WAUKESHA, Wis. — When President Obama visited General Electric's sprawling, red brick engine factory here in January 2014, he praised it as a sign that manufacturing in America could have a promising future. "We're here because you're doing some really good stuff," Mr. Obama said. Plants like this, he declared, "can be a model for the country."
On the morning of Sept. 28, however, the Waukesha plant manager gathered the workers on the floor and told them the factory would be shut down. G.E., he said, had decided to shift production of the industrial engines — and the workers' jobs — to Canada.
What happened in less than two years to change things so much? The answer is a blend of Washington politics, fast-changing markets and corporate self-interest. At the center is a politically charged dispute over a usually obscure agency, the Export-Import Bank.
That dispute reaches a turning point on Monday, when supporters from both parties of the now shuttered federal agency will force a vote in the House of Representatives to reopen it — the culmination of a monthslong revolt against some of the most powerful Republicans in Congress, who want the bank dead.
The Waukesha factory workers feel that their jobs are being lost to forces beyond their control. "We're the hostages in this fight," said Scott Schmidt, 43, a machinist and 20-year employee.
When the workers assembled last month, they were told the Waukesha factory was being shut down because Congress had failed to fund the Export-Import Bank, which plays a small but often crucial role in America's export trade.
Conservative Republicans have singled out the bank as a symbol of "corporate welfare," saying it hands out generous subsidies, especially to big companies like G.E. This year, House Republicans blocked a vote to renew funding for the bank.
But corporate reaction, particularly G.E.'s Waukesha shutdown, has prompted some House Republicans to reconsider, fearing the perception they are sacrificing American jobs for the sake of ideology.
Republican supporters of the bank teamed up with Democrats on a rarely used tactic, gathering 218 signatures from both parties on a petition to force a vote to reopen the bank. Such "discharge petitions" almost never work, because leaders of the majority party in the House often view the signing of the minority's petitions as akin to treason.
Conservative opponents of the bank, meanwhile, are threatening parliamentary maneuvers that could grind House procedures to a crawl.
All of this is remarkable, since for most of the bank's 81-year history, it was never really controversial.
The bank offers financing and insurance for American companies exporting products, and most industrialized nations have similar agencies. The Export-Import Bank actually makes money and returns funds to the Treasury. The bank says it supported $ 27.4 billion in exports and 164,000 American jobs last year. Nearly 90 percent of its loan recipients, the bank says, were small businesses, whose exports accounted for about 40 percent of those supported with Export-Import funding.
In the debate over the bank, "we have labor agreeing with the National Association of Manufacturers and the U.S. Chamber of Commerce," said Owen E. Herrnstadt, director of the trade and globalization program at the International Association of Machinists and Aerospace Workers, the union representing the factory workers in Waukesha. "That doesn't happen very often."
Opponents of the bank reply that organized labor and major corporations are the kinds of powerful lobbying institutions that can extract special favors from the government. The bank, they say, classifies a lot of big-company business as small business. "The big guys can extend the financing themselves," said Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.
In a study published this year, Ms. de Rugy and a co-author, Diane Katz, looked at the largest buyers of exports supported by Export-Import Bank financing and found that the top 10 were all either foreign oil companies or airlines. The authors singled out the subsidies to foreign oil companies: "The federal government," the report said, "doubly disadvantages U.S. energy firms — through Washington's excessive regulation and Ex-Im Bank subsidies to U.S. firms' foreign competitors."
The Mercatus Center is listed as one of the projects of the Koch family foundations. Charles G. and David H. Koch, libertarian conservative philanthropists, are also the chief executive and executive vice president, respectively, of the privately owned Koch Industries, which has substantial oil and energy interests. Another Koch-backed group, Heritage Action for America, is an opponent of the Export-Import Bank.
G.E. says that in 27 countries, particularly those in the developing world, backing from an export credit agency is often a requirement on bid proposals to sell the industrial equipment G.E. makes. "It's not a choice G.E. makes," said John G. Rice, G.E.'s vice chairman for global operations.
In an interview, Mr. Rice said G.E.'s decisions about plant locations were made on a case-by-case basis. In the last seven years, for example, G.E. has invested $ 2 billion in seven new jet engine plants in America, including ones in Dayton, Ohio, and West Lafayette, Ind. Any suggestion that the Waukesha decision means G.E. is turning away from manufacturing in the United States "makes no sense," Mr. Rice said.
No ground has been broken and no site has been selected for the new Canadian factory. If funding for the Export-Import Bank is quickly restored, will the Waukesha plant and its workers be spared?
No, Mr. Rice said, the decision is irreversible. An extension of Export-Import Bank funding, he said, would not remove the business risk that the bank might be killed a few years later.
The enthusiastic backing of Canada's export credit agency, he said, was a "very important consideration" in deciding to locate a new factory there. But there were other considerations as well, he said.
The big industrial engines made in Waukesha, which cost up to $ 1 million each, are used for emergency power in hospitals and office buildings — but their principal market is the oil and gas industry. With the sharp drop in oil prices, demand for those engines has plummeted.
Waukesha produced nearly 1,000 engines last year. This year, Jim Flemming, the plant manager, said, the total will be fewer than 500. Next year, the outlook is for an additional 15 percent decline.
The plant move will affect 350 workers. Of those, 291 are hourly factory employees, with the rest mainly supervisors and engineers. The machinists on the floor have good union jobs that can pay $ 30 an hour or more, and they can make $ 50,000 to $ 80,000 a year, depending on overtime.
The machinists, who are skilled and experienced, talk of steady learning on the job, reading blueprints and mastering electronics, and the value of "tribal knowledge." They also talk of solid middle-class livelihoods, families raised, college tuitions paid and ailing relatives cared for.
Marty Brodzeller, who has worked at the plant for 33 years, is puzzled by the suddenness of the decision. Since G.E. acquired the Waukesha factory in 2010, it has invested $ 30 million in it — repairing the roof and even refurbishing the parking lot. "You don't sink that kind of money into a place you plan to shut down," he said.
In his years at the Waukesha engine plant, Mr. Brodzeller had never heard of the Export-Import Bank until this year. "It seems the most benign thing," he said.
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