WE ARE ILLINOIS
What is Caterpillar trying to tell Illinois?
By Greg Hinz - Crain's Chicago Business Columnist
After watching and listening and making a few phone calls the past two days, I've reached a couple of conclusions about just what Caterpillar Chairman and CEO Doug Oberhelman was trying to do with that leaked letter suggesting the company might move its headquarters out of state.
One is that the company wasn't threatening as much as trying to send a message: Big segments of the business community think Illinois has become a terrible place to start or run a business.
Two: Though we can disagree on details and solutions, we ought to listen to the message, because it contains much truth.
In his now-famous letter to Gov. Pat Quinn, Mr. Oberhelman said that he likes living in Illinois and doesn't want to leave, but Springfield lawmakers "seem to make it harder every day."
He then went on to say that he wasn't making a threat, but offering to help.
Mr. Oberhelman, indeed, has a reputation of being more involved in Illinois doings than some of his predecessors. But, like them, he's been slowly but surely shifting new investment out of state for some time.
Some of that is inevitable. With growth of international markets, Peoria-based Cat naturally is going to open more plants closer to its emerging customers.
Some of that is not inevitable. While the company has expanded a bit recently in Decatur, it's done more on new plants in places like Texas, which, like it or not, have lower costs.
"He really didn't say anything new that hasn't been said before," reports one top business hand who asked not to be named. "I think what he was talking about was an attitude, an obvious lack of interest in job creation here."
Team Quinn certainly would dispute that. This governor has talked more about job growth than any state chief executive in a while, and he has brought home some big investment bacon.
But, over the past two decades or so, there is absolutely no doubt that Illinois job growth has lagged not only the nation, but much of the Midwest. And recent actions — not only the income tax hike but the tabling of workers compensation reform, suspension of the state's carry-loss-forward tax provision and the delay in extending research credits — have only hurt.
Mr. Oberhelman's letter represents "frustration at the direction the state is headed," says Illinois Manufacturers' Assn. chief Greg Baise. "It was an expression of wanting to help — not an ultimatum."
I think that's about right. If Mr. Oberhelman really was going to drop an ultimatum, he would have done so a couple of months ago, just as the Legislature was considering that income tax hike.
Now, some out there may accuse the CEO of a bit of world-class whining. I'll grant you a little of that. But actions speak louder than words.
In the case of Illinois, the actions that count are job creation — out of state — by Caterpillar and others. That's not good for anyone here.
Hopefully Mr. Oberhelman and Mr. Quinn will get something done when they meet next month. If Mr. Quinn wants to make a peace gesture first, he could quick-start negotiations on workers comp reform. By all accounts they're stuck in neutral, even though officials in both political parties concede Illinois' system is much richer than those in other states.
Like I said, actions speak louder than words.
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