Quinn: 'Caterpillar's not leaving Illinois'

March 27, 2011 8:20:17 AM PDT
Caterpillar raised the possibility that it could move out of Illinois, and higher taxes are getting the blame.

The company is based in Peoria, Ill., and employs thousands of people in the state.

The possibility of a relocation came to light after a letter written by Caterpillar's CEO to Gov. Pat Quinn was leaked to the media.

The correspondence says at least four states have approached the company about moving since Illinois raised its income tax in January.

But nothing is written in stone and a spokesperson for Caterpillar says the letter, which they say they did not intend to be made public, was only an attempt to open a dialogue and certainly not a threat.

Caterpillar officials say if Illinois doesn't shape up its business climate, the heavy equipment maker may have to ship out.

"I'm sure that Caterpillar will do the best thing for the customers," said Caterpillar employee Jarod Washington.

"I've heard the taxes are pretty high. I understand if they do. I don't agree with it though," said Caterpillar employee Matthew Strait.

In the letter, Caterpillar CEO Doug Oberhelman writes:

"I want to stay here. But as the leader of this business, I have to do what's right for Caterpillar...The direction that this state is headed in is not favorable to business."

Caterpillar also says the tax hike will cost them $40 million.

So far, Caterpillar's business is being courted by Texas, Nebraska, Virginia and South Dakota.

They join attempts by Wisconsin, Indiana and New Jersey to lure away companies that feel they can no longer stay in Illinois.

Caterpillar's 23,000 Illinois workers account for nearly a quarter of its total workforce, but in recent years, the company has moved some Illinois jobs to other states, as well as to Asia and Latin America.

Last summer, Quinn lobbied for a new Caterpillar excavator plant to be built here, but instead it went to Texas, one of the states now trying to lure the company away.

"Catepillar's not leaving Illinois. They have well-skilled workers who know how to get the job done. They just signed an agreement with the United Auto Workers. I think it's for six years," Quinn said.

At an event Saturday to announce a new trade agreement with Canada, the governor said Illinois' international reputation is one reason companies should stay here.

"We know how to work with other places, other countries like today, working with other folks from Manitoba, Canada, opening up new markets for Illinois firms. That's what I do as a governor," Quinn said.

Quinn has a meeting scheduled with Oberhelman on April 5.

Some State Republican leaders say the letter from Oberhelman confirms why they fought against the tax hike.

"I think Governor Quinn has made a serious error here, and we will see the potential departure of major employers like Caterpillar because of mistakes Governor Quinn has made," said U.S. Sen. Mark Kirk, R-Ill.

"If Illinois can't cut spending and continue to spend without making cuts we'll have a $22 million deficit in 2016. Business leaders know something's going to happen," said Senate Minority Leader Christine Radogno, R-Lemont.

Stephanie Slyvester, the wife of a Caterpillar employee, says any move will cost her family much more.

"My husband will be out of work, and right now he's supporting a family of seven, so I don't know what we'll do," Slyvester said.

A Caterpillar spokesperson would not speculate the any possible timetable and at this point there is no deadline in place.

ABC7's attempts to get a response from the United Auto Workers, the union that represents workers there, were unsuccessful.