By Derrick Blakley

CHICAGO (CBS) — Caterpillar moving its corporate headquarters out of Peoria to Chicago is a tremendous blow to the town where the giant manufacturer was born.

In many ways, Caterpillar Inc. is the very heart of Peoria. But as the company became a worldwide manufacturing power, it’s headquarters location became an increasing liability for its globe-trotting executives.

“The ability as our city to get anywhere in the world for a company like Caterpillar, anywhere in the U.S., is a tremendous economic advantage for us,” said Mayor Rahm Emanuel.

But most Caterpillar employees already in Peoria will stay put.

“We will maintain a significant presence in the Peoria area, said Caterpillar Spokesman Rachel Potts. “Those more than 12,000 people here today will likely by and large not be relocating.”

Still, a new headquarters building, announced just two years ago, and planned for downtown Peoria, won’t be built, which may come as a stinging blow to Peoria’s pride.

“I think its a tragedy for Peoria and the end of an amazing era,” said John Tillman, from the Illinois Policy Institute.

However, the Chicago area lands what might be Illinois’ best-known company around the world.

Its bright yellow tractors helped build the golden gate bridge, as well as roads around the globe from Mexico to India.

It remains to be seen where exactly Caterpillar’s executives intend to set up shop.

“We’re going to talk to them about what their plans ares, but know already today, over the last year, Caterpillar his moved people into the Merchandise Mart for the city of Chicago,” Mayor Emanuel said.

The construction machinery and equipment company hasn’t indicated whether its moving to Chicago or to the suburbs. In either case, the headquarters move is expected to be completed by the end of the year.