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Can’t Stop A Corporate Caterpillar

Caterpillar is doing very well these days. Last year, its pretax profits were something approaching three billion dollars. Even Bill Gates has to admit that’s a lot of dough. Just about any corporation with the possible exception of an oil conglomerate would be more than happy to trade financial statements. The company has an exceptional product, it has an exceptional service, and it has an exceptional workforce of more than twenty thousand people to help deliver both.

Caterpillar is headquartered in Illinois, a state that would love to have Caterpillar’s finances. Illinois is facing a serious revenue shortfall that is in the billions. Because of the budget woes, new Illinois Governor Pat Quinn recently increased the corporate tax rate from 4.8% to 7.0%. This didn’t sit well with the financial juggernaut Caterpillar. It is now rumored that Caterpillar CEO Douglas Oberhelma is entertaining offers with generous allowances from other states if Caterpillar would move its headquarters out of Peoria, Illinois. Indiana, Iowa, and Texas have admitted to lobbying the company. And Caterpillar, like many corporate entities that have a strong financial portfolio, knows it is sitting in the driver’s seat and there is little doubt that it will take full advantage.

States are clamoring over each other to create jobs. That’s not quite accurate. That would be true if states were working with entrepreneurs and businesses to do something new that didn’t exist before to actually create a job that didn’t exist before. That’s job creation. It is more accurate to say that states are clamoring over each other to steal jobs from other states. States circle each other like vultures looking to pick the bones clean of any peer that might be facing a financial hardship. Illinois raised your taxes? That’s so unfair. Come to Texas where you’ll pay next to nothing to help the social collective. Don’t do that! Come to Indiana where we place so little emphasis on education that we’re cutting school budgets in half. Hey Caterpillar! Come to Iowa because we’re so desperate, we’ll make the schools pay you to move here!

States like Wisconsin, New Jersey, and Ohio are so desperate for corporate America’s favor that they are racing to the bottom of corporate tax rates so much so that they are willing to cut any services necessary and raise taxes on anyone and everyone else who isn’t a business. Hey corporate America! You don’t like unions? We’ll make a law to make unions illegal just for you! And corporate America is doing everything it can to feed this frenzy. If states were sharks, jobs are chum, the blood and guts from slaughtered animals used to work these animals into a hunger induced frenzy. And like a hungry shark, a hungry states act on impulsive instincts to do whatever’s necessary to get the chum.

More and more we should be able to see for ourselves that corporations place little value for on our neighborhoods and communities. As soon as a better deal comes along, a corporation like Caterpillar will do the financial analysis necessary to determine if it’s better for the corporation to pull up stakes for greener pastures. Instead of rolling up its sleeves and doing what it takes to help Illinois get back on its feet, Caterpillar will make more money hiring moving vans to relocate. Hell, Texas might even offer to pick that cost up if they can have a commitment by the end of next week. How can a company like Caterpillar resist?

Caterpillar can resist by remembering that it should be more than just a financial decision. Caterpillar should remember that it is part of a community that is struggling right now and it has the resources to help the state in a time of need. It has done well in Illinois. No doubt it will continue to do well regardless where it calls HQ. But Caterpillar has a long history in Illinois. That relationship should mean something.

Now if the state is making it difficult for the company to do its business, that’s another animal altogether. Hell yes, leave! But if it’s just a matter of the company can do a little better somewhere else where the public officials are more willing to short change their communities to give Caterpillar an even greater edge, then that will certainly come back to bite that community. Sacrificing the investment in schools and other public services for the sole purpose of jobs is a fool’s folly. And when the workforce in the community is so poorly educated that the company is having difficulty, they probably won’t hesitate to abandon that community as well.

And if companies like Caterpillar want to leave a state that they called home for close to a century because they can make more money elsewhere, let them. Obviously, one day somebody is going to come along who is going to have a better financial package to leave and it will be too attractive for the company to pass up.

Now that Illinois knows what little value Caterpillar has in its relationship with the state, maybe it’s time Illinois works to help somebody else develop a new company that can take Caterpillar’s place. Maybe Illinois should play this game as well. Certainly there is somebody out there willing to help communities grow and is ready to make a longer term commitment. Maybe the state should do something to actually create jobs instead of selling its future in a bid to keep jobs with a company that will only leave. It’s just a matter of time.

Thursday, March 31, 2011 - Posted by | Life, Thoughts


  1. This has been front page news in Peoria, needless to say. Reactions have ranged from “let them leave; we are tired of kissing their big yellow *ss” to “oh no..we’ll be just like Detroit or Flint if they go.”

    Comment by blueollie | Thursday, March 31, 2011 | Reply

    • Thanks for the feedback blueollie,

      Just for the record, I’d say don’t let them leave. I mean if the company’s management is that quick to turn, especially when the community needs them to step up to the plate, then it’s only a matter of time before they’re gone. They just don’t have the sense of community that makes them want to stay. The community will be screwed whether they stay or not. Go ahead and take the inevitable lumps, and then do what can be done to nurture the kinds of businesses that will want to stay a part of the community.


      PS – How long has it’s been? It’s really good to hear from you…

      Comment by brotherpeacemaker | Thursday, March 31, 2011 | Reply

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