Concern over Caterpillar's future in Illinois

March 28, 2011 5:45:42 PM PDT
Thousands of employees at Caterpillar plants in Illinois are concerned about their futures after the company's CEO revealed Caterpillar may move out of state.

Company chairman Doug Oberhelman sent a letter to Illinois Governor Pat Quinn claiming the state needs to be more business friendly.

In his letter to the governor, Oberhelman said he's "certainly never considered the possibility of Caterpillar relocating "but I have to admit, the policy makers in Springfield seem to make it harder by the day."

Illinois is headed in the wrong direction for business, Oberhelman says, and he invites the governor to talk about changing that.

"In no way was it a threat. In no way was it an announcement that facilities will close. It was intended to start dialogue," said Warren Dorris, Joliet councilman.

Dorris was also a long-time manager at the Joliet Caterpillar plant. Dorris, like others, believes that Caterpillar is too heavily invested in Illinois with a large skilled work force to just put up a sign that says, 'we don't like the tax hike, so we're all leaving.' But what is a possibility is less investment in Illinois.

"If Caterpillar is planning another plant, they're expanding, they have a new product line, clearly they will consider what other states they should locate that new plant," said Prof. Ronald Marcuson, DePaul University.

The governor's office said Monday that Pat Quinn welcomes open and frank discussions with business leaders and that he and Oberhelman will have precisely that when they meet next week in Peoria.

"Hopefully it ends with changes in the legislation that will reduce the corporate business tax," said Russ Slinkard, Joliet Chamber of Commerce.

Caterpillar has long been a big employer in Will County and throughout Illinois. It's had a plant in Joliet for 60 of Caterillar's 75 years.

"For the CEO to basically in this case call out the governor definitely is sending a bad signal that Illinois is not a good place to do business," said John Greuling, Will Country Center for Economic Development. "The governor needs to go in with an open mind and needs to actually listen to business cause I think the problem we had trying to stop it was nobody in Springfield seemed to listen."

The business concern is that other states will dangle some very attractive carrots for Caterpillar, as Illinois did when it courted Boeing.

"Did Boeing move its manufacturing here? No, they moved their headquarters. There's some danger that Caterpillar would move its headquarters to a more tax favorable state," said Prof. Marcuson.

Caterpillar's chairman is presenting the governor with a business-related award when the two meet April 5 in Peoria. That meeting, ceremony and subsequent tour of the Caterpillar plant in Peoria had been scheduled for some time before Oberhelman authored the letter.