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MANUFACTURER TO SHUTTER 2 ILLINOIS PLANTS, OPEN $26M INDIANA FACILITY
Illinois Policy Institute/
Vincent Caruso
Accepting a deal that includes $6 million
in subsidies, Wynright Corporation will expand its operations in Indiana
and close plants in suburban Elk Grove and Oak Lawn.
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 A suburban manufacturer has announced plans to invest $26
million into a new facility in Hobart, Indiana, while shuttering its two
Illinois plants.
Wynright Corporation, a subsidiary of Japan-based Daifuku, operates facilities
in the villages of Oak Lawn and Elk Grove. Both facilities are set to close this
fall after the storage equipment manufacturer accepted a deal from Indiana
officials that included $6 million in state subsidies and a $100,000 training
grant, according to Crain’s Chicago Business. The city of Hobart and Northern
Indiana Public Service Company, the region’s gas supplier, are also providing
economic incentives to the company.
A spokesperson for the Indiana Economic Development Corporation told Crain’s
that the new Indiana plant will replace both of the manufacturer’s existing
Illinois plants. The Indiana site is expected to create nearly 600 jobs within
three years.
More affordable property taxes and lower workers’ compensation costs in Indiana
have proven attractive to Illinois manufacturers, who are struggling in a far
less competitive business climate.
While awarding subsidies to select businesses is not a sustainable formula for
economic growth, the ease with which businesses can be poached from Illinois
through special economic incentives should not be overlooked. In June, Atlantic
Coca-Cola Bottling Co. announced that it would relocate its Rock Island facility
to Walcott, Iowa, accepting a property tax rebate estimated between $450,000 and
$500,000 and a sales tax rebate of more than $240,000.
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Illinois’ own efforts to spur economic growth with
special incentives have seen little success. Takeda Pharmaceuticals,
one of the state’s top tax credit recipients, recently announced
plans to close its 1,000-employee headquarters in Deerfield. And
rail car manufacturer Nippon Sharyo is closing its doors in
Rochelle, despite having received more than $10 million in state
subsidies and tax credits.
The perceived benefits of such carveouts are often short-lived,
temporarily concealing the pain induced by state’s unfriendly
business climate for select, hand-picked winners. However, these
failures haven’t convinced state officials. Illinois recently
awarded $1.2 million in tax credits to Flex-N-Gate, an auto parts
company, in exchange for the promise of nearly 300 jobs.
Wynright Corporation’s decision to shift operations across state
lines underscores the need for a stronger business climate in
Illinois.
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