‘Pillars’ of a Rebuild

Caterpillar moving HQ to Chicago area

Caterpillar’s saga continues with a headquarters relocation, the company announced Tuesday, as it plans to move its home base and current weight of burdens to the City of Big Shoulders. An exact site is yet undetermined.

While the construction company has incentives aplenty for relocating by the lake—drawing from a deeper talent pool, central location—its old home will weather the bulk of the economic storm. That place is Peoria, Illinois, and Caterpillar has been there since its beginnings in 1909.

After mid-December layoffs served as body blows to the midsize Illinois city, Caterpillar said Tuesday it would scrap plans to build new offices in Peoria and instead relocate its headquarters and 300 employees to the Chicago area, which adds a punch to the gut.

Becky Yerak of the Chicago Tribune offered comparative insight Tuesday:

“The announcement, made just weeks after Chief Executive Jim Umpleby took over for retired CEO Doug Oberhelman, is a psychological and economic blow to Peoria, whose history is as intertwined with Cat as Decatur’s was with ADM, Oak Brook with McDonald’s, Omaha, Neb., with Conagra Brands and Seattle with Boeing. All those companies tapped Chicago for headquarters.” 

According to Caterpillar, a “vast majority” of the 12,000 Peoria jobs, which include both manufacturing and executive positions, would remain. It is unclear how many of said jobs fall in each category, and where they will reside.

The decision of exact location within the Chicago area also still remains incomplete. The company may choose a location in Chicago proper, as recent transplants McDonald’s and Conagra have done. It could also opt for more affordable space in the sprawling Chicago industrial corridor stretching 50 miles northwest of the city near O’Hare International Airport. Caterpillar had 95,400 full-time employees at the end of 2016, down from 105,700 a year earlier, according to the company’s financial reports. The employment decline was mostly due to restructurings and lower production volume.

Caterpillar’s sales have fallen roughly 42 percent over the past four years.

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