Caterpillar Inc. has scrapped plans to build a new office complex in Downtown Peoria and will move its global headquarters to the Chicago area by the end of the year.
The upper echelon of executives, including newly installed CEO Jim Umpleby, will begin relocating later this year, with up to 100 employees total moving by year’s end. About 300 employees will work in the new office at an as-yet undecided location once the transition is complete.
The move comes as the company faces a weak equipment market that has been cutting into its bottom line. Last week, the construction equipment maker reported a wider fourth-quarter loss on charges and higher restructuring costs. It has been cutting jobs and facilities over the last several years.
“As a result of continuing challenging market conditions and the need to prioritize resources to focus on growth, Caterpillar will not build the previously announced headquarters complex in Peoria,” the company said.
Studies for modernization of the company’s global headquarters that began in 2012 focused almost exclusively on Downtown Peoria and the surrounding region, according to accounts given by Caterpillar at the time.
Then, in February 2015, the company affirmed its intention to remain local and global when it unveiled plans for a sprawling campus to be built on the Chase Bank building block, across the street from the current headquarters.
Doug Oberhelman, who retired as CEO at the beginning of the year but remains the chairman of Caterpillar’s Board of Directors through the end of March, said simply at the time: “Caterpillar will stay in Peoria. I repeat, we will stay in Peoria.”
Much has changed since those plans first were set into motion – to Caterpillar’s plans and bottom line.
“Locating our headquarters closer to a global transportation hub, such as Chicago, means we can meet with our global customers, dealers and employees more easily and frequently,” said CEO Jim Umpleby.
Caterpillar said the vast majority of their people will remain in central Illinois.
Archived Article of the Previous Plans
CATERPILLAR REAFFIRMS ITS COMMITMENT TO ILLINOIS AND PEORIA AS COMPANY’S GLOBAL HEADQUARTERS
After a multiyear study focused on modernizing its global headquarters, Caterpillar Inc. today reaffirmed it will remain in Peoria, Illinois, and revealed a design that will eventually span 31 acres on the city’s riverfront. The key elements of the campus are:
- A three-tower building located in the heart of a six-block campus, which includes innovative work spaces and amenities designed to retain and attract the finest talent in the world.
- A commitment to invest and act as a catalyst in Peoria, helping revitalize the downtown and the region as a vibrant destination. While Caterpillar is truly a worldwide company with facilities that span the globe, Peoria remains its headquarters.
“Caterpillar’s roots in the Peoria area run deep, and this year we celebrate 90 years as a company – a perfect time to share our plans of where we plan to be anchored as we continue to build, develop and power the world,” said Caterpillar Chairman and CEO Doug Oberhelman. “This campus represents an investment in both our people and community, with such features as collaborative work areas, improved technology, a more energy-efficient design, green space and an expanded showcase of our historical equipment, along with food and retail shops – an inviting destination not only for employees, but also for customers, dealers and suppliers from around the world.”
This is a multiyear project beginning with minor site preparation this year, but construction will not begin in 2015. Work continues with the city of Peoria – a key partner throughout the study – on a redevelopment agreement and initiatives like campus design and downtown streetscaping.
“While we are moving forward, we’ll manage our costs very carefully in a tough global environment,” Oberhelman added. “We recognize that building a global headquarters is a long-term, strategic investment aimed at improving our competitiveness. This new campus will position us for decades to come, serve as an engaging, more productive environment for our current workforce and improve our ability to recruit the best and brightest employees, who are hands down our most valuable asset. We also shouldn’t underestimate the potential of this project to serve as a springboard for regional economic development and look forward to continuing our strong partnerships with our key area stakeholders.”
The six-block campus includes the following:
- The headquarters building, consisting of three office towers with parking structures below, will have sustainable design features and is sized for approximately 3,200 people, which represents a consolidation of employees who are currently located in downtown Peoria today. The towers will be connected by a three-story horizontal office space spanning two city blocks, easily identified by the iconic Cat® D11 Track-type Tractor high drive design.
- An energy center utilizing Cat products and solutions that will sustainably support the electrical, heating and cooling demands of the campus.
- Green space, walking and biking paths, food and retail options and employee amenities including fitness and childcare services.
- A historic equipment display across the street from the Caterpillar Visitors Center, which opened in 2012, rounds out the campus.
Illinois Governor Bruce Rauner joined Oberhelman for the announcement to tout Illinois’ responsibility to businesses who call the state home. Illinois remains Caterpillar’s largest concentration of employees and facilities anywhere in the world, with about 22,600 employees and two dozen facilities throughout the state.
“This is outstanding news for Peoria, Central Illinois and the entire state of Illinois,” said Governor Rauner. “Caterpillar has been a tremendous Illinois employer for 90 years. This is the kind of project we want to see – businesses making investments to engage, attract and retain the brightest and most innovative talent. Today’s announcement reaffirms its commitment to our great state. We as a state government need to renew our commitment to job creators in Illinois. As Caterpillar and other companies prepare themselves to compete and grow in the 21st century, Illinois needs to make sure it is a help and not a hindrance to their efforts.”
Peoria Mayor Jim Ardis was also part of the announcement, pledging his support to a company that has employed generations of families in Central Illinois.
“We are thrilled Caterpillar has called Peoria its global headquarters for decades and will for decades more,” said Peoria Mayor Jim Ardis. “Caterpillar has been and continues to be an important key to our community’s growth and stability. This new global headquarters is a major investment in growing the region’s economic development.”
A display, containing a scale model and renderings of the campus, is available for viewing in the lobby of the Caterpillar Visitors Center.