Posted on 01/31/2017 7:40:49 AM PST by bigbob
Caterpillar Inc (CAT.N) said on Tuesday it would move its global headquarters to the Chicago area from Peoria, Illinois later this year to move closer to a global transportation hub and make it easier to recruit executives.
A limited number of senior executives and some relocated from Peoria will be based at the new headquarters, and about 300 will be based there once the facility is fully operational, the company said in a statement.
The company did not specify the exact location of its new headquarters.
(Excerpt) Read more at finance.yahoo.com ...
My former employer, Weyerhaeuser (forest products), did something like this. Was in the ‘burbs for 100 years. That’s where one could raise a family and afford to live near HQ.
Now, they moved to Seattle. “That’s where the talent is”, they said. These days “talent” are financial yuppie scum types. Not loggers and mill management that built the company.
Peoria is well served by I-74, I-155, and an airport with international services but these C-level execs are not flying coach, either. The corporate air fleet includes 3 Challenger 604 bizjets worth around $35 million apiece and about 10 pilots on staff. So don’t tell me this is so the CEO can get to O’Hare quicker. Sure it would be more convenient for the managers and staff members who travel frequenly in/out of Peoria but those aren’t the jobs that are moving.
It is true that Peoria is some distance from anywhere. This is why it’s called “Flyover Country”. It is also a “blue city” which is why the congressonal district was gerrymandered to include Peoria as part of Durbin’s strategy to get his former babysitter Cheri Bustos elected.
That makes me worry about the wisdom of their top executives.
Sounds like that level of mismanagement rates Cat as a ‘sell’.
“Let’s recruit top level execs that want to move to murder city”.
I do wonder if this was set in motion when Chicago native Hillary was front runner, and they didn’t react fast enough to the election to get the decision reversed.
If they are moving to Chicago it can only mean that they’ll be RECEIVING kickbacks.
Otherwise the move makes no sense. Leaving Illinois and Illinois taxes becomes the only logical move.
If I were a shareholder, I’d be having a kitten right now...
At the time, Chicago had an opera, and Dallas didn't, and one of the hen-pecked execs had a wife that liked the opera.
Of course, Dallas, being competitive, ended up with a nice opera house as a consolation prize. When it was too late.
Their stock buy-back program and the fact that Cat is still the darling on institutional investors (i.e. pension funds) probably contributes also.
It’s hard to argue with success but still...
BTW, are you any relation to Big Jake?
Are they moving to one of the outlying, less liberal counties around Chicago? Both the South and Midwest are heavily agricultural, but the Midwest is primarily focused on grain production, whereas Southern agriculture has cotton and peanuts as principal crops, with corn the main grain crop, focused largely on cattle feed. Rice and sugar cane have importance in Louisiana and coastal Texas. John Deere equipment services all these crops, but the focus on grain in the Corn Belt and the Wheat Belt make the company’s continuation in the Midwest important. Nothing wrong with, say, Fort Worth or San Antonio, and taxes are lower there, but John Deere has to go where the primary customer base is.
You’ve precisely defined what I meant by “modern employees”. My former employer had the same mindset, along with outsourcing every “non-core” activity to China, India, Mexico, Czech Republic, etc. All driven by the mantra of “quarter over quarter” earnings improvements, which to their credit they have done a very good job of delivering. They also figured out how to acquire companies and squeeze cost out of them, and put them into the “model”.
As a shareholder I’d be lying if I said I didn’t like the results. But I can’t help wondering if these are not short-term strategies that are not sustainable, and when they will run out of gas. Clearly they are not what put the company in business, allowed it to expand and grow, and to achieve a position where they could afford to abandon their past.
They’re already in Illinois. Otherwise, I suspect they wouldn’t have made this move.
Exactly. It’s one of the reasons Atlanta is home to so many Fortune 500 HQs and regional offices. For foreign companies, Porsche, Mercedes, and Siemens, Kia come to mind as having a big presence here, along with many others.
Alexander Botts is very sad.
The reason is their CEO wanted to be a CEO of a 47 billion dollar company in Chicago, not Peoria. In Chicago, you get invited to $10,000 a plate dinners. In Peoria, you get invited to a free chicken dinner at the VFW hall. (The food is WAAAAY better at the VFW hall.) This is about the ego of a CEO, period. Just like the ego of a corrupt mayor led to the closing of the airport closest to BOEING’S HQ once it moved.
He wants courtside seats to the Chicago Bulls, not the Bradley University Beaves. He wants a luxury loge at the Blackhawk’s game, not the Peoria Rivermen which doesn’t have luxury ANYTHING. He wants to see the Chicago Cubs the world champions, not the Peoria Chiefs, a single-A team.
He wants to go to the Chicago Art Institute where you can see works by Seurat, not the Peoria Wheels’O’Time museum where you can see a 1956 Chevy. He wants to be a 20 minute drive from O’Hate where you can fly to three continents, not a 40 minute drive to Central Illinois Regoinal Airport where you can fly to three cities.
This sucks for Peoria. But Peoria can only offer so much. And when you’re the CEO of a $47 billion company, you work where you want to.
Wonder if his board and/or the majority of his shareholders would agree?
Bradley University BRAVES. My apologies.
Institutional ownership currently at 66% That stat might explain a lot.
Only company that has the resources to armor plate its offices there.
I live in the area so I know what you’re saying, but my point is that hasn’t got much to do with why they’re moving C-level execs to Chicago. The CEO isn’t spending much windshield time driving to Rockford (or anywhere else). This is all about being able to corral the University of Chicago MBA types and others who would view Peoria as a 3rd-world village (even though it is actually a pretty decent small city with nice amenities and some very nice rural affordable housing).
By the way, you might find this of interest:
Driven initially the the CEO of Woodward Governor who decided to make a major investment in Rockford rather than elsewhere, but to challenge the city to live up to a higher standard.
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