Caterpillar has outsourced jobs to Japan on the grounds that the Illinois state tax rates were too high. Illinois states this was not the true reason for the relocation of one of the largest American manufacturers. Illinois made a bid to obtain the plant in order to move jobs to the state, but Caterpillar denied the bid.
The email denouncing the possible move with regards to the bid stated that the company felt Illinois would have been impractical. The governor does not agree. The chief executive told the governor that it was a relocation issue based on logistics. It was also mentioned by Caterpillar executives that they needed a large and deep-sea port to handle their needs. Illinois only offers the Great Lakes rather than a deep-sea location.
The downside is a loss of 23,000 jobs should full relocation occur to Japan. Globally Caterpillar already supplies the world with 125,000 jobs. The plan to transfer a three-decade-old plant to Japan would hurt the US economy. No decision has been made yet, and there are some considerations being made about moving the jobs to North Carolina. This would mean that those currently employed by Caterpillar would need to move to North Carolina, if that was a choice offered. Corporate moving has decreased in recent years, but Caterpillar may decide it is beneficial as a choice to help change the negative impression being left by its decision to ignore Illinois as a viable option for its plant.