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* Whoa…
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.
* Crain’s…
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.”
posted by Rich Miller
Tuesday, Jan 31, 17 @ 9:56 am
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Good for Chicago
Comment by Precinct Captain Tuesday, Jan 31, 17 @ 10:09 am
Tells ya something when, despite the Gov’s bluster about Chicago, big-name downstate firms opt to relocate there.
Comment by Arsenal Tuesday, Jan 31, 17 @ 10:11 am
Who’s next? Deere or State Farm?
Comment by jerry 101 Tuesday, Jan 31, 17 @ 10:13 am
Great example. So why is it that we want to invite more of these predatory multi nationals to our state? Obviously they don’t care about our people. It’s a “business decision”. Chasing these companies is shear folly. It’s why Intersect Illinois is now leaderless with Jim Schultz leaving. You can’t win in this fight.
MAINSTREET NOT WALLSTREET!
EMPOWER MID-SIZED AND SMALL COMPANIES!
THE BIG FISH SHOULD BE ON THEIR OWN.
OUR STATES’ BUSINESS IN NOT YOUR PROFIT!
Comment by Honeybear Tuesday, Jan 31, 17 @ 10:13 am
I don’t buy the travel excuse. It’s quicker portal-to-portal at times to get in and out of the international terminal at O’Hare via Peoria puddle-jumper than it is on the expressways.
The Big Cats just want more and better options on golf courses, restaurants, shows, clubs, schools — probably in that order.
Just like ADM.
At least we were spared the fiction of the “nationwide” search for a new HQ. But I suspect there are some state and city handouts in the offing for this alleged “job creation.”
Still, a nasty blow to their “hometown.” The folks there were counting on that new downtown HQ for long-term stability and growth. The CAT HQ has been Peoria’s calling-card to the world.
Loyalty is one-way street with many of these multi-national execs. A lot of them are short-timers, looking to bump up the stock price for a few quarters, cash out their options and move on to the next gig.
Comment by wordslinger Tuesday, Jan 31, 17 @ 10:17 am
Doesnt seem to be a business decision but about executive preferences over the committment made to Peora.
Comment by Liberty Tuesday, Jan 31, 17 @ 10:18 am
Of falcons and historical buildings…
http://www.pjstar.com/news/20160619/high-atop-peoria-baby-peregrine-falcons-may-represent-first
http://www.pjstar.com/article/20150228/NEWS/150229203
Comment by Anon221 Tuesday, Jan 31, 17 @ 10:20 am
I think they were getting feedback from executives they wanted but couldn’t hire. The idea of moving to Peoria is a hard sell. Of note, the headquarters will be in the Chicago AREA. Burbs may be in play.
Comment by Bogey Golfer Tuesday, Jan 31, 17 @ 10:25 am
wordslinger- CAT has their own private hangar at the Peoria airport. So portal-to-portal is a non-issue. I think the CEO just wants to live in Chicago, and is using the cost of demolition of the Chase Bank block and low returns as the pushing point.
Comment by Anon221 Tuesday, Jan 31, 17 @ 10:29 am
Which downstate legislator is going to “retaliate” by filing a bill to have the rest of the state split from Chicago?
Comment by Telly Tuesday, Jan 31, 17 @ 10:31 am
Word is right.I would add these guys were a big help for Trump not that he is going to do anything about it.
Comment by David Tuesday, Jan 31, 17 @ 10:31 am
===Caterpillar has 12,000 employees in Peoria, Potts said, “and that’s not going to change.” The central Illinois city “is still our hometown.”===
You’ve done nothing but shrink that number in my lifetime. Forgive my skepticism.
Comment by GraduatedCollegeStudent Tuesday, Jan 31, 17 @ 10:33 am
lots of companies want to relocate to the city….see McDonalds….because younger employees want city life. walkability and rapid transit. the bike lanes all over Chicago are also because of this desire of techies especially for that type of transport. apartments constructed at metro and L stops all over the region so folks can live next to non car transportation. not my thing, but it is a thing.
Comment by Amalia Tuesday, Jan 31, 17 @ 10:35 am
This should fire up the downstate GOP “death to all things Chicago” caucus. The same crew that bashes Chicago but sure lovse them some Chicago fundraising.
