Amazon HQ2 thread

[the urban politician]

^ A lot of people are going to be talking to Bezos, though. Just because you talk to him and, after hanging up the phone he does NOT immediately choose your city, doesn't mean you are "out of the running". What a really silly conclusion. This is a huge decision and will take some time.

[lio45]

Originally Posted by brian_b

I think it will be a site east of the Mississippi River (I guess St. Louis can also be included).

(...)

I think Pittsburgh, Philadelphia, Detroit, Columbus and Dallas are the most likely locations.

Dallas isn't on the side of the river that you think it is

[austlar1]

Originally Posted by jubguy3

Speculation doesn't mean much to Amazon. If i'm going to play tit for tat... 1/7th of the flash memory produced in the world is produced in Lehi, UT. Where is our flight? It would be incredibly hard for Austin to support a transpacific flight because its not a hub operation. Both Phoenix and Miami lack transpacific flights... and low cost carriers in Asia don't really operate the same way that we see Condor, WOW, Icelandic, etc. operate. Austin would have to be connecting on one end only and I don't really think Austin has the total capacity to Asia per day to support a transpacific flight. The fact that smaller airports are picking up transatlantic flights is a new occurrence, let alone a TPAC flight...

I don't necessarily disagree with you. The speculation comes from other Austin SSP forum members. People with "inside information" seem to think that Japan Airlines might introduce a flight to their Tokyo hub. I don't know the amount of Asian traffic originating here on a daily basis, but there is probably more business travel between Austin and Asia than between Phoenix or Miami and Asia. Just about all of the tech players have substantial operations here nowadays. I was doubtful that Austin would support the BA London flight. I was quickly proven wrong. I thought the Condor Frankfurt flight would tank. It is going from 3x a week to daily, or maybe it already has. Now this Norwegian Air flight is starting soon. Austin continues to amaze me with the rapid transformation it has made in the past 20 years since I moved here. The second Amazon HQ could work here easily, but I think Dallas/FW area (or Pittsburgh) might have a better shot at it. I am just hoping that the Whole Foods HQ will remain here.

[mhays]

Originally Posted by brian_b

LOL, I'm fairly certain that if Bezos and Emmanuel have had multiple discussions about this and then Amazon goes and announces a selection process, Chicago is not in the running.

It would be very odd if you were right. The benefits to a competition are substantial and obvious.

[ardecila]

^ Or, if Bezos and Emanuel already had discussions, then maybe Bezos was looking to give Chicago advance time to prepare a package before the public announcement, so as to put his thumb on the scales. Or maybe Rahm already made an offer to Bezos that wasn't good enough, and the competition is a way to shop around and ratchet up the pressure for a better offer.

Lots of ways to read the tea leaves here, but that's literally all this is.

Also, the fact that Bezos and Emanuel had discussions before this announcement doesn't rule out the possibility that Bezos also met privately with leaders from other cities/states.

[azliam]

Originally Posted by austlar1

I don't necessarily disagree with you. The speculation comes from other Austin SSP forum members. People with "inside information" seem to think that Japan Airlines might introduce a flight to their Tokyo hub. I don't know the amount of Asian traffic originating here on a daily basis, but there is probably more business travel between Austin and Asia than between Phoenix or Miami and Asia. Just about all of the tech players have substantial operations here nowadays. I was doubtful that Austin would support the BA London flight. I was quickly proven wrong. I thought the Condor Frankfurt flight would tank. It is going from 3x a week to daily, or maybe it already has. Now this Norwegian Air flight is starting soon. Austin continues to amaze me with the rapid transformation it has made in the past 20 years since I moved here. The second Amazon HQ could work here easily, but I think Dallas/FW area (or Pittsburgh) might have a better shot at it. I am just hoping that the Whole Foods HQ will remain here.

I'd like to see some stats verifying that. In any case and as a former resident, I know some current Austin residents who have real "inside information" on the fact that Austin has sold its soul in favor of becoming another tech monoculture. Is that really a path the city chooses to remain on?

[jubguy3]

Originally Posted by austlar1

I don't necessarily disagree with you. The speculation comes from other Austin SSP forum members. People with "inside information" seem to think that Japan Airlines might introduce a flight to their Tokyo hub. I don't know the amount of Asian traffic originating here on a daily basis, but there is probably more business travel between Austin and Asia than between Phoenix or Miami and Asia. Just about all of the tech players have substantial operations here nowadays. I was doubtful that Austin would support the BA London flight. I was quickly proven wrong. I thought the Condor Frankfurt flight would tank. It is going from 3x a week to daily, or maybe it already has. Now this Norwegian Air flight is starting soon. Austin continues to amaze me with the rapid transformation it has made in the past 20 years since I moved here. The second Amazon HQ could work here easily, but I think Dallas/FW area (or Pittsburgh) might have a better shot at it. I am just hoping that the Whole Foods HQ will remain here.

