started talks with several foreign export credit agencies.
The turboprop engine center will mark a more significant investment in commuter and regional aircraft for GE, which has long been a major engine supplier to larger commercial planes.
GE Aviation spokesman Rick Kennedy said GE would be at a competitive disadvantage with its rival in the turboprop business, Pratt & Whitney Canada, a division of United Technologies Corp (N:UTX), because Pratt can provide government-backed credit assistance from Canada to its customers.
"We considered the U.S. and other global locations, but ultimately, with the uncertainty around EXIM, we had to rule out the United States," Kennedy said.
GE Aviation employs 25,000 workers in the United States, including 9,000 in southwest Ohio, where the division is headquartered.
U.S. lawmakers are searching for a strategy to revive the trade bank after letting its charter expire on June 30.
On Wednesday, President Barack Obama said he expects the U.S. Congress to reauthorize EXIM during its upcoming budget negotiations.
GE had drawn on EXIM backing for a $1 billion deal to supply railway and energy equipment to Angola. GE Vice Chairman John Rice told Reuters in July the company was seeking financing from another country's export credit agency to save that deal.