Amazon Looking for a new HQ - Detroit-Windsor Bid Rejected

[Richard]

I’m a little disappointed but not discouraged. There will come a time when major corps make Detroit their city without incentives and preconditions

Good attitude,which is also why what you say will happen.

[MizMotown]

Good! A billion dollar company soliciting cities to compete to receive the best breaks for corporate greed... blah.

[Richard]

^ I do not think corporations are any different then most people,it is free money.

I wonder if the same effort was applied to local small business opportunities if the impact would be the same or create more of a diverse economy.

When you look at historical tax credits,federal funds etc. They do work best on a local leval and have a slower but more solid impact.

Not to pick on but Mr Gilbert was incentivized 200 million + for his move to the city and even more for every building he purchased.

7 years later was that a positive for the city and worth the funds spent in payback to the community?

The city as a whole kinda looks at it as an investment and hopes that the return to its citizens and taxpayer base outweighs the initial investment.

[emu steve]

Minneapolis can be considered a cold city and it seems desirable,the south is not exactly a warm place either it was down in the 30s last week so you really cannot escape it.

Maybe Alaska might be a deterrent.

The sunbelt has its negitive sides also,you pay for that sunshine one way or another,and for the most part you really have to either love sprawl or enjoy being out in the sticks.

As someone who has lived in the D.C. area for a long time [[after living in Michigan for a long time), I never confuse D.C. for Miami or Atlanta, but it isn't Detroit either.

Once one moves from colder to warmer it is hard to go the other way...

[Wesley Mouch]

I recall some Canadians folks mentioning that savings from healthcare could also total $650 million yearly for Amazon if they select Toronto.

Quoting gross dollar amount may be impressive, but what's that per head?

[Hypestyles]

regarding transit-- Evans, Hackel, Patterson and Duggan discuss this at the Detroit Economic Club--

http://www.crainsdetroit.com/article...-leaders-go-in

[iheartthed]

regarding transit-- Evans, Hackel, Patterson and Duggan discuss this at the Detroit Economic Club--

http://www.crainsdetroit.com/article...-leaders-go-in

Exhibit A, should anyone ever wonder why Metro Detroit cannot compete.

[hybridy]

Exhibit A, should anyone ever wonder why Metro Detroit cannot compete.

DG claims he has the real reason...Detroit's reputation. Whenever folks ask me about the D, I tell them everything you think it is, it is; but you also have no idea what else is happening. Hell, most the Detroit's burbs don't know what's happening.

http://1md1ifcdgpn3hahxo2l2bzt6.wpen...n-the-Room.pdf

As I continue to maintain: fix the schools - make them attractive to a racially and economically diverse set of tax paying families. does that mean bankrolling magnet schools open to well to do folks in Ferndale, Grosse Pointe, Palmer Woods and Livonia? Yes Does the mean white people and gentrification? Yes Does that mean a lottery system for poor minorities in gentrifying communities where there is pressure on those that stayed? Yes Has this been done before, successfully? Yes

https://www.thisamericanlife.org/562...-with-part-one

[iheartthed]

DG claims he has the real reason...Detroit's reputation. Whenever folks ask me about the D, I tell them everything you think it is, it is; but you also have no idea what else is happening. Hell, most the Detroit's burbs don't know what's happening.

http://1md1ifcdgpn3hahxo2l2bzt6.wpen...n-the-Room.pdf

As I continue to maintain: fix the schools - make them attractive to a racially and economically diverse set of tax paying families. does that mean bankrolling magnet schools open to well to do folks in Ferndale, Grosse Pointe, Palmer Woods and Livonia? Yes Does the mean white people and gentrification? Yes Does that mean a lottery system for poor minorities in gentrifying communities where there is pressure on those that stayed? Yes Has this been done before, successfully? Yes

https://www.thisamericanlife.org/562...-with-part-one

I think he's right. Detroit's brand is super hard to sell. But I don't think it's because of the schools. That's something only locals care about, not millennials who are looking at a globe and deciding where they want to be.

[hybridy]

I think he's right. Detroit's brand is super hard to sell. But I don't think it's because of the schools. That's something only locals care about, not millennials who are looking at a globe and deciding where they want to be.

You're wrong. I'm a millennial who took a job in Detroit in 2014, as did my wife. We looked at University District house and gesu school for our 2 young children. The longer commute from Bloomfield and Birmingham schools was the cheaper, safer, and more academically rigorous alternative. TThe 1980-86 millennials are largely married and home owners...we're not 20-somethings living with mom and dad + buying starbucks everyday. we're 30-somethings who if we aren't married homeowners, we're drinking ourselves silly wondering why we can't get our shit together.

[313WX]

I said it was Detroit's reputation days ago [[not the so-called "line" Amazon gave).

Who's actually shocked?

