February 9, 2012

Illinois' problems with job creation were highlighted during the week when long-time Illinois company, Caterpillar, acknowledged the state's poor business and economic climate would have prevented them from considering Illinois for a significant expansion

Almost a year ago, Caterpillar Inc. made headlines when a private letter penned by Chairman and CEO Doug Oberhelman to Gov. Pat Quinn was leaked to the media. The missive outlined CAT’s concerns that the state’s massive tax increase would undermine the company’s ability to remain profitable.  This week, fears the company would bypass Illinois for greener pastures were realized.

On Feb. 7, an e-mail was leaked to the Peoria Journal-Star that Caterpillar—prompted by logistical deficiencies, and reinforced by the state’s inhospitable tax policies and bleak budget outlook—is bypassing Illinois to build the company’s new North American manufacturing plant in North Carolina. In a letter to Peoria County, the CAT facility selection team cited, “previously documented concerns about the business climate and the overall fiscal health of the state of Illinois,” that make it impractical to expand in Illinois.

As the largest private sector employer in the state—employing more than 23,000 Illinoisans—CAT’s decision is a blow to the Peoria area and the state as a whole. In the past, Caterpillar has lamented Illinois' excessive workers' compensation costs, pointing out that the cost for an employee with an identical injury is more than seven times higher in Illinois than at a similar plant in Indiana. Senator said that serious efforts must be made to right the state’s fiscal ship, roll back the Democrats’ tax increase, and reform Illinois’ tedious regulatory system.