The Clinton Herald, Clinton, Iowa

October 12, 2013

Illinois wins if Archer Daniels Midland, others remain in state

The Clinton Herald

---- — Archer Daniels Midland didn’t become one of the world’s largest companies by spending money recklessly.

So it should come as no surprise that the company is seeking the best deal possible as it looks to locate its new world headquarters and customer service center. The company announced two weeks ago that in creating a new world headquarters, 100 jobs would be moving out of the current headquarters in Decatur.

The reason for the move, which makes good business sense, is that ADM needs to be located in a city with an international airport and an area that offers more career opportunities for two-career families.

Chicago is one city that is apparently under consideration for the new headquarters and ADM Chief Financial Officer Ray Young told a House Revenue and Finance Committee last week that the company is seeking $20 million in state taxpayer assistance from the state.

Young was blunt about the company’s motives, saying ADM watches its money closely. “That’s the reason ADM has been successful,” he said. “ADM has been minding its pennies and nickels for years. From our perspective, we need to continue to be competitive in every aspect of our business.”

Lawmakers are questioning the need to supply tax incentives to a $24 billion company with a net income of between $1 billion and $2 billion annually. State Sen. Andy Manar, D-Bunker Hill, whose district includes Decatur, has said the General Assembly should not rush to approve a deal.

At the hearing, state Rep. David McSweeney, R-Barrington Hills, said the state is in no financial shape to give tax breaks to successful companies and House Majority Leader Barbara Flynn Currie, D-Chicago, suggested the practice of companies threatening to leave while also asking for tax incentives is “blackmail.”

Last week, Gov. Pat Quinn said he won’t sign any legislation approving tax credits for ADM or any other company until there’s a solution to the state’s $100 billion unfunded pension liability. Quinn urged ADM to spend its time lobbying lawmakers to arrive at a pension decision. The politics of pension reform and any tax incentive package will probably be worked out during the General Assembly’s October veto session.

It does seem unsettling, at first glance, that any company wants incentives to move jobs from one community in the state to another. However, Illinois would be the loser if ADM were to relocate its world headquarters to another city in another state.

And the politicians complaining about ADM’s request really have no one but themselves to blame. The state gave massive tax incentives to Boeing in order to lure its world headquarters to Chicago, a move that created at most 500 jobs. The state also gave incentives to Tate & Lyle in order to keep executive jobs in the state. Those jobs were moved from Decatur to Hoffman Estates. The state has also awarded incentives to other major corporations to stay in the state. ADM is merely following the trail that others have paved.

Illinois would be in a better bargaining position if its financial house were in order. Quinn is right when he says solving the pension problem should be the first priority, although the link between tax incentives and pensions is tenuous. But the state needs to do more to be business friendly, including lowering taxes, fixing worker’s compensation and creating a generally more business friendly environment.

In the end, Illinois and Central Illinois are better off if ADM’s world headquarters are located in the state.