[iheartthed]

You're wrong. I'm a millennial who took a job in Detroit in 2014, as did my wife. We looked at University District house and gesu school for our 2 young children. The longer commute from Bloomfield and Birmingham schools was the cheaper, safer, and more academically rigorous alternative. TThe 1980-86 millennials are largely married and home owners...we're not 20-somethings living with mom and dad + buying starbucks everyday. we're 30-somethings who if we aren't married homeowners, we're drinking ourselves silly wondering why we can't get our shit together.

I'm a millennial as well and I'm talking about a population of millennials that I seem to have more visibility into: those without ties to Metro Detroit. Those people wince when I mention Detroit and try to convince them that it is an interesting city with the potential to boom.

[iheartthed]

I said it was Detroit's reputation days ago [[not the so-called "line" Amazon gave).

Who's actually shocked?

It really is the only thing that explains it. Indianapolis over Detroit? Based on the criteria in the proposal? No way in hell. Michigan is the only top 10 state that does not have a city still in the running. It seems like they went out of their way to remove Detroit, lol.

My bet is that they did some type of polling to test each city's "brand" and factored that into the score. That would explain how a city like Miami, with huge negatives according to the criteria they claimed to want, would suddenly appear as a finalist.

[Lowell]

I found Dan Gilbert's letter to Amazon soul-baring with a whiff of hurt at not making the final 20 cut.

He convincingly dismisses the talent argument, accepts the transportation criticism, then blames it on "The Elephant in the Room" — our reputation. [bolded because he bolded it in the letter.]

I would say to him, "You lost this one kid, but you may have won the war."

For first time in my life we spoke as a united international metropolis.

Gilbert lays the blame on the burden our past reputation, "Elephant in the room", for our rejection.

Our reputation is not the elephant, it is just a giant pile of dung dumped by the REAL Elephant—our decades of metropolitan disunity and internal competition—an elephant with a racist lineage.

So that’s where I see the positive in this defeat—our often fueling tribes saw themselves as one, even if for a fleeting moment. If we can keep doing this we will win. It's a start.

[Hypestyles]

DG claims he has the real reason...Detroit's reputation. Whenever folks ask me about the D, I tell them everything you think it is, it is; but you also have no idea what else is happening. Hell, most the Detroit's burbs don't know what's happening.

http://1md1ifcdgpn3hahxo2l2bzt6.wpen...n-the-Room.pdf

As I continue to maintain: fix the schools - make them attractive to a racially and economically diverse set of tax paying families. does that mean bankrolling magnet schools open to well to do folks in Ferndale, Grosse Pointe, Palmer Woods and Livonia? Yes Does the mean white people and gentrification? Yes Does that mean a lottery system for poor minorities in gentrifying communities where there is pressure on those that stayed? Yes Has this been done before, successfully? Yes

https://www.thisamericanlife.org/562...-with-part-one

Detroit continues to lose with lotteries. no more lotteries. lottery money was supposed to go to public schools. look where they're at.

[SammyS]

DG claims he has the real reason...Detroit's reputation. Whenever folks ask me about the D, I tell them everything you think it is, it is; but you also have no idea what else is happening. Hell, most the Detroit's burbs don't know what's happening.

http://1md1ifcdgpn3hahxo2l2bzt6.wpen...n-the-Room.pdf

As I continue to maintain: fix the schools - make them attractive to a racially and economically diverse set of tax paying families. does that mean bankrolling magnet schools open to well to do folks in Ferndale, Grosse Pointe, Palmer Woods and Livonia? Yes Does the mean white people and gentrification? Yes Does that mean a lottery system for poor minorities in gentrifying communities where there is pressure on those that stayed? Yes Has this been done before, successfully? Yes

https://www.thisamericanlife.org/562...-with-part-one

Very well written letter with a tinge of confidence and humility without sounding bitter whatsoever. Proud to have folks like DG on our side.

[hybridy]

Detroit continues to lose with lotteries. no more lotteries. lottery money was supposed to go to public schools. look where they're at.

I mean lottery system for limited places in a magnet school, not a cash prize

[bust]

I found Dan Gilbert's letter to Amazon soul-baring with a whiff of hurt at not making the final 20 cut.

He convincingly dismisses the talent argument, accepts the transportation criticism, then blames it on "The Elephant in the Room" — our reputation. [bolded because he bolded it in the letter.]

I would say to him, "You lost this one kid, but you may have won the war."

For first time in my life we spoke as a united international metropolis.

Gilbert lays the blame on the burden our past reputation, "Elephant in the room", for our rejection.

Our reputation is not the elephant, it is just a giant pile of dung dumped by the REAL Elephant—our decades of metropolitan disunity and internal competition—an elephant with a racist lineage.

