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Expert: Caterpillar's vague explanation for Texas HQ move leaves behind confusion, hurt feelings in Illinois

Caterpillar HQ Peoria
Tim Shelley
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WCBU

Does Caterpillar owe Peoria and Illinois a straightforward explanation for the company's decision to relocate its global headquarters to Texas?

John Shaw, executive director of the Paul Simon Public Policy Institute at Southern Illinois University-Carbondale, says "yes."

John Shaw introduced as new Director for Paul Simon Public Policy Institute
Steve Buhman/Steve Buhman, University Communi
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Steve Buhman, University Communi
John Shaw

"Cat basically ended a 90-year marriage by sending an email," said Shaw, a Peoria native who previously worked as a business reporter. "And that just is not respectful. Sure, you can get away with it. But that's not respectful to the community. And I think Caterpillar is better than that."

Caterpillar abandoned its previously announced plans to build a new world headquarters in Peoria in 2017. The company's new CEO, Jim Umpleby, announced the earth moving giant's global headquarters would move from to the Chicago area, instead.

Now, four years later, the headquarters is on the move again, this time leaving the Land of Lincoln entirely.

In the wake of Caterpillar's announcement last month, a 2012 op-ed in the Springfield State Journal-Register penned by then-Caterpillar CEO and chairman Doug Oberhelman gained some renewed attention.

At the time, Oberhelman opined that the state's unbalanced budgets and workers' compensation costs made Illinois business-unfriendly.

Shaw said he doesn't believe the state's business climate weighed heavily into Cat's recent headquarters move, however, noting the company first moved its headquarters in-state, from Peoria to Deerfield.

"Illinois' business climate has not changed fundamentally from 2017 to 2022, except probably having improved," he said. "You know, our fiscal situation has improved significantly. Lots of reasons for that. So I think that, is Illinois' business climate perfect? No. Should it be improved? Yes. Do I think this was central to Caterpillar's decision? I don't. I just don't. I don't think there's any evidence to suggest that."

In a June press release, Umpleby said it was in the company's "best strategic interest" to relocate its global headquarters to Irving, Texas.

Shaw said that statement was overly vague and disappointing, calling it "gobbledygook and corporate speak."

"I think there is a commitment to just communicate with people simply and clearly. You know, we're all adults. We don't like to get hard news. But when it's delivered to us in a straightforward, compassionate way, we register the consequences of the information and move on," said Shaw.

There's been a lot of speculation for Caterpillar's reasons for moving the headquarters out of Peoria, and later, out of Illinois. Shaw said it makes sense that living in Peoria may have been a hard sell to younger executives more accustomed to an urban lifestyle, and he said the company's leadership may have found Texas' lack of a state income tax appealing.

A Caterpillar spokesperson didn't respond in June to inquires on why it was determined to be in the company's "best strategic interest" to relocate its headquarters to Texas.

Shaw said while he believes there's an American corporate communications culture discouraging speaking the truth, he doesn't think it's too late for Caterpillar to explain in more detail its decision to move.

"I think there has been a lot of a feeling of hurt, hurt feelings, and even a sense of betrayal," he said. "And it's like, when even Caterpillar resorts to spinmeisters and double talk, who can we rely on to tell us the truth?"

Caterpillar still employs more than 17,000 people in Illinois, including 12,000 in the Peoria area.

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Tim is the News Director at WCBU Peoria Public Radio.