Friday, September 8, 2017

Company's Towns

I have long written about the concept and history of a company town and its long term affects on a community's infrastructure, the economics of the municipality on the residents be they employees of said business directly or indirectly through other service providers as well as those who reside and in turn live, educate and work in services that serve the community at large, that large part is that of the company of course.

Detroit, Motown, the Motor City. Michigan and Detroit in particular became the center of the auto industry at the beginning of the twentieth century due to a number of factors. Steel, the Great Lakes shipping industries, and a large and growing workforce all contributed. Perhaps the most striking force though was the unique collection of inventors, dreamers, and designers that made the Detroit area their home. Ransom E. Olds, Henry Ford, the Dodge brothers, David Dunbar Buick, Walter P. Chrysler, and even the French explorer who founded Detroit, Antoine de la Mothe Cadillac, all are household names today, not because of any outstanding achievement, although there were many, but because the cars which they produced or which bear their names are a part of the fabric of everyday American life.

The Big 3 auto makers, General Motors, Ford and Chrysler were all formed and headquartered in Detroit by 1924 and by the end of WWII the economic growth was immense and in turn built this city on soul and on wheels. And that fueled the American Dream and it was a part of the legacy of steel towns like Pittsburg and Cleveland. Rochester New York had Kodak and in turn like all dreams we eventually wake up.

Cycles of business, modernization, outsourcing, global trade and competition all affect the business cycle and in turn some boom and some bust. We saw this in 2008 when the banking crisis brought the world to its knees of which now we are emerging 8 years later and may be flat on our back with the current occupant in the White House. It cannot be said that it is perfect irony that the worst Hurricane season in history is happening under his watch. We all better take shelter. For his cohorts that would be a tax shelter we get cots at the local school.

Amazon announced they were seeking a second home as all wealthy do usually on remote fabulous tropical islands. I hear Barbudus is up for sale and is going cheap! But what is interesting is that it is being presented as a second home an unheard of concept in business. Well if there is one thing Bezos does is be unconventional. What Amazon started as and what it is today is a bizarre tangle of business that now include media as in the Washington Post and in film and television production, then we have a streaming service for said productions akin to Netflix, they own Society 6 a type of Etsy, and of course the recent purchase of Whole Foods a grocery outlet. There are actual brick and mortar stores to being opened for both books and food so next week I am sure if Boeing went up for sale it might be a fine addition to the collection.

Seattle has always been a company town of some sort, usually blue collar and union oriented. The working class man who was middle class, white, largely urban as Seattle has an extensive neighborhoods with moderate homes and then the suburbs for the elite class. A quality transit system, shaky but okay school one, and of course amazing skylines with a history of philanthropy that built world class museums and institutions that for a city its size is impressive. Add to that the location of Vancouver, Canada just 3 hours by car and its continental diversity and an international port and airport that has connection to Asia make Seattle a jewel in any one's crown.

So to say to Seattle we need a duplicate headquarters in a city just like you is rather like saying to your first wife, I need a woman like younger and with bigger tits. And game is now on. I busted out laughing when I heard Nashville plans to bid on the idea of it and of course across the U.S. right now the varying Chambers are calling out Lobbyists and Politicians to get their hat tossed into the ring.

Much was made of Amazon's big announcement of the job fairs they were going to hire thousands of workers and they had set up sites across the country to recruit and hire them on the spot. Did anyone do any follow up to validate how many were hired and by Amazon themselves and not the third party agency that usually places and hires workers in their distribution center? A profile two years ago in Mother Jones that exposed the truth about working in said places? This came before the brutal piece on Amazon corporate culture in The New York Times in 2015 which led to a vigorous debate on the effects the new money had on the city.

This too led Seattle to find itself struggling with their new corporate partner and now it is the largest company town in America and trust me I know as I lived there. And this article from the Detroit Press a place that knows all to well what happen when the wagons pull out.