So that's where I see the positive in this defeat—our often fueling tribes saw themselves as one, even if for a fleeting moment. If we can keep doing this we will win. It's a start.

I did not find Dan Gilbert's dismissal of the talent argument convincing at all.

Dan Gilbert is right: Detroit has lots of talent.

Dan Gilbert is right: It's not about the schools. Schools only teach part of that talent. Most of it needs to be learned on the job.

Dan Gilbert is right: At least 75% of the tech talent in premier tech companies relocated to work there.

But here's the question we should solve: Why does Amazon think they'll have a hard time convincing the talent they need to relocate to Detroit?

Dan Gilbert is right: Part of it is due to Detroit's bad reputation. And part of that reputation isn't true or is less true today than it once was.

But that's not the whole picture. There are other elephants in the room.

A much bigger explanation is Detroit's lack of opportunity. There are not enough opportunities in Detroit for the kind of tech talent Amazon needs. Which brings us back to the talent argument.

Dan Gilbert is right: Detroit has a large population of engineers.

But that engineering talent is overwhelmingly focused on the auto industry. Detroit has opportunities for mechanical engineers in spades. It is not a chicken-or-the-egg question why Detroit has mechanical engineers in spades.

Relative to the rest of its needs, Amazon does not need spades of mechanical engineers.

Amazon needs network engineers with experience designing and deploying massive distributed cloud services. System engineers and data scientists with experience managing performance across massively scaled applications. Software engineers with experience building them. Security engineers capable of locking down and defending them. And computer scientists, digital UX designers, technology managers, and business leaders deep in those and related skills. For starters.

Those opportunities don't currently exist in Detroit in large numbers. Vastly more of those opportunities exist elsewhere. It's not a chicken-or-the-egg question why so much more of those talents exist elsewhere too.

Dan Gilbert is right: Today we enjoy the luxury to move where the jobs are.

Just one anecdotal example:

I left Detroit for better opportunities. And since leaving, I've developed some of the talent Amazon is looking for. Amazon recruiters frequently reach out to me. They reach out to my wife just as often. And our colleagues at work.

But no Detroit area company has ever tried to recruit us. I don't know anyone else in my industry who has been approached by one either.

Even when I actively look for employment in the Detroit area it is incredibly rare to find a job appropriate for my skills.

One rare occasion I found a possible match at Dan Gilbert's company. Except it wasn't a match. They were willing to pay only about half as much as I was making in New York. Sure: lower cost of living, but come on! You're not going to attract talent to Detroit like that.

Amazon pays better. And if Amazon opened their 2nd headquarters in Detroit there suddenly would be good opportunities in Detroit for people with my skill set. Some may disagree, but I think overall we'd be good for Detroit.

However Detroit has another problem attracting tech talent, in this case magnified by a characteristic of Amazon's work culture.

Amazon has a notoriously low employee retention rate. The International Business Times said the median duration of employment at Amazon only lasts 1 year, the 2nd worst among Fortune 500 Companies. Amazon has been criticized for creating a super-competitive work environment to squeeze performance and efficiency out of employees. A BuzzFeed article described employment there this way: "A revolving door. Churn and burn." A Harvard Business School article described Amazon's HR policy as promoting an environment in which "only the strongest survive."

Everyone seriously considering a job at Amazon knows this. And they'd be a fool if they did not consider what other potential opportunities existed where they're considering relocating. Chances are good they won't last at Amazon long enough to finish a year lease.

Unfortunately, those jobs in Detroit rarely exist. If they do, they don't pay well compared to other cities.

A big disincentive to accept an offer at Amazon Detroit would have been that similar career opportunities in Detroit are almost non-existent outside Amazon. At least until a secondary tech industry spun off around it.

That's definitely not a problem in Seattle. People who take that risk moving to Seattle know there are ample other opportunities there if Amazon doesn't work out. It similarly wouldn't be a problem in San Francisco, Silicon Valley, New York, Boston, or Washington D.C.. Cities like Chicago, Toronto, Los Angeles, Dallas, Austin, Denver, Charlotte, even probably Atlanta and Miami are also better this way. This list is not complete, but notice how it looks a lot like Amazon's finalists.

Dan Gilbert said, "aren't nearly all companies tech-based these days?" By that logic nearly every city's economy is tech-based these days too. And for the purposes of this discussion that argument misses the mark by a wide margin. Not nearly all companies, not nearly all cities are good places for tech employment.

Realistically, Detroit is not a center of the tech industry any more than it is a center of the film or banking industries. Unless that technology relates to cars.

If your goal is to push the boundaries of automotive technology, Detroit is one of the best places to be. Maybe the best in the Western Hemisphere. I hope that continues to be the case.

But I also hope Detroit diversifies its economy, and grows to provide more opportunity to a wider range of talents — especially in areas that are likely to be critical in the future.

