McDonald’s Corp. is moving its innovation center and about 100 jobs into central Chicago — a big bet on the city that comes as other high-profile companies flee the area’s high taxes and crime.
(Bloomberg) — McDonald’s Corp. is moving its innovation center and about 100 jobs into central Chicago — a big bet on the city that comes as other high-profile companies flee the area’s high taxes and crime.
The world’s biggest restaurant company by sales said it’s relocating the workers from Romeoville, a Chicago suburb, to the company’s headquarters in the city. The unit, which will be called Speedee labs, will focus on improving customers’ experience and solving operational problems. The company said the move shows its commitment to the city.
“We are betting on Chicago in the long term because we think it makes good business sense,” McDonald’s Chief Executive Officer Chris Kempczinski, said at an event Wednesday hosted by the Economic Club of Chicago.
The move to bring more workers to the third-largest city in the US follows announced departures from Boeing Inc. and billionaire Ken Griffin’s hedge fund, Citadel. Chicago’s appeal has been eroded by high taxes, an indebted government and systemic segregation that has contributed to crime.
McDonald’s relocated its headquarters from the suburbs to downtown Chicago in the Fulton Market neighborhood in 2018. The building that houses the Golden Arches offices now is next door to trendy restaurants, bars and expensive condominiums.
Even so, the fast-food operator said its support of Chicago isn’t unconditional. Kempczinski called on Chicago to tackle crime while improving its business environment and infrastructure such as roads, railways and schools.
“It’s becoming increasingly difficult to operate a global business out of Chicago and Illinois,” he said. Part of the challenge, he added, is getting top executives to relocate to the city. He estimated McDonald’s contributes about $2 billion of annual revenue to Chicago’s coffers.
“There is a general sense out there that our city is in crisis,” Kempczinski said.
Chicago had five times more killings per resident than New York last year, with 797 homicides. That’s the most since 1995, and a 60% jump from before the pandemic. Overall, crime has risen 38% this year. While murders so far in 2022 are down 15% from a year ago, overall crime in the district that includes the Loop jumped 89% this year.
McDonald’s has vowed to increase diversity in its US supply chain while bringing in more women and minority franchisees. Still, it faces criticism from a group of Black restaurant owners who say the company needs to do more to help existing minority franchisees confronting systemic barriers to success. Investors have also demanded an independent civil-rights audit, going against the company’s recommendation.
Kempczinski said the company’s average US starting wages have risen significantly, and are now about $12 to $13 an hour. The company has long been targeted by activists who say it fails to pay its workers a living wage.
McDonald’s expects a challenging 2023, with the US experiencing a minor recession and Europe seeing a more significant one, Kempczinski said. Energy costs needed to run a restaurant in Europe are doubling or even tripling in some cases, he said.
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