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U.S. NEWS A7
Wednesday 16 September

Sharp decline in auto output US Financial Front:

lowers US factory production GE: 500 US jobs may move overseas

C. S. RUGABER A General Electric plant is seen in Belfort, eastern France. To access the required ex-
AP Economics Writer General Electric Co. on Tuesday, Sept. 15, 2015 said it may port credit for its customers
WASHINGTON (AP) — Automakers cut back sharply on move up to 500 American jobs overseas. of its aeroderivatives tur-
production in August, lowering overall factory output bines, GE will move its final
and highlighting one of the economy’s weak spots a (AP Photo/Thibault Camu) assembly from the U.S. to
day before a key Federal Reserve meeting. Hungary and China.
Manufacturing production dropped 0.5 percent, the STEPHEN SINGER created in France instead Rep. Joe Courtney, D-
biggest decline since January 2014, the Federal Re- AP Business Writer of factories in South Caro- Conn., a supporter of the
serve said Tuesday. The drop in auto output account- HARTFORD, Conn. (AP) — lina, Maine and New York if Ex-Im Bank, said the refusal
ed for most of the decline. Production of computers, General Electric Co. said the company wins projects by Republicans to back
airplanes and furniture also fell. Tuesday that it may move it is bidding on. The proj- the federal agency is tak-
Fed policymakers will begin a two-day meeting about 500 jobs overseas ects require financing, and ing a toll.
Wednesday to consider whether to raise short-term in- because Congress did not the export-credit agency “This is not a political par-
terest rates for the first time in nine years. Slowing over- renew a government pro- in France has agreed to lor game in Washington,
seas growth and the strong dollar, which are holding gram that allows foreign provide it. D.C.,” he said. “They’ve run
back factory output, could cause them to delay a companies to borrow mon- Democrats in Congress, cit- the numbers and there’s
rate hike. ey to buy U.S. products. ing GE’s announcement, nothing out there that
“Looking through the swings in auto assemblies, the Authorization for the U.S. urged Republican leaders even comes close to what
ongoing weakness in manufacturing is evident,” Mi- Export-Import Bank was not to introduce legislation to they’ve been getting from
chelle Girard, an economist at RBS Securities, said in approved by Congress, get the Ex-Im bank operat- Ex-Im for decades.”
a note to clients. “Manufacturing is now the weakest forcing it to stop lending ing. Republican Rep. Jeb Hen-
sector of the US economy, faced with headwinds of a July 1. Foreign companies “Already, small, medi- sarling, chairman of the
stronger dollar and weaker global growth.” use the agency to buy um and large business- House Financial Services
Overall industrial production, which includes mining expensive U.S. products es across the country are Committee, tied GE’s
and utilities, dropped 0.4 percent in August, after a 0.9 when bank loans are not feeling the negative im- shift to Europe for capital
percent rise in July. available. pact of this shutdown, lay- to its dispute with Con-
Auto production plunged 6.4 percent, its steepest fall As a result, GE says 100 ing off employees, and necticut officials over in-
in more than three years, after an outsized gain of 10.6 jobs from a Houston plant seeing business put on creased business taxes. He
percent in July. Those swings partly reflect difficulties in that makes gas turbines hold,” House Democratic also cited GE CEO Jeff Im-
seasonally adjusting the data and are likely temporary. will move to Hungary and Whip Steny Hoyer and oth- melt’s role as chairman of
U.S. carmakers in the past have temporarily closed China in 2016. The Fairfield, ers wrote to Speaker John the President’s Council on
their plants in July to retool them for new models. Those Connecticut, industrial Boehner and Senate Ma- Jobs and Competitiveness.
shutdowns were much shorter this year, boosting pro- conglomerate says those jority Leader Mitch McCo- “It’s troubling that the head
duction in July and leading to a corresponding drop countries have lending op- nnell. of President Obama’s Jobs
in August. Auto sales are strong and on track to top 17 tions in place for custom- GE said it’s bidding on proj- Council is announcing GE
million this year for the first time since 2001. ers. ects valued at $11 billion is leaving Connecticut
Utility output rose 0.6 percent last month, likely be- “We do not make today’s that require export financ- because the state’s taxes
cause Americans used more air conditioning. Mining announcements lightly ing. It said it has reached are too high and is choos-
production, which includes oil and gas drilling, fell 0.6 and in fact, have done agreement with the French ing to send jobs overseas
percent. Factory output has been flat this year, largely everything in our power to export-credit agency to because U.S. taxpayer-
because of global headwinds that have cut into ex- avoid making these moves provide a line of credit for provided subsidies are too
ports. The dollar has risen about 14 percent in value at all, but Congress left us global power projects. GE low,” he said.
against other currencies in the past year. That makes no choice when it failed to said the line of credit will GE has not announced
U.S. products more expensive and therefore less at- reauthorize the Ex-Im Bank initially support potential it’s leaving Connecticut. It
tractive to overseas buyers. this summer,” said John orders in international mar- said in June it’s considering
China’s economy is also faltering after decades of Rice, GE’s vice chairman. kets that include Indone- relocating its headquarters
breakneck growth. It has been a critical source of de- Another 400 jobs could be sia. to a “more pro-business”
mand for American-made industrial machinery, such state. White House spokes-
as mining trucks, construction equipment and agricul- man Josh Earnest blamed
tural machines. Its slowdown has hit sales and profits the GOP majority in Con-
for companies like Caterpillar and United Technolo- gress for GE’s decision.
gies. “We hear a lot about Re-
Falling oil prices have also dragged down factory out- publicans complaining
put. Crude oil prices, which were around $60 per bar- about supposedly job-kill-
rel in the spring, have fallen to about $44. The decline ing regulations,” he said.
has forced energy firms to curtail drilling, eliminating “The fact is, it seems like,
much of the need for new pipelines and equipment based on what GE has re-
that had boosted factory orders in previous years.q ported today, the Republi-
cans are killing quite a few
jobs on their own.”q