Steel manufacturer shutters Illinois plant, takes 100 jobs to Indiana

Steel manufacturer shutters Illinois plant, takes 100 jobs to Indiana

Alliance Steel Corp. will move 100 jobs to Gary, Indiana, with plans to add 30 more.

Illinois-based Alliance Steel Corp. will shutter its Bedford Park facility and relocate just 25 miles across the state border to Gary, Indiana. Alliance Steel currently employs 100 workers, and is aiming to add 30 more employees by 2023, according to the Indianapolis Star.

The company announced Dec. 5 that it would leave Illinois and invest $19.7 million in the new Gary facility. Renovations on the Gary site will begin in 2019, with the possibility of being operational as early as January 2020.

Alliance Steel has anticipated the move since 2017, when the company submitted a nearly $1 million bid to the Redevelopment Commission in Gary for 25 acres of land.

Alliance Steel CEO Andy Gross told the Associated Press that the Hoosier State is “making all the right moves to recreate a very promising industrial area.”

Lower property taxes and more affordable workers’ compensation costs in Indiana have proven attractive to Illinois manufacturers struggling in a far less welcoming business climate. A 2018 study by the state of Oregon compared workers’ comp premium rates across industries, ranking Indiana’s as second-lowest in the nation. Illinois’ rates, meanwhile, are higher than nearly all of its neighboring states, surpassed by only Wisconsin, the study found.

Hoist Liftruck, an industrial forklift manufacturer that operated near Alliance Steel in Bedford Park, preceded the steel distributor when it moved to Indiana in 2016, taking with it 300 jobs. Hoist President and CEO Marty Flaska said the company would not have even considered leaving Illinois if not for its high workers’ compensation costs and property taxes.

Another manufacturer, Seal-Rite Door Inc., recently announced plans to shutter its Rockford facility and expand operations in Beloit, Wisconsin.

Alliance Steel and Seal-Rite Door are only the latest to cross state lines to reach a lower tax burden and stronger business climate. Wynright Corporation announced in September, for example, that it will shutter both of its Illinois facilities and relocate to Indiana.

This is not a new trend: In 2016 alone, Colbert Packaging CorporationVonco Products LLCPrestige Metal Products Inc. and Haribo all either moved to or expanded operations in Wisconsin. Enjoy Life Foods moved to Indiana that year.

Businesses in Illinois also face an excessive amount of regulations and pay a high price in complying with them. Illinois’ Administrative Code is a massive document that would take a person nearly 21 weeks to read – if he or she were reading 40 hours a week at 300 words per minute, according to a 2017 study by the Mercatus Center.

The high cost of doing business in Illinois, excessive regulations and the ever-present threat of more tax hikes as the state struggles with $7.3 billion in unpaid bills and up to up to $250 billion in pension debt will keep new businesses from settling in Illinois until reforms are made.

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