Caterpillar CEO Threatens to Leave Illinois Over Recent Tax Hike

Back in 2009 before the Obama-Pelosi Stimulus Bill was passed, Caterpillar chief executive officer Doug Oberhelman contradicted President Obama and said his company was not planning on hiring anytime soon.

Now the Caterpillar CEO is threatening to move the company from Illinois over the recent tax hikes.
The Pantagraph reported:

The chairman and CEO of Peoria-based Caterpillar Inc. is raising the specter of moving the heavy equipment maker out of Illinois.

In a letter sent March 21 to Gov. Pat Quinn, Caterpillar chief executive officer Doug Oberhelman said officials in at least four other states have approached the company about relocating since Illinois raised its income tax in January.

“I want to stay here. But as the leader of this business, I have to do what’s right for Caterpillar when making decisions about where to invest,” Oberhelman wrote in the letter obtained Friday by the Lee Enterprises Springfield bureau. “The direction that this state is headed in is not favorable to business and I’d like to work with you to change that.”

Oberhelman said he’s being actively courted to move.

“I have been called, ‘cornered’ in meetings and ‘wined and dined’ — the heat is on,” Oberhelman wrote. “Before, I never really considered living anywhere else and certainly never considered the possibility of Caterpillar relocating. But I have to admit, the policymakers in Springfield seem to make it harder by the day.”

Cat spokesman Jim Dugan said the letter was designed to show Quinn that Oberhelman wants to be involved in finding solutions that benefit the company, which employs 23,000 people in Illinois.

It’s been a tough year for Caterpillar. First they found out that Obamacare would cost them $100 million in one quarter. Then earlier this year the liberal Illinois governor raised taxes on Illinois businesses including Caterpillar.

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  • ahem

    Leave Illinois, and screw it as it so richly deserves.

  • Stephan

    I drive past the empty cat plant here in OH almost everyday. I guess the union strike worked out real well for them. Not! The aZZholes had a 20th strike reunion a while back what a hoot.

  • Federalism at work. The states with good governance get all the business while corrupt, gangster states like Illinois get vacant lots.

  • LL

    WHY would anyone do business in Illinois if they could move to a right-to-work state?

  • Sounds like it beer summit time.

    Who’s buyin’ ?

    😉

  • arnonerik

    When will the people of Illinois realize that the Democrat gangsters they keep voting into office are sinking the State of Illinois as fast as a pair of cement boots would.

  • RS

    I urge Cat to leave Illinois, it’s doomed… but only to a right to work state.

    The home run of course would be to move completely out of the reach of Democrats and go off-shore.

    Shall we encourage that?

  • Come to Texas! We’re a proud Right-to-Work State, we fight tooth and toenail to keep our taxes low (no Income tax) and we LOVE heavy equipment!

  • Mrs. Galt

    Just did a friend’s IL tax return. Double taxation big time. Missouri’s tax rate is 6%, supposedly twice that of IL. But IL does not let you deduct anything, so you’re paying taxes on the same $ you paid fed and state taxes, not to mention medical costs, education, etc.

    IL is a joke. Go south, CAT.

  • Chisum

    Kenny, check out Jessie D defending the poor Palistinians who are being wrongfully accused by a false flag operation and the evil, parroting western media.

    http://gatewaypundit.rightnetwork.com/2011/03/scottish-christian-missionary-killed-in-palestinian-bomb-attack/#comment-293901

  • bama_rama

    Cat Financial is already in Nashville. Rumor has it Cat has been scouting out plant sites here and already has plans in place for at least two of the sites.

  • ironbill

    Stephen: I ride past what was once an abandoned GM plant in Ossining, NY (that at its peek employed 4,000) 3 days a week. Same feeling: What was; what could have been; what never was.

    How does one put to words the lie that liberalism/progressivism/socialism is. Empty factories, urban dysfunction, defaulted mortgages, a failed educational system…All the consequence of this horribly flawed ideology. Yet the Liberal argues that he is for the “Little Guy.”

