|
 Illinois is no longer being
considered for Toyota and Mazda’s planned North American auto assembly plant.
The coveted 4,000-job factory will go elsewhere, likely to a southeastern state.
In an interview with Greg Hinz of Crain’s Chicago Business, an official from
Intersect Illinois, the state’s privately run, nonprofit economic development
corporation, indicated that the reason Illinois lost out was because of a lack
of shovel-ready sites and a statewide Right-to-Work law.
“While we showed very well, particularly in the areas of workforce, and our
proposal was very well received, in the end the site readiness of some other
locations took us out of the consideration set going forward,” Intersect
Illinois CEO Mark Peterson told Crain’s.
Two-thirds of global chief financial officers surveyed by CNBC in 2015 said a
Right-to-Work law is either “important” or “very important” when deciding where
to grow their businesses. This puts Illinois workers at a severe disadvantage
for attracting manufacturing.
 Over 1,100 businesses have blacklisted Illinois because it is not a
Right-to-Work state, Jim Schultz, the former director of the Illinois Department
of Commerce and Economic Opportunity, told Crain’s in 2015.
With the exception of Missouri, whose statewide Right-to-Work law has been
suspended pending a voter referendum, all of Illinois’ bordering states have
enacted Right to Work.
“The challenges with [manufacturing and HQ searches] is that although they are
public in their media exposure, they are still very protected and confidential
when communicating exactly what factors weigh in on final decisions. … [M]any
national site consultants charged with making recommendations for corporate
relocations and expansions will not even consider a state that is not a
right-to-work state,” Peterson continued in the Crain’s interview. “In this
case, the three states I am told are still in the running are all right-to-work
states.”
 Peterson later stated in his interview with Crain’s he would be working to
increase efforts to make sure that possible manufacturing sites are
shovel-ready. It is believed Toyota and Mazda examined Rochelle, Illinois, as a
possible spot for the plant. And though a local economic development official
claimed at least one site in Rochelle was “shovel-ready,” it was evidently not
up to snuff for the decision-makers behind the Toyota-Mazda plant.
[to top of second column] |
While Peterson’s
revelation about the state’s failure to stay in contention for the
Toyota-Mazda plant is disappointing, it is not surprising. Illinois’
lack of a Right-to-Work law puts it at a competitive disadvantage
with other states for attracting manufacturing jobs.
While the ability of
local governments to implement Right to Work is currently being
challenged in the courts, Right-to-Work opponents have tried to stop
local governments from being able to pass their own Right-to-Work
laws in Illinois. One anti-Right-to-Work measure, Senate Bill 1905,
passed both chambers of the General Assembly, but was vetoed by Gov.
Bruce Rauner in September.
While Peterson’s interview with Crain’s makes it clear that Right to
Work played a factor in why Illinois was not ultimately chosen for
the Toyota-Mazda plant, there are other policies that make the
Prairie State an expensive place for manufacturing.
Illinois has the highest workers’ compensation costs in the region,
and some of the highest property taxes in the nation, both of which
drive up costs for manufacturers. Illinois’ average workers’
compensation costs are 34 percent higher than the average costs in
surrounding states. These factors, combined with those mentioned by
Peterson, make it unsurprising that Toyota and Mazda took a pass on
the Land of Lincoln.
Take candy maker Haribo of America, for example. Both Wisconsin and
Illinois have state tax incentive programs in which companies get
tax breaks in exchange for jobs and investment. However, Haribo
ultimately decided to build its $242 million plant with 400
manufacturing jobs in Kenosha County, Wisconsin. But it elected to
expand its corporate headquarters in Rosemont, Illinois, where it is
expected to create 55 new jobs.
Both states had tax break deals with the same company. Yet, Haribo
of America chose Wisconsin for its plant, even though it already had
its corporate headquarters in Illinois. Wisconsin has lower workers’
compensation costs than Illinois, and it is also a Right-to-Work
state.
Illinois needs pro-growth reforms to attract manufacturing jobs.
Otherwise, more manufacturers will look to invest elsewhere.
Click here to respond to the editor about this article |
