Caterpillar (CAT) CEO May Move Out of Illinois' Hostile Business Environment

The heavy taxes of Illinois, which were recently increased and signed into law by Democrat Pat Quinn, the governor of the state, may be the last straw for Caterpillar (NYSE:CAT) chairman and CEO Doug Oberhelman, who sent a letter to the governor saying he may pull the company out of the state.

Oberhelman wrote in the letter, "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. The direction that this state is headed in is not favorable to business and I'd like to work with you to change that."

"I have been called, 'cornered' in meetings and 'wined and dined' -- the heat is on," Oberhelman said. "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."

Oberhelman said at least four other states have approached him about relocating to their states after the tax increase.

Other concerns in the state is that if Caterpillar is being wooed, how many others are as well.

Caterpillar closed Friday at $109.09, up $0.72, or 0.66 percent.

Caterpillar (CAT) Reinforces Long-Term Profit Outlook

Caterpillar (NYSE:CAT) CEO Doug Oberhelman affirmed his outlook for the company for 2011, adding he also sees strong demand for company products for years into the future.

Oberhelman said, "With the opportunities we see around the world, we have a very bright future. We also have a strong financial position and a strategy that focuses on helping our customers win."

Mining equipment division head Steve Wunning added at the ConExpo-ConAgg trade show for the construction industry in Las Vegas, that he believes Caterpillar is in as good as a business as you can be in at this time, citing demographic trends; noting population growth and the need for additional infrastructure as a result.

Caterpillar executives said the company's success over the next several years will be determined by its ability to develop enough capacity in order to meet growing demand, while at the same time efficiently managing costs.

The company has two new plants they're planning to build in the U.S., with plans to expand at several other ones.

Projection by Caterpillar for 2011 profit are for close to $6 a share on over $50 billion in sales. They are in line to meet its goals for 2012 of $8 to $10 a share in profits on revenue of $55 billion to $60 billion.

Caterpillar closed Wednesday at $106.76, down $0.03, or 0.03 percent.