Capitol Fax.com - Your Illinois News Radar

Motorola Mobility will lose tax incentives with cuts… At least for now

Posted in:

Illinois

* According to Motorola Mobility, these layoffs mean that the company’s state tax incentives are “suspended”…

Motorola Mobility will move just 2,250 jobs when it moves its headquarters from Libertyville to Chicago’s Merchandise Mart, not the 3,000 jobs previously announced, as a result of Google’s announcement Monday it plans to cut 4,000 jobs worldwide in its wireless phone business.

For weeks, Mayor Rahm Emanuel has been touting the Motorola jobs coup as evidence of Chicago’s emergence as one of the nation’s technology centers.

Mayoral spokesman Tom Alexander acknowledged Monday that Motorola Mobility’s surprise announcement is a blow for Chicago.

It will reduce by 25 percent — or 750 jobs — the number of employees that Motorola Mobility will be moving to Chicago.

“Any time there are job losses, it’s not ideal, but this is an important step to make the company healthy for a long time,” Alexander said. “They’re still taking three and a half floors [at the Mart]. They’re still…making a $300 million commitment to Chicago [and] taking the same-sized lease. And they have every intention of growing the head-count once they get to Chicago. They still want to develop new technologies and advance their business. None of that changes.”

* The mayor’s office believes the layoffs are just temporary…

Last year, Motorola Mobility agreed to retain a local workforce of 2,500 workers and make $600 million in investments in exchange for tax credits of more than $10 million a year for 10 years. The layoffs announced on Monday will drop Motorola Mobility’s Chicago-area workforce below the 2,500-worker threshold needed to qualify for state incentives, Erickson said.

Those incentives “will be suspended until we have at least 2,500 again,” she said.

* Meanwhile…

Chicago Mayor Rahm Emanuel and commercial real estate firm U.S. Equities Realty said United Continental Holdings Inc. (UAL) will move its corporate headquarters to the Willis Tower in downtown Chicago from its Elk Grove Village campus.

The Willis Tower is already home to United’s network operations center. After the move, United will occupy about 25% of the building and has extended its lease through 2028.

In a joint release, the mayor’s office and Chicago-based U.S. Equities Realty said United began moving its headquarters downtown in March 2007 and started moving its operations into Willis Tower in the fall of 2010. The new deal gives United 16 floors throughout the building.

Maybe he can get Sears to move back, too, and then change the name to the Sears Tower. Kinda has a ring to it, no?

posted by Rich Miller
Monday, Aug 13, 12 @ 9:58 am

Comments

The only thing worse than governors racing to the bottom trying to poach neighboring states’ businesses is a Chicago mayor hustling to poach businesses from his own metro area.

Produces nothing new but ego-stroking press releases.

Comment by wordslinger Monday, Aug 13, 12 @ 10:14 am
I’ll wait for Quinn’s reaction.

Comment by Wensicia Monday, Aug 13, 12 @ 10:27 am
And yet again we see an unintended consequence of having the government pick winners and losers by giving specific tax breaks to specific companies. Geesh.

Comment by Cincinnatus Monday, Aug 13, 12 @ 11:49 am
@Wordslinger -

Actually, its a smart long term move for companies concerned with:

1) Attracting and retaining the best work force
2) Expanding their business network
3) Gaining a technological edge

Illinois’ transportation network is centered around downtown Chicago. When real estate prices were ballooning, you could convince folks to sell their home in the south suburbs or drive all the way from downtown to the exurbs. Few people can or want to do that any more, so locating downtown enables you to draw from a much larger pool of prospective workers.

Most important business relationships are either established or stewarded informally: you work out together at the same club, your kids attend the same school, you serve together on the board of the same nonprofit group. Locating downtown makes it much easier to establish and nurture those relationships.

Finally, Chicago is a global hub for the internet. Libertyville and Hoffman Estates are not.

Comment by Yellow Dog Democrat Monday, Aug 13, 12 @ 12:24 pm
YDD, you’re spinning pretty hard there, but I’m not buying most of it. Still looks to me like intra-metro poaching, not really growing anything.

I do a lot of work up north. Quite often, like thousands of others, I take Metra out of Chicago. Once I get to Lake-Cook Road, or Braeside, PACE is waiting to shuttle us all to Walgreens, or Discover, or Allstate, or Takeda, or Baxter, or UL….

Smooth as can be. I don’t see the pool up there being any different than that in the city. In fact, a lot of folks who work in those places live in the suburbs, too. It’s the same metro workforce, whether downtown or in Deerfield.

As far as tecnological infrastructure, I haven’t noticed anyone communicating with tin cans and string. Walgreens runs its 8,000 stores across the country from a suite of servers and computers on Wilmot Road.

When it comes to the long-term, Google’s plans for Moto Mobility became a lot clearer today. They’re much more interested in owning Motorola’s patents than growing that division.

Comment by wordslinger Monday, Aug 13, 12 @ 1:08 pm
@wordslinger -

That works fine as long as you happen to live in/near downtown or along the Metra line to the particular suburb you are trying to reach.

Not see easy if you live on the West Side or South Side.

And you may do “a lot of work up north.” But that’s a much different story than needing to commute there five days a week.

I know many people making reverse commutes. Few are happy about it.

Comment by Yellow Dog Democrat Monday, Aug 13, 12 @ 2:06 pm
–Not see easy if you live on the West Side or South Side.–

I live just west of Austin. I ride the rails, but it beats driving. And no one ever said making a buck was easy.

Comment by wordslinger Monday, Aug 13, 12 @ 2:08 pm