Will Quinn Heed Caterpillar?

By Kevin Robinson in News on Mar 30, 2011 1:00PM

The recently leaked letter from Caterpillar Chairman and CEO Doug Oberhelman to Illinois Governor Pat Quinn has been making the rounds around the state, lending itself to a lot of bloviating and freaking out by those who are generally nervous about the future jobs outlook in Illinois. If you're not up to speed on this drama, Oberhelman sent Quinn a letter last week, which was leaked to the press, telling the Illinois governor that he's been courted by other states, to move the company's headquarters out of it's East Peoria home. In spite of the outcry by local politicians (like Peoria's congressman, Aaron Schock), Oberhelman has been pretty upfront with Quinn that he's not threatening to move the company out of state, so much as he's offering to work with Quinn as an ambassador from the business community to find ways to solve the state's fiscal problems while maintaining Illinois's competitive edge among manufacturers.

Among those in the media, Greg Hinz at Crain's and Rich Miller at Capital Fax have been reasoned in their dissection of the matter, pointing out both the possibilities for Quinn if he enlists Oberhelman as his point-man for heavy industry investment in the state, and the long-term problems that Illinois is facing. Miller points to Quinn's knowledge and understanding of manufacturing in Illinois, citing his statement to WREX this week that "I like to work with all the executives but the notion of leaving Illinois is not a good idea. We've had great companies like Ford, Chrysler, Navistar, and Boeing all come here with more manufacturing. They understand we have a good workforce, and if you have a government who wants to work with you, you'll go pretty far." And Hinz notes that Quinn has brought some high-profile jobs investments to Illinois. But both also note that investment in Illinois is lacking. "Over the past two decades or so, there is absolutely no doubt that Illinois job growth has lagged not only the nation, but much of the Midwest," writes Hinz. "And recent actions — not only the income tax hike but the tabling of workers compensation reform, suspension of the state's carry-loss-forward tax provision and the delay in extending research credits — have only hurt." Miller sticks to the facts, pointing to four news releases since 2008 that have Caterpillar opening new manufacturing facilities in Texas, Arkansas and North Carolina.

The Engineering News Record reports that Cat Spokesman Jim Dugan said in an email, "we are looking to help Illinois to become more competitive for all businesses." Back to Woodstock, IL native Oberhelman's letter to Quinn, he says, "I'd like to invest more [in Illinois]," adding that "the direction that this state is headed in is not favorable for business, and I'd like to work with you to change that." The governor has said that he will meet with Oberhelman in Peoria next month, when he stops by Caterpillar to accept an award.

So what does Quinn do? As Hinz and Miller point out, the impediments to business growth in Illinois aren't really tied to the state tax rate so much as to both the perception that Illinois is bad for business and the convoluted regulatory environment. For Quinn, Oberhelman's letter could be the perfect opportunity to push reforms in the General Assembly, while working to attract new jobs to the state.