* As you’ve probably read by now, Caterpillar Chairman and CEO Doug Oberhelman penned an op-ed over the weekend explaining why his company didn’t choose Illinois for a new factory. The heart of the matter…
What’s the solution? For starters, Illinois needs to adopt a long-term sustainable state budget that relieves pressures on taxpayers. Unlike some, I do not favor an early rollback of the temporary tax increases in Illinois; but they should expire as planned. Keeping the temporary tax increases in place for now gives the state time to develop a multiyear plan that balances the state budget. In addition, the state needs to dramatically lower workers’ compensation costs. Some say these changes are not politically possible in Illinois. But if Illinoisans put pressure on both parties to make these types of improvements, I think the state can become a place that can successfully compete for business growth and new jobs.
Let me be clear. Caterpillar is not threatening to leave Illinois. Rather, we want to grow our presence here. For Illinois to really compete for new business investment and growth, the state must address these matters.
* Gov. Pat Quinn was mostly in denial…
Quinn - who touted an improved business climate earlier this month in his State of the State address - said he was disappointed in Oberhelman’s comments and that Illinois has enacted reforms and tax credits to create jobs. He said Caterpillar officials told him the facility would need ocean access.
“We don’t have any ocean front property in Illinois, so with that particular facility we weren’t in the ball game to begin with,” Quinn said Sunday at an unrelated news conference. “We met with the Caterpillar people and they made it pretty clear that the logistics would drive the decision.” […]
Quinn said that while Caterpillar has voiced complaints about Illinois’ economic climate, Chrysler last week announced it was adding 1,800 workers at its plant in Belvidere. The Democrat said that since Oberhelman’s letter, Illinois has enacted worker’s compensation reform and passed a Caterpillar-backed tax credit for research and development costs. He also said exports in Illinois are up.
* The Tribune reacted harshly…
Look at the results of the new Chicago Tribune/WGN-TV poll of 600 registered voters. We asked them about the outlook for the U.S. and for Illinois.
• 52 percent said the U.S. economy is recovering. Just 21 percent said the Illinois economy is recovering.
• A mere 18 percent said the national economy is slipping. But 47 percent said things are getting worse here.
That gap — optimism about the nation, rank pessimism about Illinois — has been growing of late. You’re a perceptive lot, Illinoisans. National unemployment fell over the course of 2011 while it rose in Illinois, one of the few states to answer hard times by, yes, hiking taxes on citizens and employers.
The takeaway: Regular citizens have a far greater sense of urgency about this state’s problems than their politicians do. We’ve been trying on this page to raise the urgency in Springfield. A state that hikes taxes and chases away job-creators and still can’t balance its books is hurtling to disaster.
Discuss.
* Related…
* Editorial: Caterpillar complaint should hit home
* Editorial: Economic viability not out of Illinois’ reach
* Rutherford Sides with Caterpillar CEO on State’s Business Climate
* Rutherford: Business climate work in progress
* Proposal would have schools take on future pension costs, not debt
- Kimbo - Tuesday, Feb 14, 12 @ 5:54 am:
I though the reason Cat didn’t build the new factory in Illinois was because Illinois didn’t have a east coast port??
Now I am all confused….
- Robert M Roman - Tuesday, Feb 14, 12 @ 6:15 am:
Nah, Cat is just taking the opportunity to attempt some further extortion. It shouldn’t surprise anyone. No one should take it seriously except that it makes great campaign fodder for politicians. And people who are concerned that dollars often trump voters when it comes to policy and elections.
- Michelle Flaherty - Tuesday, Feb 14, 12 @ 6:30 am:
Doug Oberhelman’s communications department should run for governor.
- vole - Tuesday, Feb 14, 12 @ 7:55 am:
CAT and all of us share the same quandary — how do we, via democracy, adapt capitalism with its growth imperative to a world with decreasing capacity for growth and diminishing returns and increasing inequality with what growth we do achieve?
