GE Closing Plant in Wisconsin, Moving it to Canada

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Republican Paul Ryan may be Speaker of the United States House of Representatives and a vocal supporter of “Buy American,” but he couldn’t prevent General Electric Company (NYSE:GE) from closing a plant in his own district in Wisconsin and moving it to Canada.

The closure of the GE Power plant in Waukesha will leave 350 without work. On top of that, the GE Plant has been home to some of the higher-paying manufacturing jobs in Waukesha. GE factory wages were $30.00 per hour, almost twice Wisconsin’s median wage of $17.50.

The closure (GE has already begun packing up equipment) is going to be a big financial strain on the 350 losing their jobs, the city of Waukesha, and the state of Wisconsin. In fact, Wisconsin has lost 20% of its manufacturing jobs–more than 125,000–since 2000.

GE has already started construction on the state-of-the-art gas engine plant being shifted from Wisconsin to Ontario, Canada. Countries like Mexico and Canada have been aggressively luring companies to leave the U.S. In this case, GE was motivated by the $2.0 billion in incentives provided by the Canadian government.

Under the terms of the arrangement with Canada’s export credit agency, Export Development Canada (EDC), GE’s customers will be able to tap into $2.0 billion in federal export financing, even if they don’t purchase products from Canadian plants. In effect, the GE’s expanded Canadian operations and supply chain allow GE to be treated as if it were a Canadian company.

The plant closure in Wisconsin is par for the course for workers at GE. Over the last 20 years, GE has significantly shrunk its U.S. footprint. In 1995, roughly 70% of GE employees were American. But by the end of 2015, less than 40% of GE employees were working in the U.S.

The $265.0-million plant in Welland, Ontario is expected to open in early 2018 and will initially employ 150 people, fewer than the 300 initially called for. The reduction is due to the slowdown in the oil and gas sector. But GE spokesperson Kim Warburton said the company will ramp up employment as additional GE products are added to the production line.

GE said it moved the plant to Welland because it is located close to the U.S. border and access to skilled workers. Welland is just half an hour’s drive from Buffalo, New York and 16 miles from the Canadian side of Niagara Falls.

Sources:

In Paul Ryan’s backyard, good jobs are moving to Canada,” CNN, June 7, 2017.

GE chooses Welland, Ont. as the site for a state-of-the-art gas-engine plant,” The Globe and Mail, June 1, 2016.

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