Manufacturer to shutter 2 Illinois plants, open $26M Indiana facility

Manufacturer to shutter 2 Illinois plants, open $26M Indiana facility

Accepting a deal that includes $6 million in subsidies, Wynright Corporation will expand its operations in Indiana and close plants in suburban Elk Grove and Oak Lawn.

A suburban manufacturer has announced plans to invest $26 million into a new facility in Hobart, Indiana, while shuttering its two Illinois plants.

Wynright Corporation, a subsidiary of Japan-based Daifuku, operates facilities in the villages of Oak Lawn and Elk Grove. Both facilities are set to close this fall after the storage equipment manufacturer accepted a deal from Indiana officials that included $6 million in state subsidies and a $100,000 training grant, according to Crain’s Chicago Business. The city of Hobart and Northern Indiana Public Service Company, the region’s gas supplier, are also providing economic incentives to the company.

A spokesperson for the Indiana Economic Development Corporation told Crain’s that the new Indiana plant will replace both of the manufacturer’s existing Illinois plants. The Indiana site is expected to create nearly 600 jobs within three years.

More affordable property taxes and lower workers’ compensation costs in Indiana have proven attractive to Illinois manufacturers, who are struggling in a far less competitive business climate.

While awarding subsidies to select businesses is not a sustainable formula for economic growth, the ease with which businesses can be poached from Illinois through special economic incentives should not be overlooked. In June, Atlantic Coca-Cola Bottling Co. announced that it would relocate its Rock Island facility to Walcott, Iowa, accepting a property tax rebate estimated between $450,000 and $500,000 and a sales tax rebate of more than $240,000.

Illinois’ own efforts to spur economic growth with special incentives have seen little success. Takeda Pharmaceuticals, one of the state’s top tax credit recipients, recently announced plans to close its 1,000-employee headquarters in Deerfield. And rail car manufacturer Nippon Sharyo is closing its doors in Rochelle, despite having received more than $10 million in state subsidies and tax credits.

The perceived benefits of such carveouts are often short-lived, temporarily concealing the pain induced by state’s unfriendly business climate for select, hand-picked winners. However, these failures haven’t convinced state officials. Illinois recently awarded $1.2 million in tax credits to Flex-N-Gate, an auto parts company, in exchange for the promise of nearly 300 jobs.

Wynright Corporation’s decision to shift operations across state lines underscores the need for a stronger business climate in Illinois.

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