Jeff Bezos is not going to save Birmingham

Amazon
Amazon

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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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@amsher.com.

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6 thoughts on “Jeff Bezos is not going to save Birmingham”

  1. Understand your hurt for being “left-out”, but, David, it is what it is! Heavy industrial Jefferson County is no more as the survey showed. And, today, industry leaders can “visit” its local plant and supervisors on line or electronically on big screens from far away. I agree, not the same. But, it’s good to have Amazon employ 5,000 – or
    15,000 – if you add spouses and kids.
    Jeffco has the potential to do better!
    Maybe target other companies – science -medical – aeronautics- for example. It’s up to our recruiters to make it happen. We can do better!

    1. You’re right that those things are better than nothing. But I think we need to think deeply about what our priorities are. We have prioritized development and growth for its own sake. Jefferson County and the State of Alabama give all these handouts to corporations because they assume that if you just have more companies offering jobs, everything will be better. But at some point, you have to ask yourself what kind of society you want. Do you want a society where some people make unlimited amounts of money and others can barely get by?

      This is why I emphasize public transit. It’s an equalizer. If there’s better public transit than we have now, it might not raise the profitability of really big businesses. Amazon and American Cast Iron Pipe might not make any more money. But it will help smaller businesses that need more workers and customers. For example, the UnlessU Scoops ice cream shop that I went to in Vestavia Hills in July. It was very hard to get to by bus. And the bus that goes near there, the no. 31 Galleria, is quite crowded and stressful to ride. If the bus was more frequent, more people could go to that business and maybe work there as well.

      So what I am trying to say is let’s turn our emphasis towards things that bring us together for awhile instead of emphasizing only what makes more money.

  2. David, you’re right on the money with this column– those of us of a certain age have been unhappily watching it happen over the past years. And now Amazon– a disease, if ever there was one.

    Not precisely on this subject but part of the giving-away-the-best-of-Birmingham syndrome. what in Heaven’s name has allowed the wreckage of Rickwood Field? Other than the goggle-eyed response to the romance of having a major league game there? With (I’ve heard) unaffordable tickets? The news reports that the field has been entirely dug up and excavated, and the old dugouts have been destroyed so that bigger ones can be built.
    For one game. Its original character will never be restored.

    Rickwood is a National Historic Landmark. Or it was. It’s the oldest ball park standing in the United States. What in the world is the matter with this City, that it allows itself to be plundered in this way?

  3. This is a classic example of 3rd-World “dependent development.” Always counting on those outside “saviors” to rescue us. When are we ever going to develop from within?

    In the future, if the world economy transformed, Amazon, Mercedes, Hyundai, and others wouldn’t hesitate to shut those huge places down—just like the textile mills did a few decades ago.

    1. Precisely. Considerations must be made for those companies that actually know this region and are more dependent on it for growth. Amazon is a global juggernaut that is largely predatory in its expansion motives. That $50+ million could have been divided amongst the next ten companies on Sher’s list to spur growth because, as he indicated, Amazon was going to eventually make its way here anyway. What caliber of jobs did it bring? More Walmart-esque employment. No skills required, just a warm body. Amazon is quickly making the move towards automation, which will eradicate those jobs like it’s nothing.

      I know Huntsville’s basic economy is different, but they’ve played the same game as Birmingham but has been immensely successful. The differentiating factor from my perspective being the industry of focus and the caliber of jobs brought to the region. While Birmingham is trying to roll out the red carpet for indifferent companies like amazon, Huntsville has NASA, US Army, Lockheed Martin, Boeing, Northrup Grumman, Raytheon, Teledyne, and so on, with average salaries well into the high fives. If Birmingham is going to grovel for outside help, it may as well be for a company that will bring skilled, high-paying employment.

  4. David
    If you have read my posts, and I know you have my opinion of Birmingham has been called negative. It is much like yours. We wasted money on trying to attract Amazon’s headquarters to Birmingham in part because our international airport goes nowhere directly. Birmingham should have spent that money enticing small businesses to the city. The SBA classifies a small business as one having 500 employees or less. Ten of these business would employee as many as now employed at Mercedes. What is holding Birmingham back is a lack of vision on the part of our government which is focused on shiny things rather than things which will support the city.

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