    A corporation is a legal creation that exists solely to advance the interests of the owners (shareholders). if I owned Caterpillar stock, my interest would be in leaving Illinois

  • rbosque

    Just look at what liberals and Marxists are doing to this country! I’d move out of country, piss on them!

  • Annie

    We would welcome Cat into South Carolina with big, open, warm, Southern arms!! Smiling faces, beautiful places….SC Caterpillar….come on down!!!

  • bama_rama

    Annie:

    Rumor also has it that the rest of the south will have to outbid Alabama for whatever bits and pieces of Cat don’t end up in Middle Tennessee.

  • Betsy Ross

    Let me be clear:
    Change you can believe in.
    Mmmm…Mmmm…Mmmm…

  • Dave-O

    If I’m a shareholder of Caterpillar – I’m asking the Board of Directors at the next shareholder meeting WTF they are still doing in Illinois? How does this benefit the shareholders at all? They have a fiduciary duty to the shareholder and NOT to any particular locale.

  • ck

    Come to Utah, you can operate without a union. People here can read.

  • Espresso Logic – The 6th Sense

    It looks like Obunghole and the rest of the Libtards are gonna take another one in the shorts.

  • socialism can only survive if its has some capitalists to exploit. even howard dean recognizes that.

  • Sell the company to GE and they won’t pay ANY taxes…just ask Jeff Immelt.

  • jennifer

    Leave Illinois while you still have a company, Caterpillar. The Democratic controlled state will not be satisfied until they have bled you dry.

  • coolidgerules

    RS commented:
    I urge Cat to leave Illinois, it’s doomed… but only to a right to work state.

    The home run of course would be to move completely out of the reach of Democrats and go off-shore.

    Shall we encourage that?

    Absolutely not. Keep all the damn jobs in the USA. Go to a right to work state.

  • Todd

    Being from Peoria and that my uncle retired from CAT that will be a sad day if they leave Peoria. Peoria will be screwed since they were the largest employer at one time even have there headquarters building downtown. I do not live in the state anymore and many of my relatives have also moved out or passed away and are buried there. To this day I wonder how the farmers in Illinois are surviving.

  • Taxpayer

    Come to Colorado, Caterpillar! Low taxes and right to work.

  • Jim

    Cat has been moving out of Illinois in stages for a long time to right to work states and overseas. Peoria should have closed already; the union contract is not competitive. The only reason they haven’t closed is that it could disrupt some business units temporarily. Unfortunately, it looks like the CEO wants to stay in illinois and is looking for some sort of opt out for Cat.

  • Ipso Facto

    CAT leaving Illinois would be PERFECT!

    As we can all see, the liberals have no respect for the results of free and fair elections by the people. They have no respect for the legislative process which they have tried to circumvent and frustrate in WI for weeks now. They feel they are above the law. They next try to overturn laws by shopping cases to liberal activist judges.

    When are we going to wake up people? As long as we abide by the law and follow the democratic process, we will continually be at a disadvantage. We need to change our tactics and make this war asymmetrical so that as they plunder the democratic process, we plunder their bank accounts.

    We need to boycott the democratic utopias and let them all go down in flames. Let them all go out and demonstrate hysterically about UNION POWER. As they do that we should show them how the GREEN POWER gets up and goes elsewhere.

  • Pat the First

    Boeing moved their headquarters to Chicago after receiving preferential tax breaks. I wonder if they are regretting it now.

  • ogee

    Prolly regretting it. They get to hire marginal workers with a lifetime of Union costs added to their books for each worker. Boeing needs to go home to the PNW.

    Go to Utah Cat. They accept gold and silver coins as legal tender. Tough leaders for business run the state.

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  • choirboy626

    I live in Lake Wales and know who this guy is. He runs a barbershop that also sells handguns. Unreconstructed to the core.

  • southernsue

    i believe it is the design of the plan to overthrow our USA. if you make a ghost state, who rushes in to buy up the property? as all the property is bought up by, soros and obama’s gang, then they really can take over and then obama will be king of the USA.

    i know this sounds far fetched, however, the obama gang knows this and this is their intention or obama’s gang is the most inept administration ever.

