Corporate relocation? Chicago Mercantile Exchange parent now says its HQ may be up for grabs
Wake up and good morning. On Aug. 19 we reported, following Florida Gov. Rick Scott's visit to the St. Petersburg Times, that the governor was trying to woo CME Group -- the company that runs the Chicago Mercantile Exchange -- to leave tax-laden Illinois in favor of tax-light Florida.
Lately, there are new rumblings. Citing Reuters, the Chicago Tribune reported last week that CME on Thursday elevated its threats to leave Illinois, making clear for the first time that it is considering the possibility of moving its corporate headquarters out of state. Executive Chairman Terrence Duffy (photo, right), said he will decide "shortly" whether to keep CME Group headquarters in Chicago. He said other states were trying to attract the company and that he expects to have proposals from those states in hand in two weeks. Companies commonly use the threat of a departure to negotiate tax incentive packages from their hometown state. Here's that Chicago Tribune coverage.
Now comes an online Wall Street Journal story this week, quoting Gov. Scott's spokesman, reporting that Florida and Texas are believed to be the strongest contenders to lure some of the key operations of CME Group, with a total 2,600 employees, from its historical base in Chicago. Says the Journal's Dow Jones story: "It's Scott's impression after meeting with CME leaders that the exchange will likely move a significant number of jobs to either of the two states, (Scott spokesman Lane) Wright said. Scott sent a letter to CME in June promoting Florida's business friendly environment. Texas Governor Rick Perry, now a candidate for the Republican nomination for President, sent similar letters to several Illinois firms, including CME."
CME chief Duffy stated earlier this summer that exchange leaders had visited several states, and had spoken to about nine governors or lieutenant governors during a period of several weeks.
Gov. Scott acknowledged during his visit to the St. Petersburg Times that he has been making corporate recruiting calls, especially to top states like Illinois which is raising corporate taxes, at least temporarily, to help balance a major state budget deficit. But Scott tried to dampen expectations during his visit, suggesting major relocations are rare and, in this difficult economy, are probably even less likely as companies tend to hunker down until things improve.
Still, even the possibility of a CME Group headquarters move is fresh news. CME clearly is pushing a number of states for their best possible incentive package. We'll see where this is heading soon.
-- Robert Trigaux, Business Columnist, St. Petersburg Times