Comment by Give Me A Break Tuesday, Jan 31, 17 @ 10:36 am
This strikes me as maybe the one of the few things Trumpians emotionally “get,” and a lot of my fellow Democrats don’t.
There is an increasing clustering of business and money and The People Who Make The Decisions in a handful of urban-metro hubs. You take the Caterpillar heads out of Peoria, where they see it every day, they’re just going to stop caring as much about the town of Peoria, full stop. We’re seeing too little locally-owned or at least locally-run businesses in the USA these days, and too much growing monopoly. People in areas where nobody around them actually owns the businesses they work in, get resentful, and they have a point.
Trump’s got no solution of course. He’s going to cater to these voters but I bet he’s probably continue to encourage monopolies and consolidation, because that’s the standard GOP way - which is going on net to continue to benefit New York and Chicago and these other big urban hubs. I know he says otherwise, but when it comes to cracking down on the rich and corporations Trump’s a phony populist. Politics is weird.
Comment by ZC Tuesday, Jan 31, 17 @ 10:45 am
They want to hide from the rest of the company when they make the next set of disasterous decisions that put revenues in line with their zero profits
Comment by David Tuesday, Jan 31, 17 @ 10:50 am
Not that long ago Cat had +20K hourly workers in IL now about 6K. The announcement should make nice homes cheaper. Good for docs and Bradley profs.
Remember a lot of this is due to $2 billion mistake Mr Big CAT made a few years ago when he bought an overpriced mining equipment manufacturer.
Comment by Anonin' Tuesday, Jan 31, 17 @ 10:52 am
Most of my life has been in downstate Illinois. Yet another dagger. And I fear Jerry 101’s statement of “who’s next? Deere or State Farm?”
Comment by Shemp Tuesday, Jan 31, 17 @ 10:57 am
It seems like a reasonable decision to me and it is still in state. There are probably a lot of business contacts in Chicago. I am just glad they aren’t moving to Texas to oversee the construction of the “Wall.”
Comment by A Jack Tuesday, Jan 31, 17 @ 11:02 am
Discussing this on the 21st on NPR Illinois right now.
Comment by Anon221 Tuesday, Jan 31, 17 @ 11:07 am
As long as they stay within our borders, seems ok for Illinois as a whole.
Comment by Patient Tuesday, Jan 31, 17 @ 11:08 am
“company’s Board of Directors opted to move global headquarters to an area where the global marketplace is in easier reach.”
If they move to the city that has the best schools in the country, we will know why they moved.
Comment by Anonymous Tuesday, Jan 31, 17 @ 11:25 am
Very,very scary. I agree with Wordslinger@10:17 darn near word for word.
Comment by Blue dog dem Tuesday, Jan 31, 17 @ 11:28 am
Let others debate the quality of life issues between Peoria and Chicago. Caterpillar lists
twenty six different subsidiaries in China alone
with an unknown number of facilities on their website. Can international companies operate without international airports in todays environment?
Comment by Illinoisvoter Tuesday, Jan 31, 17 @ 12:02 pm
Illinoisvoter- Peoria, believe it or not, is an international airport, including a brand new Ray LaHood International Terminal (https://www.flypia.com/news.php?a=item), and it is a Customs Port of Entry. Also, as I stated earlier on this thread, CAT has their own private hangar and does a lot of international flights from Peoria.
Comment by Anon221 Tuesday, Jan 31, 17 @ 12:11 pm
Well Tipsord is from here, so I don’t see SF going to Chicago any time soon. If SF pulls the plug on BloNo, they aren’t going to Chicago, they’re going south.
Comment by Rayne of Terror Tuesday, Jan 31, 17 @ 1:23 pm
@Anon221: per the PIA website, the international terminal (2 gates) are being planned for flights to Mexico and the Caribbean, as well as for cargo flights. My guess is those who need to travel to Sydney, London or Beijing do it from O’Hare.
Comment by Bogey Golfer Tuesday, Jan 31, 17 @ 1:38 pm
Wheels up to wheels down, Peoria to O’Hare, is 28 minutes. Gate to gate, 47 minutes.
