- [Narrator] Illinois is home
to over 35 Fortune 500 companies,
scattered across Chicago, its suburbs,
as well as other parts of the state
but in recent months,
three major corporations have announced their exits.
- The Chicago area losing another corporate headquarters.
Caterpillar is moving to Texas.
- Boeing is expected
to move its corporate headquarters to Virginia.
Billionaire Ken Griffin
is relocating his hedge fund firm headquarters
from Chicago to Miami.
- So any time that major names depart a metropolitan area,
it's a blow to sort of that metropolitan area's ego.
- [Narrator] So what does the exit
of several major employers mean for the state
and how does it connect to broader economic trends?
- You hear companies all across country talk
about the business committee,
saying oh, we may leave, we might do it.
Well, it's happening here.
Those are big announcements.
- [Narrator] Tom Stringer specializes
in site selection at the accounting network BDO.
- So Chicago would be wise to listen,
try and understand the why
and then try to solve those issues.
- [Narrator] That why is different
according to each company.
Citadel's CEO said he views Florida
as a better corporate environment
and has previously complained about Chicago's crime.
Caterpillar said the move supports its strategy
for profitable growth,
and said it wasn't getting any economic
or tax incentives related to the move.
Caterpillar has steadily invested
in right-to-work states like Texas over the last decade.
And Boeing's announcement was a long time coming,
according to analysts like Stringer.
- When the Boeing decision to come from Seattle
to Chicago took place to really a lot of fanfare
but it was kind of strange at the time
that Boeing didn't pick Washington then
given the level of defense work that they do
and the regulatory environment, FAA relationships.
- [Narrator] Lawmakers and unions
have previously criticized Boeing
for the remoteness of its Chicago base
from its jetliner operations in the Seattle area.
In a statement, Boeing said,
"Northern Virginia makes strategic sense
for our headquarters with the proximity
to our global customers and stakeholders,
as well as world-class engineering and technical talent."
The move brings Boeing closer
to its largest customer, the Pentagon,
as well as to lawmakers and regulators.
Boeing said its CEO and CFO will move
but the majority of its 1,000 employees
will remain in Illinois.
Meanwhile, Caterpillar announced roughly 230
of its corporate roles will move
to the new Texas headquarters
with around 17,000 jobs remaining in Illinois.
- If those headquarters' jobs are small
but highly compensated making a lot of decisions,
having a lot of those folks come in,
using a lot of corporate services, active in the community,
even though it might be a limited number of jobs,
that defection hurts significantly.
- [Narrator] The moves are seen as a setback
for Chicago and Illinois leaders' efforts
to bring more companies to the area.
In late June, the Chicago Mayor's Office
said Citadel's exit was disappointing.
The office added that Chicago's economic outlook
has never been stronger,
and cited more than 35 new company relocations
and 58 expansions made this year.
The Illinois Governor's Office did not respond
to a request for comment on the companies exiting.
In a previous statement, Governor J. B. Pritzker
said the state continues to be a leader
in attracting companies.
- So having corporations headquartered in your area
is both important from a jobs perspective
but also a sort of prestige standpoint.
- [Narrator] And a company's relocation
could have ripple effects
throughout the local economy.
- Whether that's the turkey sandwich for lunch,
the dry cleaning that's pumping money
into their local economy back in the Chicago suburbs
or if you live in an apartment downtown.
So those little economic catalysts will be gone
and that will hurt.
- [Narrator] According to a recent report,
approximately 4.4 jobs are created
in the local non-tradable sector
for every job created in a local high-tax sector.
Some non-tradable jobs are lawyers,
dentists and retail clerks.
And in the post-pandemic economy,
some analysts say workers are still in the driver's seat.
- People are definitely out in front taking the lead,
making lifestyle decisions
and companies are playing catch-up.
- [Narrator] Workers are moving from the coast
to the middle of the country and Florida
and by many measures, red states.
Those that lean Republican
have recovered faster economically
than Democratic leaning blue ones.
- Following the national trends,
there's just so much more growth
in the South and Southwest
and that's where some of these companies have moved.
- This movement has implications.
Illinois is one of seven states
that lost a congressional seat following the 2020 census,
while Texas and Florida,
the new sites of Caterpillar and Citadel,
are two of six states that gained at least one seat.
- The loss of a congressional seat
is partly, in Illinois's case,
it is because of the true sort of loss
of population, although it was very close
to sort of zero growth.
But more importantly, it's just not growing
as fast as other areas.
- [Narrator] One area in particular
is picking up Midwestern workers and employers.
- The Dallas, Fort Worth region in Texas
in particular is where a lot of those folks are coming.
DFW, similar to the Chicago for a lot of business reasons
in terms of office environment,
diverse corporate services, ease of travel
back and forth across the country.
So Dallas has always been Chicago's kind
of shadow competitor.
- Florida is similarly benefiting from relocations
as it's beginning to see an effect
on its economies and finances.
Florida is on track to register a record budget surplus
for the fiscal year that ended June 30th,
which it attributes in part to new residents.
Both Florida and Texas do not have individual income taxes.
Illinois, however, has a flat income tax rate of nearly 5%.
Those taxes account for around half
of the state's total revenue.
The Illinois Chamber of Commerce has advocated
for streamlining regulations
and reducing taxes in the state.
Chicago is still attracting companies
with its roots as an economic hub for the Midwest,
along with its international airport.
So even as several companies exit Illinois,
other corporations like Kellogg's snack division
are expecting to move in.
And Google says it plans
to purchase a new office in the area,
Chicago's famed Thompson Center.
- If it wasn't evident before,
then surely it is crystal clear now.
Google is one of Chicago's most important companies.
- Tech firms had really been starting
to bulk up and grow in the Chicago area
before the pandemic
but that, of course, was very much slowed down
by the pandemic.
So this will be an interesting new wrinkle
in downtown Chicago to keep an eye on.
- [Narrator] As companies try to attract new hires,
some states are also working to recruit companies.
- Certain states are extraordinarily proactive
and cities are extraordinarily proactive
in recruiting based on things like quality of life,
incentives, workforce, showing
and touting the benefits of certain community.
That's because it increases quite frankly tax flow
to a community.
It's a return on investment.
You'll bring customers in if you will.
- [Narrator] For example, Virginia Senator Mark Warner
said he had been lobbying Boeing senior leadership
for over a year to move its headquarters to his state.
- I see the cities that are really winning
are those that in the hunt, in the game
and are out knocking on doors going
to meet with companies.
Those might not have immediate results
but two, three, four years down the line,
when a CEO changes over
or the key decision makers change over,
that's remembered, and that's often
when it becomes successful.
(lively music)