Caterpillar Inc. has scrapped plans to build a new office complex in Downtown Peoria and will move its global headquarters to the Chicago area by the end of the year.
The upper echelon of executives, including newly installed CEO Jim Umpleby, will begin relocating later this year, with up to 100 employees total moving by year’s end. About 300 employees will work in the new office at an as-yet undecided location once the transition is complete. […]
The [company’s restructuring] contributed to $2.3 billion in savings in 2016, but sales and revenue for last year still were more than 40 percent below peak levels of 2012. Umpleby said that decline is a fundamental reason the company’s Board of Directors opted to move global headquarters to an area where the global marketplace is in easier reach. […]
“I understand it is a big deal, and it is not a decision that we made lightly. As we step back and looked at what is most important, what’s most important for us is to get Caterpillar growing again and for us to make the company successful,” Umpleby said. “And I clearly recognize it will be disappointing, it will be tough. This is not easy. I clearly recognize that. But again I think it’s the right thing for Caterpillar to do in the long term.”
* The same thing happened with ADM not too long ago. Execs want to live in or next to a big city, with big city amenities and access to transportation hubs. From the Peoria paper’s interview with the CEO…
We have decided to locate a small, lean headquarters team, a team of senior executives, in the Chicago area to have better access to flights. About two-thirds of our business over the last five years has come from outside the United States. We see a lot of growth coming in the international markets, and we believe that speed and agility for our senior leadership team to be able to travel around the globe is very important. I do want to emphasize that the vast majority of our employees in Peoria will not be relocated. And again, both of these decisions, although they seem related, are independent decisions. They’re very much focused on allowing Caterpillar to grow and prosper again. […]
I suspect we’ll start with 100 employees, probably less by the end of the year. And when this new office is up and running, it will probably be around approximately 300 employees. One thing I want to make clear is we’re not moving the top 300 people to Chicago. That’s not happening. Many officers will continue to be in Peoria. We’re talking about the executive office, maybe a couple of the vice presidents. It will be a small group, and then, as with any lean headquarters, there will be support staff around, including a few key finance functions, human resources and members from the legal department. […]
There will be more vice presidents in the Peoria area than there will be in our new location. We have over 12,000 employees in the Peoria area, and we’ll still consider Peoria our hometown. This is where we grew up, this is where our employees are. We’ll be here a lot, so you’ll see us knocking around town. It won’t be a situation where we’re gone. We’re not looking for a building the size of AB (the current Downtown Peoria headquarters) to fill up. We’re not going to build a building. We’re going to lease space in an existing building.
Caterpillar already has a footprint in the Chicago area. There are operations in LaGrange, Joliet and Aurora, though the company is considering ending manufacturing in Aurora.
The company also houses its digital and analytics team in the Merchandise Mart. But the new headquarters will not be at any of those locations, and the employees at the Merchandise Mart will not be moved to the new headquarters, wherever it is situated.
Caterpillar has 12,000 employees in Peoria, Potts said, “and that’s not going to change.” The central Illinois city “is still our hometown.”