Chervon North America to move headquarters to Illinois
The company plans on moving its white-collar workforce to Naperville, while keeping its manufacturing plant in Michigan.
Chervon, a Chinese-owned power tool manufacturer, is moving its North American headquarters to Naperville, Ill. from Grand Rapids, Mich., Crain’s Chicago Business reported. Chervon will move into an unoccupied 124,000-square-foot building along the I-88 corridor originally built for office and research purposes for Swedish manufacturer SKF Group until the company cancelled the move in 2015 and opted to sublease the building.
Chervon plans on consolidating 75 positions from its current headquarters in Grand Rapids, as well as from its Illinois offices in South Barrington and Geneva. The Naperville location will also gain 37 employees from Chervon’s acquisition of Mount Prospect-based Robert Bosch Tool’s Skil and Skilsaw brands, according to the Chicago Tribune.
And new jobs are also on the way.
Chervon plans on hiring 25 new workers in 2017 and another 75 in the next three years.
Joe Turoff, chief marketing officer for Chervon North America, cited the building’s location and the skills of the suburban workforce as the prime reason for the move.
“Considering the location of our current employees, Naperville seemed like the perfect city,” Turoff told the Chicago Tribune. He added, “Naperville is a perfect location for talent acquisition.”
However, Chervon currently has no plans to move its manufacturing facility from Michigan. The employees moved to Naperville and new hires going forward will be in white-collar positions including in research and development, industrial design and sales and marketing, Crain’s Chicago Business reported.
While this move is ultimately good for Chervon and Naperville, it mirrors the overall jobs problem in Illinois.
From October 2015 to October 2016, the greater Chicago area, where white-collar and service-sector jobs dominate, saw 33,500 new jobs. However, over that same period, downstate Illinois, which relies on manufacturing, lost 2,700 jobs. This makes the net jobs growth for Illinois 30,800 jobs, with all of it concentrated around Chicago.
While Chicago and its surrounding suburbs benefit from a close proximity to major transportation hubs as well as a larger demand for white-collar and service employees, the rest of the state is not so lucky. Downstate communities like Mossville, Peoria and Belvidere depend on manufacturing and blue-collar jobs.
Chervon’s plan to keep its manufacturing in Michigan and move its headquarters to Naperville should come as no surprise. It is simply the continuation of a sad trend of slow growth around Chicago, with nothing for the rest of the state.
Illinois has some of the highest property taxes in the country, the highest workers’ compensation costs in the Midwest and lacks a statewide Right-to-Work law, all of which puts it at a competitive disadvantage for attracting manufacturing jobs.
However, Michigan is different. After the Great Recession, Michigan implemented pro-growth reforms including cutting taxes and passing Right to Work. These reforms, in addition to the restructuring of the auto industry, have revitalized Michigan’s once decimated manufacturing sector. In 2015 alone, Michigan gained 11,300 manufacturing jobs while Illinois lost 6,200.
And Illinois’ jobs crisis and harmful economic policies are having an effect.
From July 2015 to July 2016, Illinois lost a record 114,000 people in net migration to other states. While out-migration from the Rust Belt is higher than the rest of the country, Illinois’ net migration is an outlier, even in the Midwest. After adjusting for state population, Illinois’ out-migration rate is 3.2 times higher than Michigan’s. And the biggest group leaving Illinois is working age adults.
Michigan’s comeback is proof that Illinois can change course. The Land of Lincoln can address the out-migration and manufacturing crises with pro-growth policies that will benefit the whole state, not just Chicago and its suburbs.