Tuesday, September 24, 2013 5:10 pm
ADM moving HQ out of Decatur; Chicago in running
By DAVID MERCER and JOHN O'CONNORAssociated Press
The agribusiness giant's announcement Monday that it plans to move its headquarters out of Decatur to a destination with easier access to the rest of the world made some residents nervous. The company plans to leave the bulk of its local workforce - 4,400 jobs - in the town of about 75,000, and promised continued financial support to the community.
Still, the notion that ADM would outgrow Decatur - a prospect some in town had discussed for years - seemed to be coming true.
The state's immediate concern: Where will ADM's global headquarters, including about 100 of the company's top executives and another new 100 IT workers, land? And how much could it cost in possible incentives?
The company will only say the list of places it's considering is short. Chicago officials say they're in the running and talking to the company. Tax breaks or other incentives, some experts say, are likely to become part of any deal.
Given the current economic uncertainties in Illinois and beyond, "this is the game we play," said Therese McGuire, a professor of management and strategy at Northwestern University's Kellogg School of Management. "And, yes, I think the city and probably the state will (offer incentives)."
The company won't discuss any potential incentives, while state officials will only say that the governor's office has been in contact with ADM.
To some degree, ADM and all those soybeans that brought it here - the source of the pungent, sour smell familiar to anyone who's driven through the east end of town when soybeans are being processed - are Decatur.
"That smells of money, and that's what I tell people around here," said 65-year-old Pat McDaniel, a City Council member and executive director of the Macon County History Museum. He grew up in Decatur and recalls that smell as he went for drives with friends when he was younger.
"They'd roll up their windows - I'd roll it down because I like the smell," he said.
ADM made Decatur its headquarters in the late 1960s, moving from Minneapolis. Now half of the company's 30,000 workers are overseas but the headquarters has long been a reason that the world came to Decatur. In 1992, former Soviet leader Mikhail S. Gorbachev came to town for a visit - he was friends with then-ADM Chairman Dwayne Andreas.
The company calls itself quiet, but it's No. 27 on the Fortune 500.
In addition to leaving the jobs that make ADM the largest local employer, the company says it will make Decatur its North American headquarters, one of four regional headquarters alongside locations in Switzerland, China and Brazil.
ADM also says it will spend $750,000 over three years working with the Economic Development Corporation of Decatur & Macon County; give the local school district $500,000 a year over five years; and provide $1 million a year in unspecified community support for at least 10 years.
"We are investing in Decatur's economic development to help ensure it flourishes economically, in its schools to foster a strong workforce pipeline, and in critical social services to enhance the quality of community life," ADM CEO Patricia Woertz said Monday as the company announced its plans.
Shawn Flaherty lives in Decatur and, when he had a job, worked as for a contractor whose biggest client was ADM. He's been unemployed for six months, and worries the company's plans to leave most of its local workers in place could change.
"Everything's going to different countries," the 36-year-old said. "Just so they can save more money."
In some cases, it isn't different countries.
ADM competitor Tate & Lyle moved its North American headquarters from Decatur to Hoffman Estates in the western Chicago suburbs. The state Department of Commerce and Economic Opportunity gave the company $15 million in incentives as it moved 140 jobs out of town.
Chicago officials say they're talking with ADM and spokesman Tom Alexander said, "We'll do our best to keep them in Illinois."
In Decatur, McDaniel says, he's pulling for Chicago - better there than somewhere else.
"I'd rather see them up in the Chicago area, where they stay in Illinois," he said. "They make a lot of their profits in Illinois."
Illinois in recent years has found itself at least occasionally bidding to keep the headquarters for companies such as Sears Holdings Corporation and the CME Group in place as other states try to leverage Illinois' financial problems to lure them away.
But that doesn't mean Illinois must cut a deal with ADM, state Rep. Jack Franks said. The Democrat from Marengo has unsuccessfully tried to create a committee of experts to review tax-break deals.
"We have to have a lot of scrutiny here. I understand that ADM is still going to be keeping operations in Decatur," he said. "But moving their corporate headquarters, I'm not sure what economic impact that would have on the state."
"We certainly have to be competitive with other states," he added, "but we don't have to be stupid."
Associated Press writer Sophia Tareen contributed to this report from Chicago. Mercer reported from Champaign and O'Connor from Decatur.
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