General Electrics’ (GE) relocation of 500 manufacturing jobs outside of the US may just be a political statement, but US corporates of all sizes are feeling the impact of the closure of their export credit agency (ECA).

GE blamed its decision on the fact that government support for exports was no longer available. By relocating 400 of its US-based jobs to France, the company has also scored the support of the country’s ECA, Coface, which will provide a line of credit for projects GE is currently bidding on, worth US$11bn.

Incidentally, the company is also acquiring French energy and transport giant Alstom’s power and grid business, though GE officials have reportedly said the job relocations were completely unrelated.

The remaining 100 jobs will be relocated to Hungary and China.

The timing of the announcement – just as Congress gets back from summer break – and the location of the job cuts in New York, Maine, but mainly Texas and South Carolina – the homes of fervent US Exim opponents, have led many to see GE’s move as a political statement.

“These are 500 jobs of a corporation which has over 300,000 employees. We do need to keep things in perspective here. I think that this is less about a dramatic change in the policies of these companies, and more a call for Republicans to take this issue seriously,” IHS’ John Raines tells GTR.

Boeing also put pressure on Congress by announcing that it has lost two large bids in the past few months due to the lack of export support – the latest with Singapore satellite firm Kacific. The aircraft manufacturer, US Exim’s biggest beneficiary, has been heavily involved in the campaign for the agency’s reauthorisation, including by threatening to move its operations overseas.

“In the long term if this continues to happen, businesses are going to have to reconsider the way they operate in the US, and where they do send their manufacturing facilities, specifically those designed for exports,” adds Raines.

The two firms have also decided to stop contributing to fundraisers for Republican detractors of US Exim, adding to the pressure as the party prepares for the November 2016 presidential election.

Impact on SMEs

While these moves are minimal for such corporations, if successful, they would offer much-needed relief to small businesses, which don’t have the stature or financial power to make political statements, but have been vastly affected by the lack of an export-import bank.

The way we did business with US Exim was so fair and so easy. Closing it makes no sense at all – it is like shooting ourselves in the foot. Susan Axelrod, Love and Quiches Gourmet

Martha Montoya, founder of Los Kitos, a fresh produce exporter based in California, tells GTR that her profits have gone down as she is unable to get any new customers without an ECA guarantee, and cannot even keep all of her familiar customers, as some of their insurance policies have expired and she wasn’t able to renew them. In these conditions, despite developing relationships with large Central and South American companies, she cannot trade. “If we do not get paid, we can damage our company, so it’s not worth it – yet worth it if we could!” she says.

For Susan Axelrod, chairwoman and founder of Love and Quiches Gourmet, a baked goods producer, the situation is slightly different: “It hasn’t affected our business yet because our policy does not expire until April 1, 2016. During that time, believe me, there are insurance companies that are going to be fighting each other to fill that gap. However, we have no idea about the cost and the pricing, so we don’t know how to price our products. We’re not even trying to get new customers abroad, so we’re trying to increase our domestic sales; we’ve changed our focus somewhat,” she says, adding that even once her company understand how to reflect the price of private insurance in its products, it will lose competitiveness on the international stage.

“The way we did business with US Exim was so fair and so easy. Closing it makes no sense at all – it is like shooting ourselves in the foot.”

Congress reaction

Initial reactions to GE’s announcement have been mixed, with Democrats sending an open letter to the Speaker of the House John Boehner urging him to bring the issue to a vote, and some Tea Party members (US Exim’s most vehement opponents) denying the company’s decision was a result of the bank’s closure.

“If I had to forecast how this thing is going to go, I think they’re going to have to attach it to some major piece of legislation. The thing about the US Congress is that it normally does the right thing when push comes to shove on political issues – it normally just needs to be dragged there,” says Raines.