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After a bruising couple of years, companies around the Midwest are planning to expand, rehiring workers and in some casing, adding new ones. But some also have used the recovery as an opportunity to hint that they might move elsewhere. In response, cities, states and local communities have come up with significant financial incentives aimed at convincing these companies to stay put.

Motorola Mobility is getting $100 million from Illinois to keep its headquarters in the state. Photo by Tom Magliery via Flickr.

In Illinois, Motorola Mobility Holdings Inc. is getting $100 million in financial incentives to keep its corporate headquarters in Libertyville. Company officials said they had considered moving the headquarters to more “tech-friendly” locales like the Bay Area or Austin, Texas. Most of that $100 million in incentives comes from tax credits spread out over the next decade. In return, Motorola Mobility is keeping its 3,000 jobs at the Illinois based headquarters and will invest about $600 million over the next tree years on research and development.

Caterpillar Inc. made similar headlines last month when its CEO, Douglas Oberhelman, wrote an open letter to Illinois Governor Pat Quinn. The letter outlined his concerns about the business environment in Illinois and mentioned that he was considered moving the Peoria, IL based company elsewhere. Not long after that letter was published, Oberhelman said he received e-mails, letters, packages, and even a hand delivered request from more than 30 states inviting Caterpillar to move. Shortly after that, Oberhelman met with Quinn, and later announced “Caterpillar is here to stay.”

Still, Oberhelman continues to lobby Quinn to make Illinois more “business-friendly.” Oberhelman argues Illinois needs to offer more incentives to businesses to keep up with ultra business friendly states like Texas. Incidentally, it was Texas who sent the lone hand delivered offer to lure Caterpillar away.

Two years ago, NCR Corp. announced it was moving its headquarters from Dayton, OH to a suburb of Atlanta, GA. Georgia had enticed the world’s top ATM provider through $60 million in incentives. The move was a huge blow to hard-hit Dayton, made only worse by competitor Diebold’s decision to look for a home elsewhere. The ATM and bank security system manufacturer ultimately announced this past April that it would be staying in Ohio, accepting $56 million in tax breaks, grants, and loans from the state. The company said it will use that money to build a new $100 million world headquarters in the Akron area.

It’s costing Ohio a bit more to keep American Greetings Corp. The greeting card maker will be getting $93.5 million in incentives over the next 15 years. Ohio Governor John Kasich even signed the tax reform legislation making the deal possible at the company’s Cleveland area headquarters. It’s still unclear if the company will be moving its headquarters within Ohio.

It  took the help of outside financiers to keep Goodyear Tire & Rubber in the Akron area. Akron, Summit County, and Ohio had been saving up for years to pitch in for the tire makers $160 million new headquarters to help keep it in state. Most of the money for that project ($98 million, to be exact) came from a New York based private-equity firm. That was just a few weeks ago, and construction is already under way. Local officials say this means Goodyear stays, and more jobs for construction workers.

But these sorts of corporate moves aren’t just happening between states. Within Ohio, breakfast restaurant chain Bob Evans Farms Inc. recently decided to move its headquarters from Columbus to New Albany. That move upset Columbus officials, who had offered the company incentives to stay. It also caused Ohio Valley Bank to pull out of Columbus, too. In the Miami Valley alone, Ohio spent more than $1.3 million in state funded tax credits to keep existing jobs.

Around the Midwest, the economic recovery is finally starting to show. Automakers like General Motors, Ford, and Chrysler are announcing that they plan to hire and rehire thousands of autoworkers, bringing employment among the U.S. automakers backnear pre-recession levels. GM also plans to invest $2 billion in 17 of its plants nationwide.

Illinois Gov. Pat Quinn and Ohio’s John Kasich (both Republican) say financial incentives are worth it if it means keeping thousands of jobs in state. They say it’s a critical part of keeping the Midwest on track for a complete economic recovery. But critics of such incentive programs say these aren’t new jobs. They say states like Ohio and Illinois are too broke to afford paying this much just to keep the same jobs and should instead by focusing on creating new jobs.

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What do you think of incentives to keep companies in states and communities? Is it money well spent, or should communities act differently in a time of tight budgets?