馃攳
Boeing, Caterpillar and Citadel Are Leaving Illinois. Here鈥檚 What It Means for the State. | WSJ - YouTube
Channel: unknown
[1]
- [Narrator] Illinois is home
[2]
to over 35 Fortune 500 companies,
[5]
scattered across Chicago, its suburbs,
[7]
as well as other parts of the state
[9]
but in recent months,
[10]
three major corporations
have announced their exits.
[13]
- The Chicago area losing
another corporate headquarters.
[16]
Caterpillar is moving to Texas.
[18]
- Boeing is expected
[19]
to move its corporate
headquarters to Virginia.
[22]
Billionaire Ken Griffin
[23]
is relocating his hedge
fund firm headquarters
[25]
from Chicago to Miami.
[27]
- So any time that major names
depart a metropolitan area,
[32]
it's a blow to sort of that
metropolitan area's ego.
[36]
- [Narrator] So what does the exit
[37]
of several major employers
mean for the state
[39]
and how does it connect to
broader economic trends?
[42]
- You hear companies
all across country talk
[45]
about the business committee,
[47]
saying oh, we may leave, we might do it.
[49]
Well, it's happening here.
[50]
Those are big announcements.
[51]
- [Narrator] Tom Stringer specializes
[52]
in site selection at the
accounting network BDO.
[56]
- So Chicago would be wise to listen,
[58]
try and understand the why
[59]
and then try to solve those issues.
[61]
- [Narrator] That why is different
[63]
according to each company.
[64]
Citadel's CEO said he views Florida
[67]
as a better corporate environment
[68]
and has previously complained
about Chicago's crime.
[71]
Caterpillar said the move
supports its strategy
[73]
for profitable growth,
[75]
and said it wasn't getting any economic
[77]
or tax incentives related to the move.
[79]
Caterpillar has steadily invested
[80]
in right-to-work states like
Texas over the last decade.
[83]
And Boeing's announcement
was a long time coming,
[86]
according to analysts like Stringer.
[87]
- When the Boeing decision
to come from Seattle
[89]
to Chicago took place to
really a lot of fanfare
[93]
but it was kind of strange at the time
[95]
that Boeing didn't pick Washington then
[96]
given the level of
defense work that they do
[98]
and the regulatory
environment, FAA relationships.
[102]
- [Narrator] Lawmakers and unions
[103]
have previously criticized Boeing
[104]
for the remoteness of its Chicago base
[106]
from its jetliner operations
in the Seattle area.
[110]
In a statement, Boeing said,
[111]
"Northern Virginia makes strategic sense
[113]
for our headquarters with the proximity
[115]
to our global customers and stakeholders,
[117]
as well as world-class
engineering and technical talent."
[121]
The move brings Boeing closer
[122]
to its largest customer, the Pentagon,
[124]
as well as to lawmakers and regulators.
[127]
Boeing said its CEO and CFO will move
[129]
but the majority of its 1,000 employees
[131]
will remain in Illinois.
[133]
Meanwhile, Caterpillar
announced roughly 230
[136]
of its corporate roles will move
[138]
to the new Texas headquarters
[139]
with around 17,000 jobs
remaining in Illinois.
[143]
- If those headquarters' jobs are small
[145]
but highly compensated
making a lot of decisions,
[147]
having a lot of those folks come in,
[149]
using a lot of corporate
services, active in the community,
[153]
even though it might be
a limited number of jobs,
[155]
that defection hurts significantly.
[158]
- [Narrator] The moves
are seen as a setback
[159]
for Chicago and Illinois leaders' efforts
[161]
to bring more companies to the area.
[163]
In late June, the Chicago Mayor's Office
[165]
said Citadel's exit was disappointing.
[168]
The office added that
Chicago's economic outlook
[170]
has never been stronger,
[171]
and cited more than 35
new company relocations
[174]
and 58 expansions made this year.
[177]
The Illinois Governor's
Office did not respond
[179]
to a request for comment
on the companies exiting.
[181]
In a previous statement,
Governor J. B. Pritzker
[183]
said the state continues to be a leader
[185]
in attracting companies.
[187]
- So having corporations
headquartered in your area
[190]
is both important from a jobs perspective
[193]
but also a sort of prestige standpoint.
[196]
- [Narrator] And a company's relocation
[197]
could have ripple effects
[198]
throughout the local economy.
[199]
- Whether that's the
turkey sandwich for lunch,
[201]
the dry cleaning that's pumping money
[203]
into their local economy
back in the Chicago suburbs
[207]
or if you live in an apartment downtown.