- Sue - Tuesday, Feb 14, 12 @ 7:59 am:
Cat didn’t build the plant here for reasons only known to Cat- whether the reason(s) are related to our fiscal crisis might or might not have played into the decision as perhaps does the fact that they are going to a “Right to Work” state- The bigger issue is that Quinn is a disaster- I wouldn’t mind the income tax hike if he used it for its stated purpose- paying down the exisiting debt- instead it is giving the Governor a license(so it seems ) to look to spend even more money on his “programs for the People”- Illinois’ unemployment rate is going up even while the US rate( and our neighboring states) is going down- We should be recalling Quinn instead of everyone cheering about recalling Walker
- Shock & Awww(e) - Tuesday, Feb 14, 12 @ 8:31 am:
If you read some of the North Carolina print media coverage of CAT, you’ll find a repetition of their emphasis on laying down roots in a community and staying connected to it. CAT has continued opening plants and hiring in N.C. over the past few years.
It doesn’t appear they’re bluffing. It appears they’re putting their money where their mouth is by building elsewhere.
They also state very clearly that they do not want to abandon their home state. It seems genuine. Instead of simply abandoning ship, they’re stating very clearly what they feel would help get Illinois back on track, and have been for the past few years.
Then again, maybe it’s all a ruse to extract additional benefits under Illinois current approach in awarding economic incentive packages. Doubt it, but we’ll see.
- Shock & Awww(e) - Tuesday, Feb 14, 12 @ 8:36 am:
As for the port, ADM, Cargill, Koch, Shell and many other companies find the Peoria port suitable for their purposes.
If anyone cares, more details are available at: http://www.worldportsource.com/ports/USA_IL_Port_of_Peoria_4887.php
It’s larger than one might expect.
- Anonymous - Tuesday, Feb 14, 12 @ 8:40 am:
The business climate didn’t keep CAT from investing $1 billion in Illinois plants between 2008-2010, and announcing another $640 million in Illinois plant expansions in 2011.
From the get-go, CAT said the jobs from Japan were going to be on the Atlantic or Gulf Coasts.
Having said that, Oberhelman’s comments are pretty mild for a political shot. They have plants all over the world; he’s got a lot bigger fish to fry than state government.
At least we won’t have the unsupported hysteria of “CAT moving out of Illinois” this time around.
As far as the Trib goes, well, when the state’s bankrupt largest newspaper beats a constant drum of Illinois as some sort of isolated outpost in the global economy, with the only dynamic that effects business being state government, their poll results are not terribly surprising.
http://findarticles.com/p/articles/mi_m0FZX/is_7_74/ai_n27971880/
http://www.decaturedc.com/index.php?option=com_content
- wordslinger - Tuesday, Feb 14, 12 @ 8:41 am:
Anon 8:40 is me.
- jrm - Tuesday, Feb 14, 12 @ 8:43 am:
Sue, you nailed it. Either CAT wants Illinois to change its geography to be an oceafront state or make it a “right to work” state. I suspect the latter. They closed a plant in Canada! Not because of Canada’s WC system or because of its budget. They closed to get away from the union. That’s what they are doing here. They want to bust the UAW.
- Skeeter - Tuesday, Feb 14, 12 @ 9:05 am:
It seems like a lot of you are having a tough time figuring out what Cat was trying to say. Let me spell it out:
1. For THIS PARTICULAR PLANT, Illinois was never really in the running. There were problems with logistics. It wasn’t going to happen;
2. Cat would very much like to continue doing work in Illinois where it does not have the same logistic issues;
3. The business climate, and in particular, workers’ comp., make it difficult for Cat to expand in Illinois.
Those points do not see contradictory in the slightest. Moreover, the WC numbers for Illinois are pretty bad. WC puts Illinois at a disadvantage even it it puts money in the pockets of WC lawyers and people who do not want to work. Based on my experience in the field, Shameless (on Showtime) could be a WC documentary. Abuses are all over. People who don’t want to work “get hurt” and employers pay.
If we want to really compete, we need comp reform.
- mokenavince - Tuesday, Feb 14, 12 @ 9:37 am:
The 800 pound gorilla in the room has always been
Workers Comp.The feeble attempts that have been made in last few years have done little to help
business.As long as Madigan and Cullerton are running things,I don’t see why a business would
want to move here.As far as Quinn is concerned
he’s just not up for the job of running this State.Sue got it right.
- mark walker - Tuesday, Feb 14, 12 @ 9:46 am:
The Cat CEO was pretty balanced and clear. Let’s just take him at his word. Cat’s committed to Illinois; we shouldn’t lower the corporate tax rate now; we should have a better multi-year fiscal plan; we need more reforms to cut Workers’ comp costs.
