Frustrated Illinois manufacturer flees to Indiana's 'affordable shore' next door
The president of a company that moved from Illinois to Indiana said recently on a Chicago radio talk show that he looks back on Illinois and hopes one day the state will get its act together.
"It's kind of a double-edge sword," Hoist Lifttruck President Vincent Flaska said during a recent edition of "Illinois Rising." "I still live in Illinois, and I want to see Illinois succeed. But the problem that they have is that they need to get rid of how their tax credits function. They're basically the only state that gives tax credits out to retain companies. Indiana does not do that."
There is a lot that Indiana does and doesn't do that Illinois doesn't and does do, enough that Illinois couldn't hold onto his company or the hundreds of jobs that went with it, Flaska said.
"Two different worlds doing business, Indiana vs. Illinois," Flaska said. "Indiana has those reforms. I hope Illinois can get those reforms someday."
Flaska's company, Hoist Lifttruck, manufactures high-capacity lifttrucks, from heavy-duty cushion tire and pneumatic forklifts to container handlers and reach stackers, ranging from 7 to 57 tons, all made in the U.S. However, it's no longer all made in Bedford Park, where it had been since 1998, but has largely moved to East Chicago, Indiana.
What prompted its decision to move was the news in 2014 that Coyote Logistics received a $2.5 million grant from the state of Illinois that allowed it to expand its Logan Square headquarters and hire 500 additional employees, Flaska said.
"When we first looked into incentives, that's what started this whole process," he said. "We said that Coyote Logistics, which hires mostly college kids, young kids, and we're hiring blue-collar workers that have families and invest in the community, you would think that it would make sense that we could receive tax credits as well. Well, that wasn't the case. So when Illinois gave us no offer initially, that's when we decided to consider Indiana, and Indiana came on strong. They sent their secretary of commerce."
Indiana officials worked hard to get Hoist Lifttruck officers to move to "the affordable shore." That impressed the folks at Hoist Lifttruck, Flaska said. "When you look at how Indiana uses incentives for economic development, it's very, very different from what Illinois has done in the past," he said.
Other companies that have left Illinois for either Indiana or Wisconsin include commercial-lighting maker Kenall Manufacturing; dough-processing machine maker AM Manufacturing; and steel firm T&B Tube. Chicago-based Edsal Manufacturing chose to create a 300-employee operation in Gary, Indiana, rather than in Illinois.
The numbers have been outlined in reports developed by the conservative think tank Illinois Policy Institute, outlining the sharp contrast between Illinois and nearby states in terms of economic development and jobs. Michigan has created 170,000 jobs since the bottom of the Great Recession, while government jobs have surpassed manufacturing jobs by 175,000 in Illinois, according to two separate Illinois Policy Institute reports. Illinois has seen zero new private-sector jobs growth so far this century, while Michigan has since retooled its economy, and Illinois has not, according to two other Illinois Policy Institute reports.
Indiana is very attractive for its balanced budget, business-friendly environment, workers' compensation reforms and other features that contrast especially well with Illinois, which is what is attracting many Illinois residents to the Hoosier State, Flaska said.
"Indiana all around is a better state, with workers' comp reform, how the whole entire state government works, where they're not constantly trying to tax companies and find ways to take another dime," he said.