A Portland, Ore.-based steelmaker seeking quicker access to its far-flung customers announced this afternoon that it will move its headquarters to the Aon Center in late June.
Evraz Inc. NA, the North American subsidiary of Russian steel behemoth Evraz Group, expects to employ more than 70 workers on the 78th floor, including an as-yet-undetermined number of Portland transplants.
The announcement comes shortly after Illinois hiked its corporate and individual income tax rates, a dramatic step that triggered a hue and cry that businesses will exit or avoid moving here. The founder of Champaign-based Jimmy John’s Gourmet Sandwiches, for instance, this week told the Champaign News-Gazette that he’s considering moving the corporate headquarters out of state.
But Mike Rehwinkel, Evraz NA president and CEO, said the tax increases, while hardly a welcome turn of events, did not influence the company’s relocation decision.
The key factor, he said, was getting easier, less expensive air travel out of O’Hare and Midway airports to customers with offices dotted around North America, from Dallas and Houston to Calgary and Montreal.
“As much as people say they don’t like those airports, we love them,” he said. “We can reach all our customers, all our mills and into Europe when we need to.”
Being able to reach a customer in a day trip should translate into more revenue, he said, noting that often is not possible when flying out of Portland.
Illinois lured the firm with about $3 million in incentives, which include tax credits spread over 13 years and a one-time training grant of $50,000. The company, which had weighed offers from other locations, among them Denver and Wilmington, Del., is expected to invest $9.7 million here over 13 years.
Evraz Group, the Russian steel giant partly owned by oligarch Roman Abramovich, assembled the North American subsidiary through three acquisitions over the past several years, starting in 2006 with the $2.3 billion purchase of Oregon Steel, a rail and steel plate producer.
Evraz NA also makes large-diameter pipes for energy companies and armor plate for the military, among other products.
Like the rest of the steel industry, the Portland firm experienced a dramatic downturn in 2009, with mill utilization falling between 75 percent and 78 percent and the work force dropping to 3,365 employees from 4,710 employees in 2008.
Plant utilization is back up to 90 percent, Rehwinkel said, and the work force is close to 4,000. He hopes to rebuild the employee base to the 4,700 level by end of the year or early next year.
A wholly owned subsidiary of Evraz Group, the North American firm does not disclose earnings, Rehwinkel said. Its annual revenues are about $4 billion a year.
kbergen@tribune.com
Damn, this is really bad news….
Just goes to show you that there are myriad reasons a company located where they do. Taxes are not the be all end all. But still $3 million in inventives???? Not sure what their plans are, but $9.7 million to fit our one floor of an office building for 70 workers seems pretty excessive.
More office jobs like this in the Chicago central business district (where mass transit is viable) rather than contributing to suburban sprawl (see article on traffic delays today) is welcome news. However the tax increase advocates should not get gleeful and read too much into this announcement so as to justify their gouging of the public’s earned income. Evraz’s relocation was heavily influenced by that give away package. Note that “Illinois” paid zero to lure the firm … that $3 million in tax credit and training incentives came out of OUR pockets.
See there, Indiana and Wisconsin? You’re not the only ones that can poach jobs and headquartes from other states? And there are several reasons why a company would rather be headquartered in Chicago/Illinois even if they have to pay more taxes. No one likes to pay taxes but people and companies want their emenities and Chicago offers world class emenities that can’t be matched by any of these so called low tax places.
Easy, folks. Let’s wait and see about the $9.7 million “investment” in the “area.” The article fails to mention what, if any, assets are within its portfolio. That is a hell of a figure for office workers leasing a single floor.
Irony smacks us in the face again. A Russian firm making armor plate for our military. Kind of like the “Made in China” tags on our flags these days….
You got to look at the big picture. If you read the article this plate is being made by employees in the USA. You can’t knock a foreign investor for keeping jobs in the US …or would you prefer a US company making the product in China?
9.7 Million over 13 years isn’t much for a company. That their RENT at AON Center?