  • squeaky

    [He’s given foreign automakers including BMW, Volkswagen AG, Toyota and Nissan an offer they can’t refuse: Unionize their workers or else he’ll single out one automaker and put the screws to them with a boycott…] meanwhile mr king took time out of his busy schedule [of strongarming and cake decorating – mostly strong arming] to join a demonstration against bank of america.
    http://finance.townhall.com/columnists/johnransom/2011/03/24/uaw_plans_suicide_bombing_of_economy/page/full/

  • squeaky

    “… know this sounds far fetched,..” not anymore in this new era of hope and change.

  • theBuckWheat

    People rail against the little “tax haven” countries, but as we see in this living example in the case of where CAT will be domesticated for purposes of taxation, tax competition provides a peaceful way for taxpayers to check runaway government.

    see the papers at:
    Coalition for Tax Competition
    http://www.freedomandprosperity.org/ctc/ctc.shtml

  • avery

    I Hope GA. let “CAT” know they would be welcome. GE pay no taxes, i don:t think GM pay any.

  • RedBeard

    Call me a cynic, but I have to wonder if Cat execs are looking for a GE-style tax vacation. As is always the case, let’s see what they actually do, rather than giving a lot of credibility to the sturm und drang.

  • squeaky

    first mistake was contradicting obama – whether knowingly or unknowingly. sometimes forgiven but sometimes avenged further down the road. like any good gangster movie.

  • cedarhill

    A letter is just a threat in an attempt to get concessions from the Democrats, ala GE. What the CEO has unwittingly stirred up may be a shareholder revolt if he doesn’t cut a deal. Money, after all, is money and the heavy equipment business has more competition now than ever.

    Several states, virtually all that surround IL, would be willing to tax them zip plus pay for part or all of relocation in order to get 23K of workers. I’d even build an international airport. We’re talking billions and billions in economic impact.

  • RedBeard

    Squeaky, up until 2 years ago, I would have told you that such a notion was just another nutty conspiracy theory. Now, with the gang of thugs we have running the White House, it’s not only possible, but likely.

  • squeaky

    red beard – being a cynic isn’t such a bad thing. that’s why obama wants us to shed it [per michelle]. sometimes that along with point on street smarts trumps all that book knowledge. and from the godfather….
    http://www.youtube.com/watch?v=8_-UJtZwjRI&feature=related

  • Jeff

    Wisconsin is open for business!!

  • Andreas K.

    Switzerland is alwasy considered to be a tax haven, Monaco too, if my memory serves me right. Then I look at our over-taxing and how the money is not enough. Hmmm… Okay, so we’ll get those handful of “evil rich” ™ people who shovel their money into those “tax havens” and…

    That’s not going to change a damn thing. Those few millions won’t be enough either.

  • Justme

    Southernsue: Its not far fetched at all. More and more I am thinking that Obama and the farleft (and their bleeding heart followers) want to see the economy and social structure collaspe so tht Obama can declare martial law and STAY in power. The things he is doing are so stupid and bad for this nation, it can be the only explanation. Allowing Brazil to drill in the Gulf really did it for me. And concerning Catapiller…I hope they move, lock, stock and barrel. Maybe then, the citizens of ILL. would stop voting in the mob. Doubt it, but who cares…let them go down the drain, they deserve it. Unfortunatley I am from the Socialst State of Maryland…voters in Baltimore keeping the tax loving libs in power. Planning to move to some point to a State with no income tax and one that repeals Obamacare. States need to start standing up to the Federal Government.

  • TammyChicago

    We are being screwed here in IL. I think CAT should leave. It would serve this
    pathetic state right. Most counties here are red. Chicago liberals and their
    agendas are what stink up my state. Chicago is the orifice of politics and you
    know what comes out of an orifice? Barrack Obama.

  • Scott

    Hey Caterpiller…Follow Boeing and BMW to South Carolina…We loves us some heavy industry!

