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US bill denies federal aid for outsourcing firms

REUTERS[ WEDNESDAY, MARCH 03, 2004 10:48:37 AM ]
NEW YORK: About 50 US House of Representatives members plan to introduce a bill on Wednesday that would deny U.S. companies federal financing and loan guarantees if they shift US jobs overseas.

The proposed Defending American Jobs Act was written by Rep. Bernard Sanders, Independent of Vermont, and will be co-sponsored by about 50 other representatives, including Republicans Ron Paul of Texas and Virgil Goode of Virginia.

Warren Gunnels, Sanders' legislative aide, said it's the first national attempt to deal with the issue of"offshoring," or sending U.S. manufacturing and service jobs to lower-cost venues abroad.

The Defending American Jobs Act would target corporate assistance offered by agencies like the U.S. Export-Import Bank, a 70-year-old unit that provides trade financing and other help to U.S. companies that conduct business abroad.

Sanders singled out Motorola Inc., for receiving $190 million in Ex-Im Bank assistance to build its China operation while firing 42,900 workers in the United States, and General Electric Co. for receiving $2.5 billion to finance China expansion while firing 260,000 U.S. workers. He did not say when the layoffs took place or when the Ex-Im Bank loans were made.

A GE spokesman said the company's U.S. employment had remained around 160,000 for the past decade and added that exports of products like jet engines and turbines had kept American workers employed. He didn't comment on the proposal.

A Motorola spokesman said the company employed about 88,000 worldwide and derived about 45 percent of sales outside the country. He declined to comment on the bill.

Ex-Im Bank spokesman Ron Kogan said the bank had never financed foreign expansion by Motorola, GE or any other company."We finance exports," he said. He added the House members misunderstand the bank's mission.

The bill would require a loan applicant to specify the number of employees in the United States and abroad as well as a general wage scale. If the number of non-U.S. workers increases while U.S. worker numbers fall, the loan would be canceled.

"If the companies don't create jobs in the U.S., we don't believe the Ex-Im Bank should be in existence," Gunnels said.

To date, lawmakers in about 20 states have proposed laws that would ban state contracts from being awarded to non-U.S. companies. In January, U.S. President George W. Bush signed the Omnibus Appropriations Act, which has a provision that bars some government agencies from hiring non-U.S. companies.

The American Electronics Association reports that U.S. technology employment fell 4 percent last year to below 6 million, the lowest level since 1999. Part of the loss has been attributed to companies shifting high-cost development to lower-cost centers abroad, especially in Asia.

Among the directors of the Ex-Im Bank is former Sen. Max Cleland, a Georgia Democrat defeated in 2002. Cleland is campaigning for Sen. John Kerry of Massachusetts, who has recently raised job losses as part of his presidential run.



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>US bill denies federal aid for outsourcing firms
>REUTERS[ WEDNESDAY, MARCH 03, 2004 10:48:37 AM ]
>NEW YORK: About 50 US House of Representatives members plan to introduce a bill on Wednesday that would deny U.S. companies federal financing and loan guarantees if they shift US jobs overseas.
>The proposed Defending American Jobs Act was written by Rep. Bernard Sanders, Independent of Vermont, and will be co-sponsored by about 50 other representatives, including Republicans Ron Paul of Texas and Virgil Goode of Virginia.
>Warren Gunnels, Sanders' legislative aide, said it's the first national attempt to deal with the issue of"offshoring," or sending U.S. manufacturing and service jobs to lower-cost venues abroad.
>The Defending American Jobs Act would target corporate assistance offered by agencies like the U.S. Export-Import Bank, a 70-year-old unit that provides trade financing and other help to U.S. companies that conduct business abroad.
>Sanders singled out Motorola Inc., for receiving $190 million in Ex-Im Bank assistance to build its China operation while firing 42,900 workers in the United States, and General Electric Co. for receiving $2.5 billion to finance China expansion while firing 260,000 U.S. workers. He did not say when the layoffs took place or when the Ex-Im Bank loans were made.
>A GE spokesman said the company's U.S. employment had remained around 160,000 for the past decade and added that exports of products like jet engines and turbines had kept American workers employed. He didn't comment on the proposal.
>A Motorola spokesman said the company employed about 88,000 worldwide and derived about 45 percent of sales outside the country. He declined to comment on the bill.
>Ex-Im Bank spokesman Ron Kogan said the bank had never financed foreign expansion by Motorola, GE or any other company."We finance exports," he said. He added the House members misunderstand the bank's mission.
>The bill would require a loan applicant to specify the number of employees in the United States and abroad as well as a general wage scale. If the number of non-U.S. workers increases while U.S. worker numbers fall, the loan would be canceled.
>"If the companies don't create jobs in the U.S., we don't believe the Ex-Im Bank should be in existence," Gunnels said.
>To date, lawmakers in about 20 states have proposed laws that would ban state contracts from being awarded to non-U.S. companies. In January, U.S. President George W. Bush signed the Omnibus Appropriations Act, which has a provision that bars some government agencies from hiring non-U.S. companies.
>The American Electronics Association reports that U.S. technology employment fell 4 percent last year to below 6 million, the lowest level since 1999. Part of the loss has been attributed to companies shifting high-cost development to lower-cost centers abroad, especially in Asia.
>Among the directors of the Ex-Im Bank is former Sen. Max Cleland, a Georgia Democrat defeated in 2002. Cleland is campaigning for Sen. John Kerry of Massachusetts, who has recently raised job losses as part of his presidential run.
>
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