Caterpillar: Goodbye Illinois, Hello Indiana’s Right To Work

Caterpillar digging into Indiana

Caterpillar has been a mainstay Illinois-based company for generations but no longer.  The power and influence of big labor has impacted the company for too long, damaging its bottom-line and hurting workers.

Now that Illinois’ neighbor, Indiana, has become a Right to Work state, Caterpillar is exploring their options, according to The Detroit News’ Robert Laurie:

Back in 2009, Barack Obama announced that Caterpillar had promised to rehire some of its laid-off workforce if his stimulus proposal passed. This week, the nation’s largest manufacturer of mining and construction equipment announced that it would be moving a factory from Canada to Indiana. In the process, it will create 450 new jobs in the state.

You’d think the president would be happy, but this is not quite what he had bargained for. Take note, Governor Snyder. Caterpillar’s move came almost immediately after Indiana passed a right-to-work law, which will make union dues voluntary in the state. Labor officials claim Right To Work will deplete union funds, making it much more difficult for them to organize factories.

Coincidence? Workers who were formerly employed at the London, Ontario factory have been locked out since the beginning of the year after their union refused to accept pay cuts which would have kept the operation profitable. As a result of Big Labor’s obstinance, these jobs have been permanently eliminated and the plant relocated. The work will now be done in Muncie, [Indiana].

Big business has already been fleeing Quinn’s state after he signed a massive 2011 tax hike. Illinois had been in the running for a new Caterpillar facility of its own, one that would bring a whopping 1,400 jobs to the area by relocating a factory currently operating in Japan. This plan has now been completely scrapped.

However, while Cat may not have directly mentioned Right To Work, it did slam the way Illinois is treating business. “Please understand,” Caterpillar representatives said in an email, “that even if your community had the right logistics for this project, Caterpillar’s previously documented concerns about the business climate and overall fiscal health of the state of Illinois still would have made it unpractical for us to select your community for this project.”

Governor Quinn is now waving goodbye to 1,400 potential jobs.

While the location of the eventual facility has not been revealed, North Carolina is strongly rumored. North Carolina passed its Right To Work law way back in 1947, and currently plays host to Caterpillar’s world headquarters.

All of this should be of grave concern to Michigan’s Governor Snyder, who has been ambivalent towards the Right To Work issue. He’s gone on record as saying that he wouldn’t be opposed to signing such a bill if it reached his desk – but he also seems genuinely disinterested in pushing his Republican Legislature to make it happen.

Considering Detroit’s dismal unemployment numbers, the chokehold of the UAW, and the fact that the state to our immediate south is dealing with its own union image, the pressure is now on Rick Snyder. Indiana is just a few miles away and, with the stroke of Governor Mitch Daniels’ pen, it’s become much more attractive to manufacturers.

If Michigan cities are to compete for factory jobs, when there’s a Right To Work state within commuter distance, Snyder will be forced to re-evaluate his indifference.