Four Illinois manufacturers announced in October that they are leaving Illinois and relocating to bordering states to open up new plants facing less regulation.
These four manufacturers -- Merisat, an artificial sweetener producer; Colbert Packaging Corp., a packaging products company; Altria, a tobacco product maker; and Vonco Products, another packing products company -- are in the process of rebuilding their client bases through these new plants.
“Last year, six companies moved out,” Michael Lucci, vice president of policy at the Illinois Policy Institute, told Illinois Rising.
The trend, happening especially in northeast Illinois, is extremely harmful to the entire state and to the workers at these plants. The plants are being relocated to states where regulations, taxes and financial burdens are lessened substantially. For example, Wisconsin "does not tax manufacturing income ... one more advantage they have over Illinois from manufacturing businesses,” Lucci said.
“From what I can see is there is a lot of regulation (in Illinois)," Al Popovich, owner of small manufacturer Accurate Design and Fabrication, told Illinois Rising. “The cost here is just astronomical."
Popovich also said state government is to blame for the closings of these manufacturers. The state does not give back to the companies or invest in them, he said. With high insurance rates, extreme taxes and continuous regulations, it is difficult for companies in Illinois to be successful and employ many workers, he said.
Popovich does credit his local customers for his businesses’ success.
“A lot of our clients are local, and that helps us a lot,” Popovich said. “If our clients moved, we would either have to move with them or find new ones in the state, which would be very difficult.”
Many manufacturing companies moving out of Illinois are moving to locations where a large client base can be found, and where they can employ higher numbers of workers. Other issues the Illinois manufacturing sector is facing are that “Nobody ever moves in to Illinois,” Lucci said, and employees are not paid suitable wages.
When the state does not invest in good working conditions and proper wages for employees, they flee and find other, better work. There is also a rising trend in the lack of young men and women moving to Illinois to find work, which makes it apparent either jobs in Illinois are slim or the working conditions are below par.
In regard to employee wages, Popovich supports raising employee wages.
“I think they should be paid more," he said. “It's simply unfair to compete with companies across the border."
The rising costs that manufacturing company owners face is not helpful or supportive for maintaining a business in the state of Illinois.
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