Nashville is a company town and by company I do mean the business of hospitality in both tourism and conventions. The huge Bridgestone Arena headquarters being built in the dilapidated downtown core has led to more construction of supposed malls and shops and there is a promise that eventually grocery stores and other service industries largely isolated to the more established residential areas are coming. As is the promise of transit but that is decades away. But the tax structure is largely the same here with no income tax and many incentives for business, such as low wages and a right to work law that almost strangles unions. The reality is the average wage here is lower but the housing prices are almost as high as Seattle with Nashville's cost of living actually exceeding Seattle's growth this past year. Seattle is at 75K and has been now for a few years but the average wage is 65K so there is still needed room to grow as it has pushed out all but the most financially secure from living in City. So if Amazon is looking for that parallel head on over. But no to transit and as far as Education goes let's just say that 1/3 of a workplace possessing a degree and most of that law related or medical, the two bigger hires here, will not transition. And we have well IT and by it I mean the most religious crazies that walk the planet. That and the reality is why would you willingly come here. I can think of many major cities - Denver, Atlanta, Upstate New York even Chicago that can serve a corporate master like Amazon.

The reality is that Amazon set up a fairly sweet corporate spot in Seattle with new buildings and a design imprint that I would doubt they plan on leaving soon. However, the idea of having a backup plan is not a bad idea. As for the 50K jobs number I would like to know specifically what kinds of jobs? These include Construction of new space, maintenance and other secondary tier workers that do not make the fantastic salaries that are quoted in the announcement  And as they do in Silicon Valley many of those again do not work for the company they work for. Amazon is not about to give stock options to the cafeteria lady. And we know that a matter of research can find such information as false as many employees have reported on Glassdoor about how said wages are earned.

So bring it Amazon I think the bidding wars have begun. Imagine Amazon in Oklahoma, Nebraska or Iowa. I don't. So Nashville keep dreaming, you will have a soccer team before Amazon ever moves here.

Amazon’s announcement of HQ outside of Seattle sends ripples through state’s political circles

Amazon is a major economic driver of Seattle, which is also a major economic driver for the state. Is the announcement by the tech giant, to build a second headquarters outside of Seattle, a sign of things to come?

By Daniel Beekman and Joseph O’Sullivan
Seattle Times staff reporters
The Seattle Times
September 7. 2017

Critics of Seattle politics are blaming City Hall for Amazon’s news Thursday that it will build a second headquarters somewhere else.

But some local leaders — still digesting the massive implications and seeking more details — say the South Lake Union-based tech giant can continue to thrive in the Emerald City, in step with their left-wing ways.

“My office will immediately begin conversations with Amazon around their needs with today’s announcement and the company’s long-term plans for Seattle,” Seattle Mayor Ed Murray said in statement Thursday. (Sad the Mayor not running for re-election and tainted by claims of sexual assault by young men whom he cared for 20 years ago)

“And we will coordinate with Governor (Jay) Inslee to convene key business and community leaders to plan for our future growth and response to this announcement. I look forward to working with Amazon to secure their long-term, successful future in the heart of Seattle.”

The news rippled rapidly through Washington’s political circles, leaving some leaders enthused, others worried and still others angry as they wondered aloud about Amazon’s motivations.

A spokeswoman for Inslee said the governor’s office would be in touch with Amazon to learn more and would ask about additional development possibilities in-state.

Murray called Thursday “an exciting day” for Amazon, which has “helped Seattle become an international technology and business hub.”

“It is telling that Amazon is looking for a city in the model of Seattle for its second home,” the mayor said.

The Seattle Metropolitan Chamber of Commerce struck a different tone, suggesting local politics were responsible for the company’s choice.

“It is my sincere hope that today’s announcement will serve as a wake-up call,” Chamber president Maud Daudon said in a statement.

“This means intentionally improving our overall business climate, and changing attitudes about the amazing employers and access to jobs we are fortunate to have here.”

Thursday’s announcement, Daudon said, “should come as no surprise, as the city has continued to implement policies that create an environment that is at best unfriendly, and at worst outright hostile toward the needs of our largest employers.”

But Seattle City Councilmember Tim Burgess said leaders were indeed blindsided.

“I learned about it when I got an alert on my phone from a news organization and I thought, ‘Uh oh. What’s that mean?’ ” Burgess said in an interview. “But they were quick in calling around to elected officials, myself included, to give an explanation.”