[209]
So those little economic
catalysts will be gone
[212]
and that will hurt.
[213]
- [Narrator] According to a recent report,
[215]
approximately 4.4 jobs are created
[217]
in the local non-tradable sector
[219]
for every job created in
a local high-tax sector.
[222]
Some non-tradable jobs are lawyers,
[224]
dentists and retail clerks.
[226]
And in the post-pandemic economy,
[228]
some analysts say workers are
still in the driver's seat.
[230]
- People are definitely out
in front taking the lead,
[232]
making lifestyle decisions
[234]
and companies are playing catch-up.
[235]
- [Narrator] Workers are
moving from the coast
[237]
to the middle of the country and Florida
[239]
and by many measures, red states.
[241]
Those that lean Republican
[242]
have recovered faster economically
[244]
than Democratic leaning blue ones.
[246]
- Following the national trends,
[247]
there's just so much more growth
[249]
in the South and Southwest
[250]
and that's where some of
these companies have moved.
[253]
- This movement has implications.
[255]
Illinois is one of seven states
[257]
that lost a congressional seat
following the 2020 census,
[260]
while Texas and Florida,
[262]
the new sites of Caterpillar and Citadel,
[264]
are two of six states that
gained at least one seat.
[267]
- The loss of a congressional seat
[268]
is partly, in Illinois's case,
[272]
it is because of the true sort of loss
[274]
of population, although it was very close
[276]
to sort of zero growth.
[278]
But more importantly,
it's just not growing
[280]
as fast as other areas.
[283]
- [Narrator] One area in particular
[284]
is picking up Midwestern
workers and employers.
[287]
- The Dallas, Fort Worth region in Texas
[289]
in particular is where a lot
of those folks are coming.
[292]
DFW, similar to the Chicago
for a lot of business reasons
[296]
in terms of office environment,
[297]
diverse corporate services, ease of travel
[300]
back and forth across the country.
[302]
So Dallas has always been Chicago's kind
[304]
of shadow competitor.
[305]
- Florida is similarly
benefiting from relocations
[308]
as it's beginning to see an effect
[309]
on its economies and finances.
[311]
Florida is on track to register
a record budget surplus
[315]
for the fiscal year that ended June 30th,
[317]
which it attributes in
part to new residents.
[319]
Both Florida and Texas do not
have individual income taxes.
[323]
Illinois, however, has a flat
income tax rate of nearly 5%.
[326]
Those taxes account for around half
[328]
of the state's total revenue.
[330]
The Illinois Chamber of
Commerce has advocated
[333]
for streamlining regulations
[334]
and reducing taxes in the state.
[337]
Chicago is still attracting companies
[339]
with its roots as an
economic hub for the Midwest,
[341]
along with its international airport.
[343]
So even as several
companies exit Illinois,
[346]
other corporations like
Kellogg's snack division
[348]
are expecting to move in.
[350]
And Google says it plans
[351]
to purchase a new office in the area,
[353]
Chicago's famed Thompson Center.
[355]
- If it wasn't evident before,
[356]
then surely it is crystal clear now.
[359]
Google is one of Chicago's
most important companies.
[363]
- Tech firms had really been starting
[365]
to bulk up and grow in the Chicago area
[368]
before the pandemic
[369]
but that, of course, was
very much slowed down
[372]
by the pandemic.
[372]
So this will be an interesting new wrinkle
[375]
in downtown Chicago to keep an eye on.
[378]
- [Narrator] As companies
try to attract new hires,
[380]
some states are also working
to recruit companies.
[383]
- Certain states are
extraordinarily proactive
[385]
and cities are extraordinarily proactive
[387]
in recruiting based on
things like quality of life,
[390]
incentives, workforce, showing
[393]
and touting the benefits
of certain community.
[396]
That's because it increases
quite frankly tax flow
[399]
to a community.
[400]
It's a return on investment.
[401]
You'll bring customers in if you will.
[403]
- [Narrator] For example,
Virginia Senator Mark Warner
[405]
said he had been lobbying
Boeing senior leadership
[407]
for over a year to move its
headquarters to his state.
[410]
- I see the cities that are really winning
[412]
are those that in the hunt, in the game
[414]
and are out knocking on doors going
[416]
to meet with companies.
[417]
Those might not have immediate results
[418]
but two, three, four years down the line,
[421]
when a CEO changes over
[423]
or the key decision makers change over,
[425]
that's remembered, and that's often
[427]
when it becomes successful.
[428]
(lively music)
Most Recent Videos:
You can go back to the homepage right here: Homepage