By David Sher
I’ve been active in our Birmingham business community most of my adult life and I’ve never seen Jeff Bezos, the third richest man in the world, and the founder of Amazon.
I’ve not seen him in downtown Birmingham, in Vestavia Hills, or in any of our suburbs.
I’ve not seen him at local non-profit or economic development board meetings.
As far as I know, he’s never personally contributed to or led fundraising campaigns for our local United Way or UAB.
In fact, it wouldn’t surprise me if Mr. Bezos doesn’t know where Birmingham is located.
Business Alabama (BA) magazine publishes a section each month to spotlight an Alabama county.
Last month BA highlighted Jefferson County companies—and it was a real eye-opener—particularly the section titled, “Largest Industrial Employers.”
Here’s the Business Alabama list of Jefferson County’s 12 largest industrial employers ranked by number of employees:
- Amazon 5,000
- American Cast Iron Pipe 1,500
- Kamtek 970
- United States Pipe and Foundry 970
- Buffalo Rock 800
- U.S. Steel 750
- Drummond 730
- Altec 635
- Amerex 625
- McWane 625
- Coca-Cola Bottling Company 607
- Blox 500
Amazon dominates the list with more employees than the next five companies added together.
That’s great for the 5,000 Amazon employees, but as I wrote in a ComebackTown column five years ago, “Did we win the Amazon booby prize?,” we gave incentives for many jobs we would have likely gotten anyway.
At the time of the ComebackTown column Birmingham was the largest metro in the U.S. without an Amazon Distribution Center.
Amazon has well over 1,000 fulfillment centers in the U.S. Did anyone actually think that Amazon was going to skip Alabama?
Alabama, Jefferson County, and Bessemer gave Amazon $51 million in incentives to open its first fulfillment center in Bessemer.
According to the BBJ government entities in other states gave less incentives for similar Amazon fulfillment centers: Sacramento, CA $1.7 million; Salt Lake City, UT $5.6 million; Opa-locka, FL $6.5 million; and Houston, TX $7 million.
Was it worth the $51 million we spent?
Instead of having a local company with a CEO or owner heavily invested in our community we have an absentee owner, headquartered thousands of miles away who cares nothing about us and whose company’s profits leave our state.
This fits well with Birmingham’s business history. Tennessee Iron and Coal (TCI) was for many years Birmingham’s biggest employer. TCI was owned by U.S. Steel in Pittsburgh whose priority was Pittsburgh, not Birmingham.
I watch with great appreciation the number of local CEO’s who give their leadership, time and money to our local charities and non-profits.
Our Birmingham region always depended heavily on local CEO’s and business leaders and their companies that are no longer here.
We used to have our own local ‘phone’ company. (BellSouth). Now we have no dominant local phone company.
We had our own local ‘gas’ company (Alagasco)—not any more.
There were four major banks headquartered here: SouthTrust, Alabama National BanCorp, AmSouth, and Compass. Now we only have Regions.
We had companies like Parisian, Protective Life, Golden Enterprises, and Torchmark.
These local companies and many others moved, merged or were acquired.
Birmingham must find a way to find and grow companies, both large and small, that are headquartered here.
We concentrate on incentives for start-ups hoping they’ll be the next Amazon or Google—which seems reasonable.
But instead of trying to throw money at large-out-of-state companies, we should consider incentivizing successful companies already headquartered here.
Local CEO’s and their management teams have strong connections to Birmingham, care about our community, and are willing to invest their time and money here. (For instance the Executive Committee of United Way of Central Alabama; the vast majority represent local companies).
We should incentive companies whose owners and top management are personally invested in out community–and that certainly is not Amazon and its Founder, Jeff Bezos.
David Sher is the founder and publisher of ComebackTown. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
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