In a blow to the prestige of the Illinois economy, Caterpillar said Tuesday it is moving its headquarters from Deerfield to Irving, Texas.
The maker of construction and mining equipment was founded in 1925 and called Peoria its home for decades until 2017, when it moved to Deerfield. The company said it will start transitioning its 230 headquarters employees to Texas this year.
“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,” Chairman and CEO Jim Umpleby said in a brief news announcement.
Caterpillar said Illinois will continue to have its largest concentration of employees. It has more than 107,000 employees worldwide.
The company said it has had operations in Texas since the 1960s.
Its announcement comes almost six weeks after another marquee name in Chicago-area business, Boeing, said it was moving its headquarters from Chicago to Arlington, Virginia, although it said many corporate workers would remain here.
Gov. J.B. Pritzker said he was disappointed by Caterpillar’s decision while addressing critics of the state’s business climate. Pritzker said the move involves 240 headquarters employees but Caterpillar put the number at 230.
“We will continue to support the 17,400 Illinoisans who work for the company in East Peoria, Mapleton, Mossville, Pontiac and Decatur — which remains Caterpillar’s largest manufacturing plant in North America after the company’s recent expansion,” Pritzker said in a statement issued by his office.
He said that despite the news, Illinois, with its largest population ever, is spawning more small businesses than other large states.
Caterpillar also lists offices or other Illinois operations in Peoria, Aurora, Morton and Edwards.
Texas is one of seven states with no individual income tax, according to the Washington, D.C.,-based Tax Foundation.
Irving is near Dallas. Its success at luring Caterpillar could be seen as payback for Chicago’s victory in 2001 when Boeing moved here after a tense, incentive-laden competition with Dallas-Fort Worth and Denver.
Caterpillar spokeswoman Kate Kenny said the company neither requested nor is getting state or local incentives in Texas. She did not respond when asked to elaborate on the reasons behind the move.
Kenny told Bloomberg News: “We believe being in the Dallas- Fort Worth market will give us the ability to attract new talent and provide additional career opportunities for our current employees to aid in retention.”
Texas Gov. Greg Abbott crowed on Twitter that Texas is a “perfect fit” for Caterpillar. In his office’s formal statement, Abbott talked about his state’s “world-class economic environment fueled by the lowest business operating costs in the nation” and said Texas now leads the nation as the home of 54 Fortune 500 corporate headquarters. Illinois counts 36.
Texas has scored other recent wins in business relocations, some at the expense of California’s Silicon Valley. Tesla and Oracle have moved to Austin while Hewlett Packard Enterprise moved to Spring, Texas, outside of Houston.
Mark Denzler, president and CEO of the Illinois Manufacturers’ Association, called the move a “huge loss for Illinois” but noted that the state remains crucial to Caterpillar’s operations. The company’s website lists 296 job openings around Illinois.
