Caterpillar will move its global headquarters from Illinois to Texas

Less than six weeks after defense contractor and aircraft maker Boeing announced it would move its global headquarters from downtown Chicago, leaders of another major company are set to leave the region.

The company said Tuesday that longtime Illinois-based Caterpillar Inc. will move its headquarters from Deerfield to an existing office in Irving, Texas, outside of Dallas.

“We believe it is in the company’s best strategic interest to make this move, which supports Caterpillar’s strategy for profitable growth as we help our customers build a better, more sustainable world,” Jim Umpelby, Caterpillar Chairman and CEO, said in a statement.

Caterpillar spokeswoman Kate Kenny said the move means the majority of the 230 employees in the mining and construction company’s Deerfield office are expected to relocate to Texas over time.

The transition will start this year. Kenny did not provide a specific time frame for the move, but said the company has a lease for the Deerfield office that will allow for an orderly and flexible transition of our employees, and company leaders will work with employees individually.

Caterpillar has offices and manufacturing sites across Illinois, including one in Chicago, and Kenny said the move won’t affect any other locations in the Chicago area. Illinois is expected to remain the largest concentration of Caterpillar employees in the world, with more than 17,000 employees in the state, most of them near Peoria.

“The global competitive and market environments we face as a company are always changing, and we are constantly evaluating and updating our global footprint, including office locations, to best serve our business needs and talent,” Kenny said in an email.

The company is the latest to reduce its presence in the Chicago area amid corporate relocations and an office market reeling from the COVID-19 pandemic.

Boeing Moved its headquarters to Arlington, Virginia, and said it would cut office space but would continue to employ hundreds of people in Chicago. Earlier, in 2018, Takeda Pharmaceutical Corporation announced that Deerfield headquarters will be closed.

Recently, other companies sold office space as many employees worked remotely during the pandemic. Insurance giant Allstate reached an agreement in late 2021 to Selling its old headquarters near NorthbrookAnd recently, health care company Baxter said it was Deerfield headquarters sold long ago To adapt to the hybrid business model, though, it will “remain in the general area” and remain accessible to employees working at Deerfield.

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“That’s kind of how it’s going right now,” Deerfield Mayor Daniel Shapiro said. “As we come out of the coronavirus pandemic, desk demand is not what it was three years ago. People don’t go to offices as frequently, so that’s kind of what the market is doing.”

He noted the greater economic forces of the Caterpillar move, along with recent departures such as those announced by Baxter.

With that said, some of Deerfield’s recent losses have been Chicago’s gains. In 2019, Mondelez said she would Moving its headquarters from Deerfield to Chicagoand the Walgreens Boots Alliance at its Deerfield headquarters, but the company announced plans in 2018 to Many employees moved to the city.

Shapiro said the caterpillar’s departure will be phased out over two years, allowing time to find new tenants for the 100,000-square-foot space.

The company has long been headquartered in Illinois, and in 2017 it announced Headquartered to Deerfield from Peoria. The company has acquired the former head office of liquor producer Beam Suntory, which has moved to downtown Chicago. In 2021, Beam Suntory announced plans to establish a global headquarters in New York City, but it will retain some business units and corporate positions in Chicago.

At the time, Umpleby cited Deerfield’s proximity to O’Hare International Airport and accessibility to Chicago.

“After a thorough site selection process, we chose this location because it is approximately 20 minutes’ drive from O’Hare Airport and convenient to the city of Chicago via a commuter train, fulfilling our goal of being accessible to our global customers, merchants, and employees,” he said at the time. “This location gives our employees many options for living in an urban or suburban environment.

“We know we have to compete for the best talent to grow our company, and this position will appeal to our diverse global team today and into the future.”

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The Tribune reported at the time that Caterpillar received no incentives from Deerfield Village or the state when it moved.

The caterpillar’s now move to Irving, Texas, doesn’t surprise John Boyd, director of The Boyd Co. , a national site selection company.

“The Dallas Metroplex has really emerged as a major corporate headquarters location, and Caterpillar has had a significant presence in Texas for many years, both in manufacturing and office operations,” he said.

Boyd added that the Lone Star State’s lack of income taxes on individuals and corporations is the big draw, especially for senior corporate executives.

Caterpillar signaled greater interest in the Dallas area last year, when it announced the creation of an electric power division in the suburban Las Colinas neighborhood of Irving, bringing in executives and other employees from several offices across the country.

The lifestyle offered by these upscale areas also attracts Fortune 500 companies such as Caterpillar.

“Las Colinas is now a very prestigious address, a place where a lot of celebrities live, and there are also a lot of closed communities that C-suite executives find attractive,” Boyd said.

According to the company, about 12,000 of the 17,000-plus Caterpillar employees are located in Illinois around Peoria. But Greater Peoria Economic Development Board chief executive Chris City said he was not worried about the caterpillar switching to a Sunbilt.

The manufacturer remained an economic force in the region, beginning to build tractors in 1910, after several hundred headquarters employees headed north to Deerfield, and he expects the latter move won’t halt local growth either.

“Caterpillar’s commitment to our region remains strong,” he said. “They have over 12,000 employees here, making Peoria the largest Caterpillar employment center in the world.”

The company maintains a research and development campus near Peoria, as well as a foundry and logistics center, among many other facilities. This spring is often announced on the radio, looking for workers to fill vacancies.

“They call it ‘Walk Every Wednesday,’ and they only ask people to come with their resumes on Wednesdays, and if you qualify, you’ll be hired immediately,” Siti said.

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However, Governor JB Pritzker called Caterpillar’s move “disappointing,” and said the state was adding new small businesses and large and medium-sized businesses.

“It is disappointing to see Caterpillar relocate its 240 employees from Deerfield over the next several years when so many companies come in,” he said in a statement.

The Illinois Republican Party has criticized Pritzker, who faces re-election later this year, for the impending Caterpillar move.

“Another week, another prominent American company is moving its headquarters out of Illinois under the leadership of Governor J.B. Pritzker,” Chairman Don Tracy said in a statement. “Just like the hundreds of thousands of individuals and families who have fled Illinois in recent years, Caterpillar is joining with Boeing to leave us for other states with lower taxes, more growth opportunities, and fewer crime.”

While the move is a loss, the company continues to hire thousands of people in the state, said Mark Denzler, president and CEO of the Illinois Manufacturers Association.

“The decision to move the company’s headquarters out of state is a loss for Illinois, which has proudly been home to the iconic construction equipment manufacturer for nearly a century,” he said in a statement. “While 240 employees at the company’s headquarters in Deerfield will relocate out of state, the company will continue to be a significant part of our state’s manufacturing sector.”

Even as politicians and the state Manufacturers Association lament the Caterpillar headquarters move, Boyd, of the national site selection firm, expects corporate relocations to become more common. The recent shift in office work, he said, made the path easier.

In the past, companies knew that out-of-state moves involved the loss of some valuable employees due to family or community ties. But the advent of remote technology, and the ability to work just about anywhere, means that key employees can choose to stay put, perhaps setting up home offices.

“Usually, companies have been reluctant to move their headquarters,” he said. “But today we are witnessing a wave of deportations.”

Dan Petrella contributed to this report.

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