- Associated Press - Tuesday, January 31, 2017

January 31, 2017

(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, 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. Itâ€s not replaceable - as an anchor, as a draw to other businesses and jobs, as the axis around which Peoriaâ€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, Jan. 31, 2017, the news can 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.

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January 25, 2017

(Peoria) Journal Star

Reforms, reductions and revenue: Reachin’ for a real budget

Among the first things that jumped out about the governor’s state of the state address is that he is still dropping - make that droppin’ - his “g.”

Let us hope that the Legislature soon drops a budget on his desk, which has been missing - make that missin’ - since Bruce Rauner entered office two years ago, far and away the most egregious and enduring example of fiscal irresponsibility in the nation.

Oh, we’re just joshin’ about the “g” thing, as otherwise Rauner delivered a concise - 35 minutes, much appreciated - refreshingly disciplined and relatively conciliatory speech. At one point he even went off script to praise Senate leaders trying to reach a bipartisan budget compromise, though House Speaker Michael Madigan was conspicuously absent from that acknowledgement and thank you.

About that still-evolving budget agreement, which includes an income tax increase, let us say this: We can do the math. As painful a concession as it is an obvious one, there is no question that Illinois needs more revenue, so blot-out-the-sun large are its shortfalls due to previous governing incompetence - a projected $5.3 billion budget deficit by fiscal year’s end, $11 billion in unpaid bills, $130 billion in pension liability. Cuts in that amount would be staggering, crippling not only essential investments in the state’s future - in schools, infrastructure - but falling disproportionately and almost unforgivably on the state’s most vulnerable.

That said, we cannot stomach any tax increases that fail to consider the ridiculous burden already being shouldered by Illinois residents long saddled not only with some of the worst representation in America but wages that are not keeping pace, that are not accompanied by a good-faith effort to also spend measurably less toward an ultimately sustainable balanced budget, that do not depart from business as usual, that still put partisan politics above pragmatic economics.

State Sen. Toi Hutchinson, D-Olympia Fields, is correct that “the state is in a very difficult position right now and it’s time to start acting like it.” We hope Madigan & Co. are listening.

To that end, we were glad to hear Rauner say that regulatory and tax reforms must be geared toward economic growth that is “higher than our rate of government spending growth,” including changes to a workers compensation system and a tax code too tilted toward property taxes and bedrock corruption that make the decision for employers and citizens to leave Illinois all too easy. Rauner is right, “We are failing to be compassionate because we are failing to be competitive.”

Beyond that, Rauner’s proposal to “create a technology and innovation center here in the Midwest that can rival Silicon Valley or North Carolina’s Research Triangle” was music to our ears, as we’ve pushed that very idea for decades with just the place for it - hugging an I-74 corridor that includes Champaign-Urbana and Peoria with a research university, an ag lab and some of the state’s biggest employers in between. That the governor hasn’t given up on legislators doing “the right thing” by passing “bills to put term limits and fair maps on the ballot” also is encouraging.

Finally, Rauner touched on Chicago’s unacceptable violence and criminal justice reforms, on lead abatement and the truism that “nothing stops a bullet like a job” in the state’s inner cities, on a public/private venture that would put a toll lane on I-55. And ultimately all of that must take a back seat right now to a real budget, which means the governor must be prepared to compromise, too, as well as exercise his influence with those who would torpedo any plan before it’s even ready to leave the dock.

Good luck to them, good luck to us.

___

January 30, 2017

Belleville News-Democrat

Scott Air Force Base left behind by The Left, but Right can make might for NGA

There is every logical reason to forget about the National Geospatial Intelligence Agency’s western headquarters being built next to Scott Air Force Base.

1. Done deal. The Obama Administration already made the decision that our military’s spy mapping should be done in a blighted, crime and drug-infested area of St. Louis as an urban renewal tool and make-good for the Ferguson, Missouri riots.

2. Wrong state color. Why would a Republican president do something to favor a very blue state over a red state? Everyone saw Missouri’s U.S. Sen. Roy Blunt at the right hand of President Trump on Inauguration Day.

3. Out of focus. Little attention is likely to fall on this Midwestern issue when we are building walls, tossing out immigrant children and watching for Muslims.

Still, hope will not die because there is faith in this community. There is also faith that putting a defense intelligence agency yards from its biggest customer and in a secure zone with plenty of room to grow and public transit and an interstate remains, frankly, the right decision for our nation’s defense.

Hope lives and grows with the trio of Republican congressmen from our area. Faith in our military community tells us the right decision will increase our might.

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January 30, 2017

The (DeKalb) Daily Chronicle

Our View: Rauner contract offer generous

AFSCME members across Illinois will begin voting Monday on whether to give their leaders the authority to strike.

We urge them to vote no.

Illinois’ largest state employee union, AFSCME, has been at an impasse with Gov. Bruce Rauner over the terms of a new contract that has been under negotiation since July 2015.

The union that represents 38,000 state workers wants pay increases and other benefits that would cost Illinois taxpayers an additional $3 billion over the life of the four-year contract.

More reasonably, Rauner wants to freeze the salaries of state workers who are the highest paid in the country when adjusted for cost of living. He also wants employees to pay a higher premium toward health benefits but also have more options. Workers currently receive what the Affordable Care Act categorizes as a platinum plan, but they pay a bronze premium rate while taxpayers pick up the rest. Under Rauner’s plan, employees could continue to pay a bronze premium but, like private sector employees, they would receive a bronze plan.

The governor’s offer also includes bonuses for high performers and those who show up to work regularly instead of across-the-board pay hikes that award everyone equally, regardless performance. Rauner wants the state to be able to test employees for drugs or alcohol if there is reasonable suspicion an employee showed up to work under the influence. And he wants overtime pay to kick in after a 40-hour work week instead of the current 37.5 hours.

Rauner and 20 other state unions already have agreed to similar contract terms.

Given Illinois’ fiscal condition - public pensions underfunded by almost $130 billion; a backlog of unpaid bills totaling more than $11 billion; a state budget crisis that has left Illinois’ social service agencies and its most vulnerable residents in peril; a population so overburdened by taxes tens of thousands are fleeing annually - Rauner’s offer is generous.

But AFSCME’s leadership wants more from taxpayers and less accountability for its membership. So it has asked its members for the ability to call a strike. The vote lasts from Monday through Feb. 19. A “yes’ vote doesn’t necessarily mean a strike will happen, but we urge members to vote “no” for the sake of all of Illinois.

We also urge Rauner to hold strong to his contract terms.

For the state to have a chance to get out of its current fiscal mess, it needs to change the way it conducts business. Holding firm on union contracts is one of those necessary changes.

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