The council member said his mind immediately jumped to Boeing’s decision to move its headquarters out of Seattle years ago, taking jobs away. But his conversation with an Amazon representative was reassuring, Burgess said.

“They talked about how they have 5,000 to 6,000 open positions in Seattle right now and they intend to fill those,” he said. “I interpret this as them continuing to grow.”

Seattle’s progressive policies, such as its minimum-wage hikes and its new income tax on wealthy households, aren’t driving Amazon away, Burgess said.

“There’s no evidence of that,” he said. “This city is booming economically and the business community is extremely successful here. This city is doing extremely well.”

There’s no doubt Amazon is engaging more in Seattle politics, however, becoming a big time contributor to the Chamber’s political arm for the first time this year, amid mayoral and council races.

With Murray on his way out, the Chamber is supporting former U.S. Attorney Jenny Durkan against planner Cary Moon in the Nov. 7 general election.

Former Mayor Mike McGinn, who failed to advance beyond the Aug. 1 primary in a comeback bid this summer, said the company is part of a business mindset anxious about left-wing activists dominating City Hall and raising taxes on businesses.

“They want a mayor to counteract a more liberal council,” McGinn said

In an interview, Daudon put it this way: “There’s a mounting sense of frustration and concern that the city … just doesn’t get it. They’re not a true partner.”

Pointing her finger in the opposite direction Thursday was Seattle’s socialist council member, Kshama Sawant.

“Amazon’s quest for a second massive corporate base is reminiscent of Boeing’s ongoing efforts to ship jobs out of the Seattle area and hold us hostage,” Sawant said.

And Councilmember Lisa Herbold found a silver lining.

“It gives us a little breathing room to build good mass transit, ensure affordable housing and open up pathways into higher education for the future workforce,” she said.

Moon, the mayoral candidate, said she’s confident Seattle will continue to be a tech-sector leader. But Moon said she wouldn’t give the company goodies to keep it loyal.

“I’m not interested in playing that game if Amazon isn’t serious about helping to pay for the impacts of their rapid growth on our city,” she said.

In a statement, Durkan said Seattle needs to help train more students and workers for the jobs that companies such as Amazon are creating.

“The city must be partner to building career pathways as well as working closely with our employers to make sure our businesses keep Seattle as their home,” she said.

Amazon is a major job creator and taxpayer in Seattle, and what happens in Washington’s largest city impacts the entire state. So Thursday’s news was a conversation starter everywhere.

In a Facebook post, state Rep. J.T. Wilcox, R-Yelm, called it a blow.

“One of the greatest engines for economic growth known to history will be growing somewhere else,” said Wilcox, the state House’s minority floor leader.

“As this plays out over the next few years, I believe there will be wrenching change at City Hall,” Wilcox said.

Susan Hutchison, the Washington State Republican Party leader, offered similar comments, predicting Amazon would invest in a more conservative state, such as Tennessee, Florida or Texas.

But State Sen. Reuven Carlyle, D-Seattle, said Thursday he wasn’t worried about a second headquarters hurting Seattle.

“I expect us to still be, for decades to come, a force for global technology,” he said. “And Amazon is a central anchor of that DNA.”

McGinn, whose 2010 through 2013 term as mayor saw Amazon surge in South Lake Union, said he wonders what exactly is behind the company’s new plan.

“Is this being driven by their business needs or by some desire to have leverage over the city? The answer is probably both,” McGinn said.

In a request for proposals from cities wooing the company, Amazon says it wants a site close to diverse housing options with access to mass transit and bike lanes.

Seattle has been building out its bike and pedestrian infrastructure, and Sound Transit plans to construct a new light-rail line serving South Lake Union.

But for now, the neighborhood is clogged and the entire city, like others capable of attracting talented employees, is struggling with a lack of affordable housing.

A more suburban setting might be cheaper, but that would run counter to a nationwide trend that has seen many companies move jobs back to inner cities, McGinn noted, citing Weyerhaeuser’s relocation from Federal Way to Pioneer Square.

“Is Amazon trying to buck that trend or just find a more-affordable version of Seattle elsewhere in the country?” McGinn said

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