North / South America
Caterpillar continues to move government
Jun, 25 2012
(Peoria, Illinois) -- Caterpillar Inc. CEO Doug Oberhelman hasn’t been afraid to speak his mind when it comes to Illinois government.
Since taking over the helm of the earthmoving multinational in 2010, Oberhelman has made headlines with his criticism of the state’s growing debt and its approach to business.
“The direction this state is headed in is not favorable to business, and I’d like to work with you to change that,” he told Gov. Pat Quinn in a March 2011 letter.
That correspondence prompted renewed fears of Caterpillar leaving Illinois to accept offers being made by other states for its headquarters. Oberhelman later referenced reaction to that letter in a speech before the U.S. Chamber of Commerce in Washington, D.C.
“The headlines were sensational. They said things like, ‘Cat leaving Illinois,’ which isn’t what the letter said. I actually said I’m looking forward to finding ways to invest more in Illinois,” Oberhelman told the Chamber members.
“Illinois is our home, but the facts remain: Legislators in Illinois have created an environment that is unfriendly to business and investment, and at Caterpillar, we want to help change that,” he said.
Oberhelman’s concerns about state finances seemed to soften in April, when he spoke to a group of construction professionals in East Peoria.
“I absolutely believe the clouds are clearing in Illinois. The state’s legislative leadership has stopped digging a hole, and there’s sunshine ahead,” Oberhelman said then. “I am more optimistic today than I have been in quite some time.”
That optimism hasn’t always been apparent in other Oberhelman statements. In an editorial published in newspapers across Illinois in February, he kept the focus on the need for change at the state level.
“When Caterpillar and most other companies look to locate a brand-new factory in the United States, Illinois is not in the running for such projects,” he wrote shortly before Caterpillar announced it would build a new plant in Athens, Ga.
“I wrote a letter to our political leaders expressing my hope that the state would undertake long-term reforms so Illinois could compete for jobs and long-term business investment. To date, we haven’t seen much change,” Oberhelman wrote in the editorial.
With the most-recent legislative session now over, Caterpillar again expressed concern that Illinois failed to take action on pension reform, company spokesman Jim Dugan said.
“We recognize that Illinois took steps toward budget reform and we appreciate those steps, but one of the most-needed steps was not taken — that is, some sort of agreement on pension reform,” he said. “We were hoping that action would be taken during this session. It didn’t happen. Illinois can’t keep kicking the can down the road or there will be serious consequences for the state.”
Oberhelman has advocated that Illinois adopt a “multiyear plan” to balance the budget and concedes that increasing the personal income tax by 2 percentage points in 2011 was “inevitable” given the state’s economic hole.
Though Quinn signed legislation in June 2011 that reduced worker’s compensation costs — expected to cut $500 million to $700 million from the $3 billion worker’s comp system — Oberhelman called for more reform in his February editorial. He again pointed to worker’s compensation costs as a factor in Caterpillar’s reluctance to build new plants in Illinois.
“We can’t do this in one day,” he said of economic reform needed to get the state out of the red.
In an address at Monmouth College in April, Oberhelman suggested the public get involved to force change.
“Have you gotten mad?” he asked the audience. “Have you screamed bloody murder about what’s going on in the state?
“Write a letter and tell someone you’re as mad as heck and you’re not going to take it any more,” he said.
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