People think... some speculate... its rumored that...

These are all empty statements. I'm going to bring up some data from a couple airliners.net forums:

http://www.airliners.net/forum/viewtopic.php?f=3&t=1357215

http://www.airliners.net/forum/viewtopic.php?f=3&t=1370693

AUS was at 220 PDEW to asia. This is not enough to support a 787 to Asia every day, especially assuming that *every single person* would have to use that flight to reach asia, ALL on the same alliance (which is often not the case because its frequently a little bit cheaper to connect in the west coast, and because AUS is split between different alliances). AUS has another problem... there is almost no connecting capability in AUS, even if you consider Delta. Why would JAL want to launch AUS when there is very little oneworld connecting capability (especially considering DFW)? Why would a star alliance carrier launch AUS when they have enough to fly through IAH? SkyTeam is never going to launch AUS because its a matter of competing between MSP and SLC with nearly the same amount of PDEW that supply DL connecting opportunities... I'm sorry, but its still a new phenomenon that smaller airports like AUS, BNA, STL, etc are getting transatlantic flights. There simply has to be a much larger demand to support a transpacific flight - there's going to be absolutely no connecting opportunity in AUS for any alliance. Could SEA support even half of the transpacific flights that they have right now? No, its connecting PAX that play a role here on long-haul flights. AUS is simply not geographically situated for a transpacific flight considering the lower amount of PAX that it has right now. This is why cities like miami and phoenix don't have transpacific flights; because TPAC flights usually fly in from the northeast, cities with little to no land to the southwest (and yes i understand that mexico exists in phoenix's case, most mexicans use LAX or MEX) can't really prop up the demand for a TPAC flight with originating traffic alone. Miami and PHX still don't have TPAC flights of their own because even though the demand is twice as high in miami per passengers each way - there simply isn't enough demand to support -one- flight. AUS is growing and it has a capable international airport but if you're using non-evidenced based speculation about a transpacific flight to justify why AUS should be the next amazon HQ, i'm not going to buy it. I don't understand why you would say that when AUS has such an incredibly strong argument as it is right now (whole foods headquarters, booming tech industry, etc) with clearly incorrect speculation about a transpacific flight.

[denizen467]

There's a possible criterion that I haven't seen mentioned yet. Amazon is highly secretive, and while every cutting edge company has secrets, Amazon is rare in that it's not limited just to software, or to AI, or to hardware, or to logistics, or to retailing, or to marketing, or to content, etc.; instead, Amazon puts itself at the cutting edge of all of those, and also frequently pops up at the cutting edge of entirely unforeseen fields. Out of nowhere, they became a huge cloud services provider. Out of nowhere, they became a huge film and tv producer. Out of almost nowhere, they are working on drone software and hardware, which then ties into mapping; driverless delivery trucks, probably electric ones, are a natural extension. Next thing you know they could acquire, say, a pharmaceuticals company, and start selling generic drugs inexpensively. There are no limits it seems.

While NY would be a great choice from many standpoints (excluding cost of living), I think it could be too incestuous for Amazon to be able to keep a lid on its inner workings; too many opportunities to jump employers, including to more "desirable" employers and/or including to competitors, and on top of that, it's the journalist capital of the country. It's just not enough to rely on the protection of NDAs and non-compete agreements. I think they may value a little bit of isolation -- and primacy as the most desirable employer in the city for most of their job positions, where their employees don't always have an eye on some more attractive offer across the street -- closer to what they have long enjoyed in Seattle.

I think this would be less of a problem down in Philadelphia, which sounds like a great choice generally. In Chicago, Amazon would be the big dog in most of its fields; it would enjoy isolation and primacy as an employer. The same benefits apply to many of the smaller cities. Of course at some point the "isolation" benefit gets outweighed by difficulty convincing employees to relocate, but the bigger cities mentioned so far shouldn't have that problem.

Then, of course, you've got two other massive considerations. Access to legal and financial services, and access to frequent direct flights to major cities. If this HQ2 is going to need serious international connections -- to cities of the world they can't even predict right now -- it should be easy to narrow down the list significantly.

[ssiguy]

I'm Canadian so I admit to having a bit of a bias but that said, I think many of you are not taking seriously Toronto's chances. Amazon said another NA headquarters so if they were just thinking US they would have said American headquarters. Obviously they think a Canadian city is viable and Toronto seems to check a lot of the boxes.

Very low crime, highly educated workforce, much lower corporate taxes than any US city, great urban transport with a direct downtown to airport rail line, excellent universities, Eastern time zone, a massive amount of developable downtown land, the fastest growing high tech workforce in NA, excellent road, rail, and international connections, one of the world's largest banking & financial centres, and a very high quality of life that would be very enticing to get their international workforce from.

