Caterpillar Inc., the tractor and large-vehicle manufacturer, is considering moving up to 800 manufacturing jobs out of its Aurora-based facility. Caterpillar revealed in December 2016 that an unspecified number of layoffs at unnamed plants were coming, and the Peoria-based manufacturer’s Aurora facility might be on the chopping block. Caterpillar’s potential move comes after four years of declining revenue and lower projected profits for 2017.
“Should we move forward with the decision to relocate production, we will support the local leaders to mitigate the impact on our employees, their families and the community,” said the company’s resource industries group president, Denise Johnson.
If the move goes through, Caterpillar has proposed splitting the 800 manufacturing jobs between two locations, with production of large-wheel loaders and compactors going to its Decatur-based facility and production of medium-wheel loaders to its plant in Little Rock, Ark. Under this plan, the Aurora location would remain only for engineering and product support purposes.
Unfortunately Aurora job losses would be only the latest in what has become a dismal trend for CAT employees across the Prairie State. In 2016, Caterpillar layoffs and consolidation efforts in East Peoria and Mossville cost over 500 jobs.
However, Caterpillar is not reducing its workforce everywhere.
Manufacturers like Caterpillar often prefer to locate in states with Right-to-Work laws, which prevent workers from having to join or pay fees to a union, even if they work in unionized workplaces. Arkansas, where some of the Aurora jobs might be transferred, is among 26 Right-to-Work states. And so is Arizona, where Caterpillar plans to add 600 jobs over five years, according to the company’s May 2016 announcement.
In the wake of the November 2016 elections, it is likely that both Missouri and Kentucky will pass their own Right-to-Work laws, making every state bordering Illinois Right to Work. This will make the Land of Lincoln, which does not have Right to Work, even less competitive for manufacturing jobs, relative to its neighbors.
In addition to the lack of a Right-to-Work law, Illinois also has the highest property taxes in the country, the highest workers’ compensation costs in the Midwest and the fifth-highest state and local tax burden in the nation. As Caterpillar seeks to cut costs in the face of waning profits, Illinois is simply becoming too expensive.
Former Caterpillar CEO Doug Oberhelman warned in an op-ed in The State Journal-Register in February 2012 that if Illinois politicians didn’t implement reforms soon, the Land of Lincoln would see more jobs, especially in manufacturing, flee across state lines:
“Business leaders are making decisions today on where to invest in the future. Illinois must act now, with a bipartisan sense of urgency, to position itself for future job creation that is being discussed in boardrooms all across this country. I want Illinois to be in the hunt for those types of investments, including investments by Caterpillar. Illinois deserves it.”
Nearly five years later, state politicians still have not heeded Oberhelman’s warning, and it’s blue-collar workers who are paying the price.