For where these Big Cats are going to be living or working in the Chicago area, 47 minutes from door-to-gate at O’Hare would be a victory, any day of the week.
The argument that “speed and agility for our senior leadership team to be able to travel around the globe is very important” is a phony.
What’s even worse is how CAT strung along the folks in Peoria on the promise of that Downtown HQ. That’s just nasty.
Check out the “Caterpillar Community” promise for Peoria in the link below. Sure looked sweet, and I bet a lot of folks made big plans around it. Gov. Rauner was there for the announcement. I wonder if he feel’s burned.
http://www.caterpillar.com/en/news/caterpillarNews/careers/caterpillar-reaffirms-its-commitment-to-illinois-and-peoria-as-companys-global-headquarters.html
http://www.travelmath.com/flying-time/from/Chicago,+IL/to/Peoria,+IL
Comment by wordslinger Tuesday, Jan 31, 17 @ 1:38 pm
Bogey Golfer- again, CAT has it’s own jets and makes multi-national flights. They don’t have to go to O’Hare.
http://www.chicagobusiness.com/article/20110521/NEWS07/110529979/corporate-chicagos-private-jet-setters-topped-by-caterpillar-abbott
https://ig.ft.com/sites/business-jets/data.html
http://projects.wsj.com/jettracker/#a=&d=&e=2011-01-01&m=grouped&o=Caterpillar&p=0&s=2007-01-01&sort=d&t=&v=table
Comment by Anon221 Tuesday, Jan 31, 17 @ 2:17 pm
“As long as they stay within our borders, seems ok for Illinois as a whole.”
Maybe in a strictly financial sense it is. But will the added value to Chicago and the burbs — which already has lots of high-paid and high-powered corporate exec jobs — necessarily balance out the loss (not just of jobs but of status) inflicted on Peoria and on downstate in general?
Comment by Secret Square Tuesday, Jan 31, 17 @ 2:27 pm
Note also that Cat isn’t building any new facilities, it’s just renting/leasing existing ones — which means HQ can now can pack up and leave IL if things go south (pardon the pun) even more readily than it left Peoria. I would not be surprised if they start regularly or semi-regularly threatening to do just that.
Comment by Secret Square Tuesday, Jan 31, 17 @ 2:34 pm
Tough balancing act for Bustos.
Outside of politics for Peoria this is a tough hit. Need to build off of Bradley and medical field in Peoria. With consolidation of wealth growing in Chicago land area, school funding has to change.
Comment by Almost the Weekend Tuesday, Jan 31, 17 @ 3:39 pm
== the vast majority of our employees in Peoria will not be relocated==
They will be downsized, and we won’t have to see the remaining few that are left behind.
Comment by Lost in Translation Tuesday, Jan 31, 17 @ 3:48 pm
It’s two things most likely. Recruiting is tough in a community like Peoria. If you are a young professional with good skills is Peoria high on your list? This doesn’t mean I think Peoria is awful, it’s just the reality of how younger professionals look at their choices. The second thing is that executives want to live in a different place. Anywhere not in a fairly large metro area is having problems recruiting as people are not place bound as they used to be–at least young professionals.
This is part of what is killing rural economies. If you do not have enough labor in the areas you need, you have to move to where it is. Or, if you work in a lower skill business, you can bring in recent immigrants.
State Farm probably is a bit closer now that the Rusts stepped down, but Tipsord is a local. When a nonlocal takes over thats when it will likely move. Or at least move the leadership team.
Comment by ArchPundit Tuesday, Jan 31, 17 @ 4:45 pm
And Central Illinois takes another hit. *sigh*
ADM HQ relocation, Mitsubishi shutdown, State Farm hub worker relocations, public university cuts, state government turmoil, a slumping farm economy, and now Caterpillar HQ relocation…
My goodness, I can’t help but worry about the economic future of the I-74 to I-72 corridor.
Would love it if a 2018 candidate for governor took an interest in this subject. I know Rauner won’t.
Comment by hisgirlfriday Tuesday, Jan 31, 17 @ 8:06 pm
The big can live bigger in big town. Questions of big footprints put off for another day.
Comment by Vole Wednesday, Feb 1, 17 @ 9:13 am