On September 28, 2015, General Electric Co. announced that it would invest $265 million USD in Canada to construct “a new state-of-the-art ‘Brilliant Factory.’” This factory would be directly involved in operations under GE Power and Water, Oil and Gas, and Transportation business lines. Construction is projected to be completed in twenty months.
In June 2015, the lending authority of the United States’s federal export credit agency, the Export-Import Bank (Ex-Im), expired. Instead of renewing Ex-Im’s authority to lend export credits to American companies, Congress voted to cut off funding to the Export-Import Bank on July 1.
On the other hand, Canada’s own export credit agency, Export Development Canada (EDC), was willing to finance GE’s future Canadian endeavours.
After hefty consideration, GE calculated that their company would greatly benefit by shutting down their factory in Waukesha, Wisconsin – intended for making gas-powered engines – and shifting operations to Canada.
Not only will this new plant “be a flexible production facility,” but it will also be able to “support manufacturing requirements for other GE businesses.”
GE’s decision to move into Canada may come as a surprise to many, but according to Jeff Connelly, vice-president of the company’s global supply chain at GE Power and Water, Canada was an obvious option. GE has had operations in Canada for 124 years, and the company is fully confident in its Canadian operations’ future development and success.
The challenge now lies in an important decision on GE’s part: where will the company construct this new plant? The final location will encompass the consideration of “local supply networks, access to transportation, and the availability of skilled workers.”
Yet regardless of where GE chooses to build its new plant, it would mean 350 new jobs in Canada, which just may be enough to catalyze the resurrection of Canada’s manufacturing industry.
Before we get ahead of ourselves, GE’s decision might be of particular interest to Waterloo Engineering students. Considering how large a company GE is, even it requires some government-backed financial support in its bidding on projects, which was worth a substantial sum of $11 billion USD in 2014. Perhaps medium- and small-sized American corporations might have no choice but to begin following suit for the sake of their very survival.
In other words, other companies currently based in the United States owning global operations could also consider transferring certain divisions or units to Canada to receive export credits from the EDC.
While it is understandable that U.S. Congress wants to save money in the short-term, it is entirely possible that the U.S. will lose its competitive edge in the global manufacturing industry. This concern has been voiced by exporters and suppliers alike, but to this day, Congress has not receded its decision to terminate Ex-Im funding. As a result, the United States is the world’s only major economy without an export bank.
Waterloo had already been called “Canada’s feeder school to Silicon Valley” in Bloomberg Business back in 2013. Could our school’s engineering students contribute to reviving manufacturing and further diversifying the economy right here at home?
With GE acting as a potential catalyst to a wave of American companies finding their way onto Canadian soil, we engineering students have much to look forward to in the future in terms of seeking co-op placements, full-time work upon graduation, and careers in one of the most important sectors of any nation’s economy.
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