There was a buzz in the room as members of the St. Louis
AgriBusiness Club gathered for a monthly get-together. A number of members
wondered aloud about the possibility of the city becoming the new headquarters
of Archer Daniels Midland.
The agribusiness giant, long a fixture in Decatur, has its
proverbial hand out, asking the state of Illinois for financial incentives. One
may properly call it blackmail, but it’s not illegal, and ADM certainly isn’t
the first company to engage in this dubious tactic.
The company is looking for $24 million in tax breaks to keep
its headquarters in the state. ADM has made it clear it will be moving its
headquarters — it’s just a matter of where.
Chicago is the most likely choice, though executives have
hinted that if the company can’t get the incentives, it could move out of state.
The two likeliest choices are Minneapolis or St. Louis.
This isn’t without precedent. Sears got tax relief in 2011
in order to keep its headquarters in suburban Chicago.
And ADM isn’t the first ag company with its hand out. CME
Group — the corporation formed out of the former Chicago Board of Trade — also
successfully lobbied for incentives that year. Peoria-based Caterpillar made
noises last year about moving its headquarters out of the state.
A bill introduced by state Rep. John Bradley, D-Marion,
would provide credits against ADM’s tax bill and would reduce electric rates if
the company keeps its headquarters in the state.
There is some irony here. Bradley, like most legislators in
deep southern Illinois, usually decries anything that favors Chicago.
Oh, well. Welcome to the upside-down world of modern
This is an interesting ongoing story, and two things jumped
out at me when I read about it in the Chicago Tribune and Decatur Herald-Review.
First, it is interesting that a state with a $90 billion pension shortfall and a
comptroller who is forced to keep payments on bills in the air like a juggler is
being asked to cough up money to a private company that is doing very well,
But that has been the new normal in recent years not only in
Illinois, but in many states and communities desperate to keep precious
That brings me to the second interesting point. All this
brouhaha is about 100 jobs — and executive jobs at that. The more than 4,000
other employees who work at ADM in Decatur would remain there.
Now in this economic environment, 100 jobs is nothing to
sneeze at. But the sought-after incentives equal about a quarter-of-a-million
dollars per job.
To be fair, ADM also claims it will create 100 technology
jobs at its new headquarters. Still, the impact wouldn’t be great in the overall
scheme of things.
It’s difficult to blame legislators for wanting to keep jobs
here. A similar drama — minus the demand for incentives — unfolded a few years
ago in St. Louis when Anheuser-Busch was being targeted for a hostile takeover
by Dutch brewer InBev.
InBev prevailed in that case, but there has been little
change — St. Louis still is the North American headquarters of the newly named
Anheuser-Busch InBev, and it lost few jobs.
I believe another reason for the scramble to keep ADM here —
and the previous moves with Sears and other companies — is pride. A city or
state doesn’t want to lose the prestige of being the headquarters of great
I don’t believe there is anything wrong with that. That
should be a factor in such negotiations.
Whether the price is right is a legitimate debate. It will
be interesting to see how it all plays out.