  • waicool

    Please bring your business to Missouri. The Missouri electorate, our people, are striving to keep our political representatives business friendly, especially at the State level. We still have a union boss infrastructure to deal with and are currently pursuing right to work legislation to resolve the obstacles union corruption creates. Nontheless, Missouri workers, our good people doing the actual work, possess the strong work ethic with the skill-sets necessary to advance your business goals. Fundamentally, there are plenty of real estate options with ample infrastructure to satisfy your company’s physical plant needs. We enjoy our neighbors to the East but we understand the toxicity a misdirected state populace are capable of allowing for USA businesses such as yours. In Missouri, you will find yourself immersed in a community of good people with common goals recreating a nurturing environment for all USA businesses. Your business is valuable to us in Missouri. I trust you will consider Missouri as your new home.

    BTW, we are pretty sure Claire McCaskill and the Carnahans will soon be gone from the political landscape, evidence we are strong Americans working on keeping our USA the land of liberty and freedom it was founded to be.

  • Hilarious

    Wow. The vitriolic comments made here make me wonder if any of these respondents are even employed. Or have an education. You’re at a minimum playing useful idiots to the puppet master oligarchs. But you’ll continue to blame your fellow lower middle class compatriots for all of our country’s ills. Priceless.

  • Scott

    #48

    Retired military pilot and current business owner…I’ve been around enough to know that our current socialist government is a destroyer of business, wealth production and ultimately the standard of living of all Americans. You mentioned eduction so you must feel that your have some semblence of education or knowledge. May I ask what about the collapse of the Soviet Union don’t you understand? What about the poverty of Cuba and North Korea? What about capitalism that China has embraced? Did you miss or not understand the opening up of Eastern Europe after 50 years behind an iron curtain of misery? Run along now with your talking points…The adults here are having a conversation.

  • Ladue Pundit

    Hey Hillarious-

    How long can a business employ people when it loses profit? The more profits the government at all levels confiscates, the less money is left.

    As a tax preparer, I can tell you that Illinois is by far worse than any surrounding state–for businesses or individuals. I haven’t seen any vitriol here, just citizens tired of being bled by governments.

    If you enjoy playing the ‘useful idiot’ and having your wages confiscated, shut up and stay in IL.

  • Major Kong

    Getting the hell out of Illinois is on my mind everyday. As the state continues to lose businesses due to relocation to business-friendly states, the little ole property tax payer will be required to pick up the tabs for bloated, inefficient bureaucracies, increasing demands for “entitlements”, and sub-par school districts. This will, of course, only make it more difficult to sell a house. Progressives have driven this state off a precipice.

  • Oldpuppymax

    The question is…will he be PERMITTED to leave? Don’t put it past the left to create some sort of law to make the moving of a corporation which employs X number a CRIME!!!!!

  • Madkangaroo

    #48

    “Wow. The vitriolic comments made here…”

    You apparently don’t know what “vitriolic” means. If you want vitriolic spend some time perusing left wing web sites or media. For example, one lefty TV host recently called Palin a “stupid tw*t” while fabricating “quotes” she supposedly made. That’s vitriolic and common on the left. They specialize in racism, misogyny, obscenity etc., etc. Just search on “Palin”, “Bush” or something similar for examples.

    “…make me wonder if any of these respondents are even employed. Or have an education.”

    Former railroad brakeman and union member. Former business owner (didn’t like the pay to hours ratio and effects on family life). Worked on environmental modeling at Los Alamos National Lab (EES-5 unit) while a grad student. Now holding a Master’s degree and currently an IT specialist working in natural resource management. My individual income is above the national average for entire families. You haven’t a clue about our backgrounds.

    “…blame your fellow lower middle class compatriots…”

    No, we want to liberate them from the mind-shackles they’ve been inprisoned with. In the meantime, we must prevent them from destroying liberty and prosperity.

    “…You’re at a minimum playing useful idiots to the puppet master oligarchs.”

