CAT announces it will move corporate headquarters out of Peoria

With Peoria and downstate reeling, the Caterpillar move comes at a time of persistent disinvestment in Illinois manufacturing.

Caterpillar Inc. will move its global headquarters to the Chicago area from Peoria, the company announced Jan. 31. In an interview with the Peoria Journal-Star, Caterpillar CEO Jim Umpleby said he expects 300 employees to be housed at the Chicago office.

“We have over 12,000 employees in the Peoria area, and we’ll still consider Peoria our hometown,” Umpleby said.

Caterpillar has operated out of Peoria since the early 1900s, but will scrap plans to build a three-tower office complex there as part of the move.

Downstate despair 

The Caterpillar relocation will not affect a majority of its Peoria workforce in the near term. But it signals continued disinvestment in the area. And it echoes a disturbing trend in the Land of Lincoln.

Illinois jobs data reveal a tale of two states.

While the greater Chicago area has added more than 110,000 jobs compared with before the Great Recession, the rest of the state has lost nearly 43,000 jobs over the same time. Peoria is a case study in what’s driving this divergence: blue-collar opportunities are disappearing statewide as white-collar jobs emerge in Chicago.

Moody’s Investors Service recently named Peoria as one of four downstate metro areas now experiencing a recession. The Peoria metro area has lost nearly 30 percent of its manufacturing jobs in the last 10 years, according to the Bureau of Labor Statistics. The area’s labor force is at a 12-year low.

The move is not as much of a win for Chicago as it is a loss for struggling Peoria-area families.

Manufacturing meltdown

Lynn Cisco is a member of one manufacturing family who left Peoria for greener pastures. Her husband works for Caterpillar as a service engineer, and was transferred to Lafayette, Indiana, in 2015.

“I’m convinced Caterpillar is slowly, stealthily moving out of Illinois. The world headquarters might stay in Peoria but the manufacturing is absolutely leaving,” she said earlier this month.

Now the world headquarters is leaving, too. And Cisco is far from the only one who has witnessed Caterpillar’s slow walk to other states when it comes to bending, forging and assembling.

Caterpillar’s former CEO Doug Oberhelman spelled it out in a 2011 letter to state lawmakers, in which he detailed exactly what needed to be done to help Illinois compete for quality jobs and business investment. His recommendations included genuine workers’ compensation reform and a balanced state budget that offers tax certainty and tax relief in the long term.

“Business leaders are making decisions today on where to invest in the future,” Oberhelman wrote. “Illinois must act now, with a bipartisan sense of urgency, to position itself for future job creation that is being discussed in boardrooms all across this country.”

“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.”

The January release of Illinois’ December 2016 jobs data showed the effects of political inaction on policies that are crushing Illinois manufacturers, including the region’s highest workers’ compensation costs and some of the highest property taxes in the nation.

These numbers revealed what too many production workers already know: Manufacturing is collapsing in Illinois. The state lost 11,000 manufacturing jobs in 2016. No other sector suffered more.

For some perspective, that’s comparable to losing every manufacturing job in Decatur. Or every manufacturing job in Springfield and Champaign combined.

If this trend continues, by the end of 2017 Illinois will have no more manufacturing jobs than it did during the worst months of the Great Recession.

In other states, this might provoke a deafening response from Statehouse leaders. But Illinoisans now find themselves amid talk of yet another massive income tax hike with meager attempts at reform.

Caterpillar’s relocation may not immediately affect manufacturing workers. But they’re being pummeled regardless. And Springfield isn’t listening.