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Push to keep jobs in area fell short

State agency says Caterpillar ‘never entertained’ offers

Published: Wednesday, June 11, 2014 1:15 a.m. CDT • Updated: Wednesday, June 11, 2014 10:53 a.m. CDT
Anchor Coupling plants in Sterling and Dixon will be closed in early 2015 and operations will be moved to Menominee, Mich., parent company Caterpillar announced Friday. (SVM file photo)

STERLING – The company that announced Friday it was moving 170 positions from Anchor Coupling plants in the Sauk Valley to Michigan “never entertained any conversations” with a state agency that was attempting to preserve the jobs here.

On several occasions in the past 4 weeks, representatives from the Illinois Department of Commerce and Economic Opportunity (DCEO) reached out to Caterpillar to discuss possible incentives packages to keep the three plants in the state, department spokesman Dave Roeder said.

Those attempts never reached a point where incentives or an offer could be discussed, Roeder said, adding that Caterpillar “never really entertained any conversations” with the state.

Instead, the company announced it will move its operations from two plants in Sterling and one in Dixon to its facility in Menominee, Michigan.

Rachel Potts, a spokeswoman for Caterpillar, said because of the company’s long history in Illinois it was aware of the types of incentives packages it was likely to receive.

“The DCEO was aware of this project, and proactively reached out to Caterpillar to offer any assistance it could provide,” Potts said in an email. “Caterpillar did work with representatives from Michigan to receive business incentives for this project.”

Because the Michigan incentives hadn’t been finalized, Potts said she was unable to comment on the specifics.

Caterpillar doesn’t consider incentive packages alone when considering a consolidation of this kind, Potts said, and looks at all financial aspects of the decision.

“The analysis for this project considered overall facility costs, internal logistics costs, and the ability to leverage the existing team in Menominee, [Michigan],” she said in an email.

“Incentives are one factor in the overall decision, but not the main driver in this particular decision,” Potts said.

The decision was made after a yearlong consolidation study by Caterpillar.

Operations in the Sauk Valley plants will begin to “ramp down” toward the end of this year, according to Caterpillar, and the plants are expected to be closed in the first quarter of 2015.

On Friday, Potts said Caterpillar expects to add about 120 jobs at the Michigan plant during the next year to accommodate for the increased production.

Now, the DCEO will work with local governmental officials to replace the lost jobs, Roeder said, adding that the department has worked out eight incentives-based deals for the area since 2011.

“We hope to have that done in fairly short order,” he said, “because it does seem like there has been good demand for getting employers into the area.”

Among the first steps in that process, Roeder said, is for local and state agencies and governments to go to their contact lists for when properties become available, something he said most municipalities have.

Then the incentives can be discussed, he said, which can range from credit toward a company’s income taxes to grants to help with facility or infrastructure updates.

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