    No, the puppet master oligarches are the “progressives” running the Democrat party and their enablers like Soros, the [corrupt] unions, and the media. It’s the rank and file left that are the puppets, mindlessly spewing todays lies and propaganda, and voting for the latest false messiah, all in an attempt to impose a morally, intellectually, and empirically failed system, i.e., Socialism, on the U.S.

    Now, this is has been the one bit of troll feeding I’ll give you. You’ve written ad hominems and non sequiturs. Unless you have something substantive to offer please run along, otherwise you simply confirm our worst opinions of the left.

  • Ghostsouls

    Why should caterpillar care, they just got away with paying ZERO taxes on the billions of dollars they earned. How can you get lower than ZERO???? This is from another story where Charlie Rangel helped companies avo8id paying their fair share “Rangel was presumably not joking, however, when he changed his position on the issue, known as “active financing,” the same day. The chairman’s reversal allowed GE and other companies, including Caterpillar(CAT), JPMorgan Chase (JPM), Ford(F) and IBM(IBM) to save an estimated $4 billion annually in taxes.”. So they all saved $4 billion dollars and caterpillar is going to cry foul? So, Caterpillar gets away with not paying federal tax dollars, now they want to not pay State tax dollars, when all the states, including Illinois, are having economic problems. Remember people, if Caterpillar does not pay their fair share, YOU will have to pay their share. With all they saved in federal tax dollars they can afford to pay a bit more in state, where the hell is oabam with his spread the wealth crap???

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  • Peggy

    In my opinion this amounts to a threat only with the aim of getting the state to come to bargaining table in order to keep Caterpillar right where it is.

    It would cost more to move the company that it would to negotiate for tax breaks. I am willing to bet that IL will be willing to come up with some kind of generous package. I very much doubt that Caterpillar will be going anywhere

    But the point of the story is still important. With the taxes as is, Caterpillar will not be able to remain in IL. The pertinent question is, if Caterpillar can’t stay without some tax breaks, what about all those smaller businesses with less clout? What will they do?

    This distress call from Caterpillar is a symptom of a much worse disease. How much will the tax hikes devastate IL businesses across the board?

  • Hey_Ange

    When I graduated HS in the ’70s there were 2 Pullman Standard plants, Thrall Car, US Railway, North American Car, 2 GM Electo-Motive plants, Fisher Body, US Steel South Works, Republic Steel etc. Now in Illinois the only thing left is Caterpillar and 2 Ford plants. Even Maytag and Fedders are gone. Keep up the good work Quinn, Madigan, and Cullerton, you may attain your dream of only the liberal elite and a “diverse” horde of freeloaders residing in this state.

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  • jimstl

    Come to Missouri!

  • averagemelon

    Hey Ghostsouls,

    If CAT pays nothing at all in taxes, then why would Illinois care if it left?

  • anthony doran

    i work at CAT in aurora IL in building K witch just that building alone suplys jobs to 2000 people. all of the other buildings “all 14 of them” suply jobs to 11000 people. i cant aford to loose this job. i work my a** off to get the job done. me an my co workers have familys to take care of an would not be able to take care of our familys if illinois cat closed. i was born in texas an it aint that great.

  • Dan s

    All of you are forgetting one thing the new uaw contract that froze all wages for employees Also has a no plant closings clause in it through 2016.not that I blame other states for wanting the 23000 jobs but most of the jobs are skilled trades jobs that need highly experienced work force,something that unfortunately are lacking in most southern states

  • autumm

    I find it a little ironic that in the Decatur paper CAT posted record profits last year but they can’t aford to pay extra taxes? How much money do the CEOs of these company’s really nef to be paid yo love a comfortable lifestyle? CAT like so many other large corporations are stripping their employees of good pay, benefits and even outsourcing the work to G&D to save a dollar. They’re currently sending work to Arkansas they can escape from the union. It’s not that they can’t afford to stay its just that the corporation is greedy.

  • Harleypyrate02

    MOVE CAT TO TEXAS! I need a job!
    P.S,could you please hire some of us white workers for 10.00 an hour and leave out the hispanic immigrants for 8.00hr?

