Amazon’s plan reminiscent of Boeing’s Chicago move | Brunell

Last year, Seattle Times aerospace reporter Dominic Gates wrote about the similarities and differences between Boeing’s corporate office move to Chicago and Amazon’s plan for a second headquarters.

Boeing wanted to leave Seattle in an effort to separate its corporate leadership from manufacturing sites while Amazon, with an unusual strategy, plans to keep its headquarters here but set up a parallel operation elsewhere.

Boeing hoped to find a more conservative business climate while Amazon wants a city which is a “cultural fit.”

Gates reported that in March 2001, Boeing shocked Gov. Gary Locke and Seattle Mayor Paul Schell announcing its headquarters since 1916 would leave Seattle and named Chicago, Dallas and Denver as the leading destinations. CEO Phil Condit invited each city to submit proposals.

Chicago won after Illinois agreed to provide Boeing with up to $41 million in tax breaks and various state grants over 20 years. The city offered an additional $19 million in property-tax relief over a similar period and a $2 million grant.

Chicago also promised to establish a downtown heliport that could shuttle executives to and from the central city and contributed $1 million to retire the lease of the existing tenant in the space that Boeing now occupies. Chicago’s proposal was that detailed.

Amazon publicly announced its desire for a second headquarters. The world’s leading online retailer estimates what is called “Amazon HQ2” is worth $5 billion and will bring with it 50,000 jobs.

The company accepted bids from metropolitan areas with good roads, high quality education, mass transit, and, a business-friendly environment. However, the decision may hinge on which city, state or, in the case of Canada, federal government has the richest package of incentives.

New Jersey Gov. Chris Christie proposed $7 billion in potential credits against state and city taxes if Amazon located in Newark and sticks to its hiring commitment. Georgia is offering $1 billion and California, Florida and Colorado have $100 million plus packages. Many cities submitted multi-million dollar bids as well.

Who would pass on a “$5 billion, 50,000 jobs” deal? Not many, but San Antonio officials sent an open letter to Amazon CEO Jeff Bezos saying it is not entering the bidding war. “Blindly giving away the farm isn’t our style.”

While tax breaks are part of most corporations’ DNA these days, Amazon has taken the them to a new level. It assembled a group of highly talented and experienced people who actively work for taxpayer incentives in areas it plans to locate.

“Since its beginnings as an online bookseller in 1994, Amazon has had a savvy approach to taxes, collecting no sales tax for many purchases until recent years, and now pitting governments against each other to win tax breaks,” Reuters recently reported.

Unfortunately, as distasteful as these public incentives are, they entice companies to cities, states and other countries. The best remedy to counter them is to focus on improving the business climate so corporate leaders won’t look elsewhere.

In 1991, Boeing CEO Frank Shrontz warned that unless our state’s business climate improved, the Puget Sound region could become “an aerospace rust belt in the 21st century complete with padlocked factories, unemployment lines and urban blight.”

While Amazon has not been as open in its criticism of Washington and Seattle’s taxes and regulations, it wants a city that has lower operating costs.

Boeing, Amazon and other Washington companies are coveted by other states and countries. The key to keeping them here is to have reasonable regulations and taxes, good education and transportation, safe streets and a high-quality environment; and, a place where people can afford to live.

Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist. He lives in Vancouver and can be contacted at TheBrunells@ msn.com.


Talk to us

Please share your story tips by emailing editor@kentreporter.com.

To share your opinion for publication, submit a letter through our website https://www.kentreporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in Opinion

Back to the wild — a whole new outdoor recreation world | Guest editorial

When enjoying the great outdoors, continue to socially distance and be aware of how else COVID-19 has changed our world.

KCLS is stepping up its commitment to patrons

KCLS has expanding its online resources so patrons can continue to learn, build skills, stay entertained and remain mentally and physically active amid the pandemic.

How using a face mask to cover my Asian face could put me in danger

Since the COVID-19 outbreak began, Asians and Asian Americans have been targeted.

Opinion: Public deserves honest information on sex education

The Washington comprehensive sex education bill passed in the Senate on March 7.

Grocery store staff are working hard to keep the shelves stocked during the COVID-19 pandemic. File photo
Thank you grocery store clerks

Recognizing the sacrifices of our unsung essential workforce.

Helping community organizations as we respond to the coronavirus

Now, more than ever, nonprofits need gifts of time and money

TP shortage is tip of iceberg

Whether it be supplies of daily necessities, medicines or protective clothing, we need to have to patience, understanding and a desire to work together.

To our elected officials: Be bold, be consistent, be honest, be helpful

By Patrick Grubb, Washington Newspaper Publishers Association Governor Jay Inslee has been… Continue reading

Coronavirus testing telecommuting effectiveness

Employers offering a work from home option has grown by 40 percent in the past 5 years

Legislative session ends with plenty of hits and misses

OLYMPIA — The 2020 regular legislative session is coming to a close.… Continue reading

As the deadline nears, state lawmakers face a few challenges

As state lawmakers in Olympia enter the final turn of the 2020… Continue reading

Brunell’s treatise on Lower Snake River dams is flooded with falsehoods

Don Brunell’s recent column, “Dams are the Northwest’s Flood Busters” (Jan. 24,… Continue reading