That said, it is also clear that we weren’t in the running for this plant from the beginning, regardless of our state policy, and that Quinn’s positive statements about recent wins are true as well.
- gg - Tuesday, Feb 14, 12 @ 9:49 am:
If you need to see the problem with workmans comp,
go to the 8th floor of JRTC any morning and see all th WC layers queing up. Some days there are more than 100.
- gg - Tuesday, Feb 14, 12 @ 9:50 am:
lawyers … sorry
- Michelle Flaherty - Tuesday, Feb 14, 12 @ 9:59 am:
Ummm … does anyone realize that the entire new crop of new workers comp arbitrators and commissioners is up for committee confirmation this week?
So quick to denounce reforms that haven’t even happened yet.
- Mike an Ike - Tuesday, Feb 14, 12 @ 10:09 am:
The bigger question is.How long before Cat starts taking Illinois jobs to their new plant?We are bleeding to death in Illinois and all the Democrats in charge can do is come up with mass confusion.
- Foxfire - Tuesday, Feb 14, 12 @ 10:15 am:
De Nile is a river in Egypt, but not large enough to provide “ocean access” to sites in Illinois.
- Demoralized - Tuesday, Feb 14, 12 @ 10:57 am:
Sue:
The tax increase isn’t being used for new programs. It is being used for bills. Use a calculator and figure out what our bill pile would be if not for the $7B in new revenue.
- Irish - Tuesday, Feb 14, 12 @ 11:05 am:
It only makes sense that most large businesses would want the same thing all of us want in our state government. Some stability, and a sense that our leaders care, are committed to economic recovery, and evidence that someone is at the helm with a plan. We have none of that now.
A while back Rich posted that things in the state were really improving and that we should become more positive. I agree that it seems that indicators are showing some improvement and we can help that by not always being negative. I do also believe however that more of the negativism is coming from the fact that our leaders do not have a plan and don’t seem to care. Some areas are showing improvement but our faith that this is because we are following a blueprint back to growth is dubious.
I have said it before, any business seeking a place to invest in facilities wants someplace with a sense of stability. And we have none of that.
- D.P. Gumby - Tuesday, Feb 14, 12 @ 1:41 pm:
After being rolled by Sears, now every Corp CEO in Ill thinks the state is a soft touch. It’s now a race to the bottom w/ Indiana and it’s anti-union legislation joining the anti-labor status of the solid anti-immigrant southern states. The whole “business climate” is a fraud begun by the anti-lawyer anti-justice crusade by big business. Now it is everyone’s battle cry to get government handouts while CEO’s are grossly overpaid no matter how the business performs. Ah, it feels good to rant….
- Yellow Dog Democrat - Tuesday, Feb 14, 12 @ 3:52 pm:
I viewed the letter as an effort by Caterpillar to extend an olive branch to Democrats in general and change the tone of the debate.
The language and message are remarkably different from what you typically hear from CEO’s and the business associations.
No ultimatums. No partisan attacks.
In response, let me say this.
I recognize that Caterpillar is an important part of Illinois. I’m glad they want to lead this discussion, we can certainly do worse.
Part of that discussion ought to center around one point regarding work comp.
In six years, Caterpillar dramatically reduced its workplace injury incidence thanks to a focused commitment to worker safety. Yet other manufacturers have not. Why not?
It seems to me we need to know why worker safety is such a low priority for some employers and rectify that problem - maybe make worker safety a condition of tax credits, before we entertain shifting the costs of workplace injuries from employers to society.
Cat could play a leadership role here.
- 1776 - Tuesday, Feb 14, 12 @ 5:22 pm:
@ YDD
The same business groups that offered some praise of Quinn’s state of the state address when everyone else was panning it?
- Michelle Flaherty - Tuesday, Feb 14, 12 @ 10:25 pm:
Me thinks the business community may have finally taken a look at the map, the budget situation, how much (or little) they pay in state income taxes and concluded that a few platitudes would be better than public hearings to explain why they get so many tax breaks.
I could be wrong. Maybe Doug O just wanted to send PQ a “be mine” on Valentine’s Day.