By STEVE BINDER
Illinois Correspondent

PEORIA, ILL. — That forceful thud heard from Washington, D.C., last week may have been Caterpillar, Inc. CEO Douglas Oberhelman’s fist against the lectern, as he stated clearly the company has no intention of leaving its home in Illinois.
As he spoke before the U.S. Chamber of Commerce, Oberhelman addressed comments made in various forums since a March 21 letter intended to remain private, from Oberhelman to Illinois Gov. Pat Quinn, was leaked to the media. It was a letter critical of the state’s business climate, and of recent changes such as increases in the personal and corporate income tax rates.

Part of the letter read: “I want to stay here. But as the leader of this business, I have to do what’s right for Caterpillar when making decisions about where to invest.” Oberhelman confirmed that at least four states, including Nebraska, Texas and South Dakota, recently have made strong overtures to lure CAT away from Illinois.

But in his speech before the national Chamber, he said news reports based on the letter “sensationalized” his critique of the state’s business climate.
“The headlines were sensational – they said things like, ‘CAT leaving Illinois,’ which isn’t what the letter said. I actually said I’m looking forward to finding ways to invest more in Illinois,” Oberhelman said.

The letter already has led to a scheduled meeting with the governor in Peoria this week.

“We always understood the content and intent of Caterpillar’s letter, and appreciate the importance of Mr. Oberhelman reaching out to us,” said Quinn spokesperson Brie Callahan. “We’ve said … the governor welcomes frank and open discussions with the business community.”

In large part because of the tax rate increases, Oberhelman wrote of his concern over non-business friendly changes. “Before, I never really considered living anywhere else and certainly never considered the possibility of Caterpillar relocating. But I have to admit, the policymakers in Springfield seem to make it harder by the day,” he wrote.

CAT, which employs about 23,000 people in Illinois, is in the midst of a strong financial run. Oberhelman has said in recent weeks he wants to keep the company moving in an aggressive fashion.

After a sluggish 2009, the company posted earnings of $4.15 per share on total revenue of about $42.6 billion during 2010.

Projections remain strong for the current year, pegged at $6 a share on expected revenue of about $50 billion. Oberhelman said last month the goal for 2012 remains $55 billion-$60 billion in revenue, with earnings approaching $10 a share.

The CEO also announced plans to invest $5 billion in the next four years toward machine production expansion, including plant upgrades in Texas, Arkansas and North Carolina. The bulk of the investment will go toward expansions in Asia, where Oberhelman said the company plans to grow machine units sold to about 180,000 in 2015, from 68,000 this year.

Caterpillar is the top manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. At the end of last week, its stock traded at $113.30 per share.

Oberhelman spoke last week about good signs he’s seeing for CAT’s future.
“The good news is that we have been seeing bright spots everywhere and we feel good about our future,” he said. “We’ve invested in new businesses and facilities right here in the United States and around the world. In fact, last year our workforce in the United States grew by almost 8,000 Americans.”