  • muffler

    I wonder if everyone realizes that the reason the taxes in Arkansas and Texas are lower is because they are negative federal tax states. That means they actually get more money then they pay to the Fed. While Illinois is a positive federal tax state. The give more in revenue then the fed returns. So let’s start talking about nanny state in the true light. Maybe we should end subsidizing Texas and Arkansas so that states like Illinois – that have been paying the bills – can keep their jobs.

  • bill

    Yeah, Cat, move out of Illinois and kill the jobs of all your workers there. It’s okay, they belong to a union, which means they’re not Real Americans.

  • Mattman

    Response to #62. Cat employees pay taxes. Take away several thousand employees paying state and sales tax and it puts a damper on things. Simple economics, something people or lawmakers in Illinois don’t understand.

    Jimmy Johns has already left, CAT next, then Boeing, etc… slipperly slope when you raise taxes. Same thing will happen when it is done at the federal level. People and businesses will leave the country.

  • Uneducated tycoon

    First things first: Cat CEO presented his problem to Cats governor. The ball is in governors court.

    If the governor and government of Illinois gamble that the expense of Cat moving away is greater to Cat than the 10-year tax advantage to Cat of moving away, then they will treat this letter from Cat CEO as a weak gambit and keep taxes high. If the governor and government of Illinois realize that the huge expense of moving a heavy industrial concern away is to be preferred over paying taxes, the government will undertake to work with Cat to adjust the tax structure just enough to keep CAT in Peoria. There are no fools in this negotiation. It is entirely likely that the government of Illinois will adjust the tax structure just enough to keep CAT in Illinois.

  • Erin

    LOL. The $40 million the CEO of Cat was crying about to Pat Quinn is what the 32,000 EMPLOYEES will be paying for THEIR state tax hike, not Cat itself. Under the previous 4.8% state corporate tax, Cat should have paid $180 million – but they only paid $44 million. Add that in with the TWO HUNDRED MILLION “REFUND” from the federal taxes – and that’s a fat $156,000,000 WELFARE CHECK from where I am sitting….

    You would think that “conservatives” who claim to be so versed on taxes wouldn’t be so willfully ignorant about how they roll. Cat explains what REDISTRIBUTION OF WEALTH really looks like on their own website:

    “We have recorded income tax expense at U.S. tax rates on all profits, except for undistributed profits of non-U.S. subsidiaries of approximately $11 billion which are considered indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested profits is not feasible.”

    In laymen’s terms? Corporations can “defer” taxes they’re supposed to pay by reinvesting them instead. And it would work wonderfully if they were required to invest in the American economy, but they’re not. They’re actually encouraged (with additional tax breaks) to invest them in other countries or in mail boxes on the Cayman Islands. Caterpillar’s Cayman PO Box is 2126…

    To add insult to injury, states luring Caterpillar to their states are doing so with Illinois taxpayers’ money. The handful of “blue states” subsidizes the freeloading red states with $19 billion a year in federal tax dollars. The local kindergarten teacher’s “gold digger” salary is not why Illinois is broke.

  • Erin

    “Jimmy Johns has already left”

    Again – LOL. Jimmy’s grandstanding was poltially motivated beyond reproach. Weston Presidio has 30% stake in Jimmy John’s. And they donated $22K to the RNC, $25K to the Republican Governor Assoc and another $15K to the Massachusetts Republican Society. And that’s not all – Jimmy himself funnels profits from Jimmy John’s to fund his politics without the knowldge of his franchise owners. Imagine owning a Jimmy John’s in Minneapolis. and there are protestors outside your store because Jimmy gave $10K to fund the anti-immigrant “fun” going on in AZ. The poor franchise owner had to give out free sandwiches to the protestors and sign an affadavidt that he has no idea Liataud was using his business for political reasons.

    If Jimmy goes to Florida – the TRUE CAPITALIST approach is to tell him he can take his 200 plus Jimmy John’s in Illinois with him. I may seem cruel to the franchises, but why should we send 10% of every Jimmy John’s in Illinois to an ungrateful GOP hack in Florida?