Danville, Ill., has seen better days. Quaker Oats, one of the area’s largest employers and a fixture of the region for 55 years, announced in April that it will be closing in June, leaving more than 500 workers jobless. In a part of the country already hit hard by economic troubles, this one stings.
Yet, while it’s tempting – and to date has been all too easy – for state and local leadership to blame PepsiCo, Quaker’s parent company, for the plant’s closure, they are pointing fingers in the wrong direction. Instead, it’s time for these leaders to look in the mirror. Sadly, it is their own policies that played a significant role in driving Quaker away.
Lloyd Randle, a former Danville alderman and retired Quaker employee, placed the blame for the closure on the company, saying that “corporate decisions are driven by shareholder profits, and expectations almost always supersede the casualties when these decisions are made.”
Mike Marron, president and CEO of Vermilion Advantage, also placed the blame on PepsiCo, questioning the company’s motives from a “corporate responsibility standpoint.”
But Quaker’s closure is just the latest in a series from a state that has all but declared war on industry. Other companies, like Caterpillar, Boeing and Tyson Foods, have given up on the Land of Lincoln, relocating to states with more business-friendly environments.
Earning the title of “worst state to start a business” in a recent survey is not just a red flag for companies considering Illinois – it’s a reason for companies already based in Illinois to move their operations elsewhere. Especially when the same survey ranks neighboring Indiana as one of the best states to do business.
Illinois businesses are burdened with excessive taxes. Companies like Quaker are forced to pay the nation’s second-highest corporate tax rates at 9.5%, only slightly better than Minnesota’s 9.8%.
When it comes to workers’ compensation costs, Illinois doesn’t just lag behind its neighbors – it comes in dead last in the Midwest. Apart from Missouri, Illinois is surrounded by right-to-work states. States like Indiana, Iowa and Wisconsin are able to attract companies because they have legislation on the books meant to encourage job creation and company retention.
Quaker’s decision to close comes as no surprise to many former employees. “This was an easy way out of Illinois,” says Paul Martin, a 25-year veteran and recent retiree. “The Danville factory is just one of many manufacturing plants closing these days. It’s Bidenomics mixed with Pritzker.”
Following Quaker’s announcement, Gov. J.B. Pritzker, D-Ill., touted his commitment to supporting workers impacted by the closure through training and reemployment services. Pritzker further added that his administration will be discussing “future options for the site with the company and are eager to ensure this site remains an important economic driver for the region.”
Unfortunately, this reactive approach underscores Illinois’ chronic inability to retain businesses. Investing in new training for workers is great, but wouldn’t it be a lot easier to keep existing industries in the state? Instead of playing defense, why not lower the state’s corporate tax rate or reform existing worker compensation laws to maintain those businesses already in Illinois?
Despite Illinois’ chronic economic malaise, not a single bill has been introduced by the Democratic supermajorities in the Illinois legislature to address this issue. Such legislative inertia comes at a steep cost.
Martin laments the failure of state leaders and decades of poor decision-making. “The ship was sinking for the past few years,” he says of the closure. “It was like the Titanic, but this is a hell of a fracture to the local economy.”
Martin is right. Quaker’s closure isn’t just about jobless numbers. It’s about the lives and families that continue to pay the price for the state’s dysfunction.
Quaker’s decision to pack up and leave Illinois was not driven by corporate greed – but even if it were, PepsiCo has every right to look out for the broader interests of their over 300,000 employees. While it is easy to empathize with the workers affected by this decision, they are unfortunately caught in the crossfire of Illinois’ hostile business environment.
If the factory were located just five miles east in Indiana, these same 500 employees would likely still be punching the clock. That tiny gap in distance underscores the stark difference: One state rolls out the red carpet for business, the other rolls out red tape.
It’s high time Illinois got the memo – change or continue to watch the state’s workforce and, by consequence, the number of taxpayers, dwindle as they leave for better opportunities. Maybe Quaker’s exit from Danville was truly unavoidable, but it is impossible to ignore the missed opportunities that might have altered such a fate.
