Caterpillar announces it will add 600 jobs to new Arizona facility
Caterpillar’s plans to bring new jobs to Arizona demonstrate how Illinois politicians’ planned tax hikes and failure to make needed regulatory reforms harm the state’s manufacturing sector.
Peoria, Ill.-based Caterpillar Inc. announced May 3 that it will add 600 jobs to a new Tucson, Ariz., facility over the next five years.
According to their spokesperson, many employees in executive management, engineering, product development and support positions will move to the new Arizona facility from offices all over the country, including Illinois.
Caterpillar hasn’t opened a new facility in Illinois in decades, and it’s no surprise. As CAT increasingly locates its production facilities in other places, it makes sense for the company to move management, engineering and product development jobs closer to the new production facilities. Without knowing whether Illinois could have competed to attract these 600 jobs, it is absolutely clear that Illinois is not attracting the long-term investments that Caterpillar is making when it decides where to grow its future.
CAT executives haven’t been shy to point out why they’re not investing in new production facilities in Illinois. Back in 2012, CEO Doug Oberhelman penned an op-ed in the State Journal-Register that urged the state’s political leaders to enact reforms to help encourage job creation: namely, workers’ compensation reform, a sustainable state budget and tax relief – not a new progressive tax that comes with a $2 billion income-tax hike.
Oberhelman wrote:
“Despite the fact that we have announced plans for dozens of new factories in the last few years and that our work force in the United States has increased by more than 14,500 people in the last 10 years, we haven’t opened a new factory in Illinois in decades. Our work force in Illinois today is at the same level it was 10 years ago. In short, when Caterpillar and most other companies look to locate a new factory in the United States, Illinois is not in the running for such projects. It doesn’t have to be that way.”
But politicians have largely ignored Oberhelman’s sound advice.
Illinois continues to have the weakest manufacturing recovery in the region. All states experienced a manufacturing jobs bottom in 2009 or 2010 – but Illinois has had the worst manufacturing jobs recovery since then.
The state has also been without a budget for 10 months, as politicians have proved unwilling to spend within their means. The Illinois General Assembly sent a budget to Gov. Bruce Rauner in June 2015 that was $4 billion out of balance, which the governor vetoed.
Until state officials get serious about reform, manufacturing will continue to shrink, and the state won’t be able to keep up with the job demands of a growing workforce.
Already in 2016, Caterpillar announced plans to shutter five plants and shed 670 jobs in Illinois and other states as part of a cost-cutting overhaul announced last year. Caterpillar’s East Peoria, Ill., plant suffered the most from these cuts, losing 230 jobs for office and production workers.
Illinoisans in the manufacturing sector have experienced more economic pain and job losses than workers in any other industry. And when production facilities start moving elsewhere, white-collar jobs can follow close behind. To stop the suffering, Illinois must enact reforms to make the state attractive for new investments in production facilities.