All of Canada also offers a 25% discount due to the CDN$ over their US rivals and Canada's much more welcoming immigration system makes getting foreign workers much easier as opposed to the US which seems to be gong in the other direction. Hell, Geekwire just put out it's list of the top 6 choices in NA and Toronto tops the list.

I am not saying Toronto will get it but I am shocked how many Americans here think a US location is a given.

[Pedestrian]

Originally Posted by Kngkyle

Amazon is shockingly unprofitable (or barely profitable) because they choose to be. They have prioritized innovation and growth over profits. When a company decides to rest on their laurels and maximize profits at the expense of innovation and growth is when it's time to short their stock. That 13.2% "Cash Used In Investing" didn't have to happen if they didn't want to. They could be extremely profitable by basically tomorrow if they wanted to cut off their nose to spite their face. The company I work for (Spotify) is basically in the same boat, albeit a much smaller one.

Well, of course, most of this is precisely what I said (to which you are responding) so what's your point?

As for shorting the stocks of mature companies engaged in maximizing profits, I'll leave that up to you. Seems a dubious strategy to me but I've only been investing for 45 years.

[subterranean]

Originally Posted by brian_b

I have a friend with very specialized skills that Amazon tried to hire away. They ended up offering to double her already quite substantial salary and she wouldn't move away from her extended family.

Amazon’s salary cap is $160,000.

[denizen467]

Originally Posted by ssiguy

I am not saying Toronto will get it but I am shocked how many Americans here think a US location is a given.

I thought of Toronto right away. But there are big problems. One is ability to relocate candidates from the US; you cannot staff this new HQ without drawing on the talent pool of the US to fill a substantial fraction of the workforce; just think of all the graduate students they would want to attract. Another problem is daily business trips to various US cities by the workforce; crossing the international border introduces uncertainty and delay, and you've got the concern of juggling two currencies. (Obviously, Londoners visiting the Continent for business is a counterexample, but it's not entirely analogous.) Finally, people in this new HQ are going to need to have their finger on the pulse of the US culturally, politically, legally, etc. Considering how intimately Amazon is interweaving itself into daily life and urban living, more deeply with each passing year, I think working in Toronto, and watching mainly hockey and following provincial parliamentary politics, etc., etc., would put people slightly out of touch with life in the US. (As another example, IIRC, Canadian TV stations by law are required to broadcast Canada-produced shows up to some large percentage of the day.) In sum, if we were talking about a turbine manufacturer, a drone developer, a gaming company, or some other single-line business, Toronto would be fine, but Amazon is too wide ranging an enterprise for Canada to work as their HQ for what largely is a USA market. Placing one of their divisions there might work though. P.S. Please get Blackberry back into shape, their decline does not make you look good, and pointing to Stevie's/Timmy's vanity spaceship in Cupertino is no excuse.

[10023]

Let the games begin...

I think this sort of thing suits Chicago well. Huge airport, lots of talent, low costs.

[10023]

Originally Posted by subterranean

Amazon’s salary cap is $160,000.

There is no way that this is the case.

[subterranean]

Originally Posted by 10023

There is no way that this is the case.

Oh is that right?

[denizen467]

^ Three years is an eternity in Amazon years (that's how old that article is). More to the point, your reference to "salary cap" was highly misleading since there is stock on top of salary. Keep in mind the Quartz article didn't refer to stock options, but actual stock. Even if with a lockup period, it's a growing public company.

[subterranean]

My best friend works at Amazon and the cap is still the same. In fact, he was just in Detroit checking out the new digs this week. They are good with sign on bonuses, but pretty cheap with the stock.

[denizen467]

^ Well if they're making an HQ2 that actually has more workers than Seattle, this policy could well change. In any event they'll pay what needs to be paid; I think this is not central to the location topic, especially if we agree they're probably going to avoid high cost locales like NY and SF.

[subterranean]

True, but I was just calling out the comment originally referenced.

Honestly, I just wonder if they’re trying to pull a Boeing. Maybe Bezos is trying to steal Paul Allen/Vulcan’s idea to move the Seattle Harbor to Tacoma and develop it with tax incentives. The only room left in South Lake Union is a strip Club, and they ain’t selling.

[mousquet]

Well, the chosen city will be lucky anyway. Beyond Amazon's jobs, their strong presence should support a whole ecosystem of average- and small-sized IT businesses. That's where significant growth definitely is.

Amazon itself is already established all over the world. It seems it's been somewhat harder for such giant corporations to keep growing significantly, aside mergers which are mostly financial operations. Faster and bigger growth is in the network of small businesses that feed on them all around. Airbus in Toulouse comes to my mind. The same phenomenon must be perceived in Detroit with their automaker industry. And if you take a look at Germany's healthy economy, you realize that it's widely, maybe even mostly based on a giant fabric of small and average businesses.