The world's largest maker of construction and mining equipment, with $55 billion in annual sales and revenue, Caterpillar will expand and overhaul its headquarters with a three-tower building as its centerpiece, CEO Doug Oberhelman said.
"Caterpillar will stay in Peoria," Oberhelman announced to a standing ovation of about 200 dignitaries at the company's downtown visitors centre.
The morning gala reserved a prominent seat for new Republican Gov. Bruce Rauner, whose campaign focusing on repairing the state's financial cracks and making Illinois more attractive to business won him the job over Democratic Gov. Pat Quinn, with whom Oberhelman had clashed about fiscal policy.
"Great day for Illinois. Outstanding day for Illinois," Rauner proclaimed. "Great day for Peoria."
Caterpillar, whose current headquarters was built in 1967, when its annual sales were just $1.5 billion, will expand the site to 31 acres and six blocks and add walking and biking paths, and "innovative" workspaces. The company has about 2,400 employees in its main headquarters and 800 others spread around downtown.
Oberhelman would not say how much the company would spend. The creation of the headquarters study raised concerns that Caterpillar could move, and Rauner said the company was courted heavily by other countries as well as states. Another major central Illinois employer, agribusiness firm Archer Daniels Midland Co., moved its international headquarters from Decatur to Chicago last year.
Rauner, who named Oberhelman to a transition committee advising the governor on top priorities for his first 100 days in office, said Caterpillar never asked for favours.
"They never came to me or previous governors and asked for any special deals or any special treatment, tax breaks, rebates or kickbacks," Rauner said. "They just wanted to be treated with respect and know that Illinois is going to be fiscally responsible and run right, the way Caterpillar is run right."
Oberhelman told reporters after the announcement that the company considered the pros and cons, but decided early in the review process to stay.
Asked whether Caterpillar's decision might have been different if Quinn had won re-election, Oberhelman responded that he was glad to see Rauner in office and appreciated the Republican's bluntness about confronting Illinois' financial mess.
"Everyone in the state knows how deep the problems are and it's going to take some time to dig out. He's at least talking reforms and structural changes, which is what we need," Oberhelman said of the governor.
The decision by Caterpillar, a name synonymous with Peoria for nearly a century, to stay put presents a tremendous opportunity for the city to put out the "open for business" sign, Mayor Jim Ardis said.
"The phones, they're probably dialing as we speak, and I'm not saying that loosely," Ardis said. "The acknowledgement from Caterpillar that they are staying and they're going to be here for decades, that alone is going to seriously allow us to go out there and market Peoria and say, 'Now's the time.'"
Caterpillar's new headquarters building in Peoria, about 160 miles southwest of Chicago, will consolidate its local employees in one spot. The company did not say when construction would start.
Contact John O'Connor at https://twitter.com/apoconnor