"For 107 years, Peoria and Caterpillar have been synonymous. That just became a little less true."
Not good news for Peoria.
Not good news for Central Illinois.
Caterpillar is fleeing.
Read below.
Out for now.......
Matt
from the Peoria Journal-Star.......
Editorial: Caterpillar move means a somber day in Peoria
For 107 years, Peoria and Caterpillar have been synonymous.That just became a little less true.
On Tuesday, Caterpillar CEO Jim Umpleby announced the company he heads will not be constructing a new headquarters in Downtown Peoria following unprecedented sales and revenue declines that have changed management's focus to "growing the company again," with the conclusion investments would be better made "in new products, new services, new solutions."
Worse, Caterpillar is moving its headquarters to the Chicago area, with 100 senior executives and support staff - the CEO, the five group presidents, some vice presidents, major management functions such as human resources, finance and legal - relocating this year and 200 more to follow, a promised 300 total.
Umpleby insisted the two decisions were not linked. He cited proximity to a major international airport, primarily, but also a larger executive talent pool and the need for greater "speed and ... agility" in accessing distant markets - upwards of 60 percent of Cat's business is outside the United States - as factors driving the decision. In a competitive global economy where the only constant is change, "we want to be nimble and responsive to our customers."
It was a board decision, said Umpleby, "which I and the executive office fully support."
There was always an element of pinch us, it's too good to be true regarding the new headquarters facility, but departure was not something many central Illinoisans dared to contemplate, insecure about that possibility though many had long been. Rationally, we knew that if Boeing could leave Seattle, if Archer Daniels Midland could leave Decatur, if ConAgra could leave Omaha - all for Chicago - then Caterpillar could leave Peoria for same, or for some other state entirely.
We doubt that makes it any less shocking or disappointing for many locals - or confusing, frankly.
Umpleby, who took over as CEO on Jan. 1, said the board of directors had been deliberating the move "for some time," while declining to be more specific. Caterpillar will forgive central Illinoisans for whom that raises some questions.
Indeed, we trust the top brass wasn't mulling this over before Feb. 21, 2015 when with great fanfare the company announced its intentions to break ground on a new world headquarters. "Caterpillar will stay in Peoria. I repeat, we will stay in Peoria," then-CEO Doug Oberhelman said to much applause.
We trust that wasn't happening seven months later when Caterpillar announced that it was postponing its headquarter plans due to continued poor market conditions globally precipitating thousands of job cuts. "We remain committed to Peoria and to Illinois," Oberhelman assured all at the time. "They've always said when the economy is in the right position and the company is in the right position, they're starting the project. I think everyone should take them at their word," Peoria City Manager Patrick Urich reassured.
We trust that wasn't happening in November 2015, when Community Relations Director Henry Vicary got his turn: "Peoria has been our home for more than 90 years and has weathered business cycles in the past. We have emerged stronger after each one. We are in the right businesses. We are also in the right home. We remain committed to Peoria and to a prosperous future together."
Was it happening when Umpleby was named CEO in October 2016 with the reassurance that "he understands and respects the deep roots Caterpillar has in the Peoria area"?
Umpleby says from his soon-to-be-vacated seventh-floor office now that the context was different two years ago, with Cat coming off $55 billion in sales and revenues following a record 2012 - $66 billion. The outlook for this year is $37.5 billion, a decline of more than 40 percent. Meanwhile, "customers are becoming more demanding, there's new competitors that are coming at us every day. ... And so making the right kinds of decisions with our limited resources to allow us to grow we think is a critical decision."
Respectfully, we fail to see how making "the right kinds of decisions" is any more difficult from Peoria than it is from 150 miles north of here - those "right decisions" have been made here for most of the last century - but it would seem this decision is final.
Umpleby tries to cast that in the best light. While "officially, our headquarters will be in the new location," Peoria will always be considered Caterpillar's "hometown." Top executives, himself included, will be back and forth. Caterpillar is going to be leasing its new home, nowhere near replicating the physical presence it has here. The Fortune 100 company will continue to have more employees concentrated in this part of central Illinois - now about 12,000 - than any other place in the world. The charitable contributions will keep on coming.
And if Caterpillar does turn the corner, that should be "a positive thing for the city." Most vice presidents will remain here. Engineers at Mossville are not moving to Chicago. "We are not abandoning Peoria," said Umpleby.
"This is not easy ... but ... it's the right thing for Caterpillar to do in the long-term."
Ultimately, we cannot mask our concern for Peoria's future or sugarcoat our disappointment. Peoria has long been a company town, Caterpillar central to our identity as a roll-up-your-sleeves, get-it-done, move-some-earth town, but with a lot of brains behind that, too. Not just a physical and financial loss, this is an emotional and status hit, too. It's not replaceable - as an anchor, as a draw to other businesses and jobs, as the axis around which Peoria's economy spins, at least in the short-term.
Two years ago, we wrote of the now-and-again bumpy but mutually beneficial relationship that Peoria and Caterpillar had long, for the most part, enjoyed. We're not giving up on that, though we need to face the reality that decision-making is leaving Peoria while hoping this is not the beginning of a steady bleed. But we also must try to make the best of it, too.
If we wrote on Feb. 21, 2015 under the headline, "May Caterpillar long call Peoria home" that it "was an exceedingly good day in central Illinois," today, Feb. 1, 2017, the news can't be interpreted as anything but the opposite of that. We wish it weren't so, but let us remind ourselves that Peoria is a resilient town, and move forward with purpose.