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An Illinois company that has built forklifts and other material handling equipment in the state for more than 35 years announced last week that it was pulling up stakes and moving to neighboring Indiana.
Hoist Liftruck, currently of Bedford Park, Illinois, will move to a new 550,000 square foot facility in East Chicago, Indiana, that was formerly used to build tanks for the US military, according to company CEO and founder Marty Flaska.
Rising taxes and too many workmen’s compensation claims in Illinois is what finally drove the company out of the state, Flaska told local news outlets.
Bad for Illinois, Good for Indiana
The move is expected to save Hoist Liftruck “millions of dollars per year”, according to Flaska. It’s also a boon to Indiana’s economy as the forklift maker plans on adding up to 500 new jobs to its current roster of about 300 employees by 2022.
The state of Indiana reportedly gave Hoist up to $8.25 million in conditional tax credits, as well as training grants and other incentives, according to the news reports.
Illinois’ Economic Struggles
Illinois currently has the lowest credit rating of all 50 states, according to Standard and Poor’s 500. It’s the only state in the country with an “A-minus” rating, which is on par with such nations as Botswana, Latvia and Slovenia.
It doesn’t help that two of the state’s last three governors — Rod Blagojevich and George Ryan — were sent to prison in connection with different corruption cases and that the current governor, former venture capitalist Bruce Rauner, finds himself stuck in a political deadlock with the state’s Democrat-controlled House and Senate.
Illinois currently is operating without a budget, although state workers continue to be paid as the result of emergency legislation.
Exodus of Companies
Hoist is only the latest company to flee the state as a result of Illinois’s current business environment.
On July 14, DE-STA-CO, a machine parts maker, announced it will close its plant in Wheeling, Illinois, and transfer its 100 jobs to a new facility outside Nashville, Tennessee.
Two days later, General Mills announced it would close its factory in West Chicago, Illinois, putting 500 local employees out of work.
Mitsubishi Motors and the company that makes Oreos and Chips Ahoy cookies announced Illinois layoffs and plant closures in recent weeks.
Others companies that have left the state include Kenall, a commercial lighting manufacturer that moved from Gurnee, Illinois, to nearby Kenosha, Wisconsin, in December 2014, taking hundreds of jobs with it, and Office Depot/Office Max, an office supply retailer which moved its headquarters from Naperville, Illinois, to Boca Raton, Florida, in 2013.
And companies aren’t the only ones leaving the state. According to the US Census Bureau, more than 10,000 residents moved out of Illinois between July 2013 and July 2014. It was the first time the state’s population decreased since 1988.
Illinois Fights Back
While Indiana may benefit from Hoist’s decision, Illinois plans to fight back.
Illinois governor Rauner told the Chicago Tribune’s editorial board in April that he wants to “rip the economic guts out of Indiana” and poach that state’s jobs as part of his plan to turn around the Illinois economy.