by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Caterpillar, long based in Illinois, announced today it will be moving its headquarters to Texas. The manufacturer of construction and mining equipment said today in a press release that its offices in Irving, Texas (near Dallas), would now be the company’s headquarters instead of its current home in Deerfield, Ill., just outside Chicago.
“We believe it’s in the best strategic interest of the company to make this move, which supports Caterpillar’s strategy for profitable growth as we help our customers build a better, more sustainable world,” said chairman and CEO Jim Umpleby in a statement from the company today.
This news comes right after Boeing announced it would be moving its headquarters from downtown Chicago to Arlington, Va., just outside Washington, D.C., in May.
The Wall Street Journal notes that Tesla, Oracle, and Hewlett Packard have all moved their headquarters in the past two years as well, as companies take advantage of cheaper real estate and remote-work arrangements to cut costs.
Caterpillar’s move is especially notable for Illinois. Caterpillar is an institution in the state, with not only the Deerfield headquarters but also a massive facility in Peoria that includes a museum of the company’s 97-year history. The Journal notes that the move will only affect about 230 employees, and that Caterpillar will continue to employ around 17,000 people in Illinois.
But the message is clear: Even a company with deep historical ties to a state will eventually move elsewhere if that state become uncompetitive. And doing business in Illinois isn’t as easy as it is in Texas.
The Journal notes that Caterpillar did not receive any economic or tax incentives from Texas to encourage its move. (Republican governors should take note of that fact; it’s possible to get companies to move to your state by simply being a great place to do business without granting special favors.)