I agree Dan Gilbert misidentified the elephant when he said Detroit's biggest problem is one of reputation, as if to ignore the root issues and lay blame elsewhere. And I agree how important it is for Detroit to continue the progress it has made uniting its feuding tribes. That part of your analysis is spot-on.

However, the talent issue is real and deserves thoughtful consideration too.

I'll awkwardly continue Dan Gilbert's metaphor.

If Detroit's civic and business leaders continue to work together it's a great opportunity. But it would be a wasted opportunity if they focus only on one elephant. Especially when there are other, bigger elephants in the room.

References:

Amazon.com Has Second Highest Employee Turnover Of All Fortune 500 Companies
http://www.ibtimes.com/amazoncom-has...panies-1361257

Inside Amazon: Wrestling Big Ideas in a Bruising Workplace
The company is conducting an experiment in how far it can push white-collar workers to get them to achieve its ever-expanding ambitions.
https://www.nytimes.com/2015/08/16/t...workplace.html

Amazon Rewards Employees Who Stay — But Turnover Is Still High
https://www.buzzfeed.com/carolineodo...-is-still-high

What's Wrong With Amazon’s Low-Retention HR Strategy?
https://hbswk.hbs.edu/item/is-someth...on-hr-strategy

[iheartthed]

^Well said.

[Lowell]

Great post and analysis Bust. I hope we get you and your wife back here.

...One rare occasion I found a possible match at Dan Gilbert's company. Except it wasn't a match. They were willing to pay only about half as much as what I was making in New York. Sure: lower cost of living, but come on! You're not going to attract talent to Detroit like that.

Amazon pays better. And if Amazon opened their 2nd headquarters in Detroit there suddenly would be good opportunities in Detroit for people with my skill set. Some may disagree, but I think overall we'd be good for Detroit....

One thing I found puzzling in Gilbert's enthusiasm for the Amazon bid was a "be careful what you wish for" quandary as his talent pool would likely have been raided by Amazon driving his costs up considerably.

Maybe he figured selling them office space and the consequent rise in value of his immense real estate portfolio would compensate for the sure-to-rise labor costs.

He had a bad week as along with the Amazon snub he also went to court to answer charges of selling junk loans back in the housing bubble days.

[bibs]

When I heard the announcement about their bid I immediately said to my wife;" They ground thought all the people in Seattle and now no one wants to work for them. They are looking for some new meat to grind through." I never took the time to investigate. Your links and comments confirms what I have suspected. Honestly, I think this is the same reason the Big Three have trouble getting talent to come to Detroit. The street prophets and whispers have spoken! Hell be to the soul sucking corporate torture chamber where only the sociopaths get promoted to management. I was in that survivor island environment for a while and I'll never going back to it. Life's too short my friend.

[bibs]

I did not find Dan Gilbert's dismissal of the talent argument convincing at all.

Dan Gilbert is right: Detroit has lots of talent.

Dan Gilbert is right: It's not about the schools. Schools only teach part of that talent. Most of it needs to be learned on the job.

Dan Gilbert is right: At least 75% of the tech talent in premier tech companies relocated to work there.

But here's the question we should solve: Why does Amazon think they'll have a hard time convincing the talent they need to relocate to Detroit?

Dan Gilbert is right: Part of it is due to Detroit's bad reputation. And part of that reputation isn't true or is less true today than it once was.

But that's not the whole picture. There are other elephants in the room.

A much bigger explanation is Detroit's lack of opportunity. There are not enough opportunities in Detroit for the kind of tech talent Amazon needs. Which brings us back to the talent argument.

Dan Gilbert is right: Detroit has a large population of engineers.

But that engineering talent is overwhelmingly focused on the auto industry. Detroit has opportunities for mechanical engineers in spades. It is not a chicken-or-the-egg question why Detroit has mechanical engineers in spades.

Relative to the rest of its needs, Amazon does not need spades of mechanical engineers.

Amazon needs network engineers with experience designing and deploying massive distributed cloud services. System engineers and data scientists with experience managing performance across massively scaled applications. Software engineers with experience building them. Security engineers capable of locking down and defending them. And computer scientists, digital UX designers, technology managers, and business leaders deep in those and related skills. For starters.

Those opportunities don't currently exist in Detroit in large numbers. Vastly more of those opportunities exist elsewhere. It's not a chicken-or-the-egg question why so much more of those talents exist elsewhere too.

Dan Gilbert is right: Today we enjoy the luxury to move where the jobs are.

Just one anecdotal example:

I left Detroit for better opportunities. And since leaving, I've developed some of the talent Amazon is looking for. Amazon recruiters frequently reach out to me. They reach out to my wife just as often. And our colleagues at work.

But no Detroit area company has ever tried to recruit us. I don't know anyone else in my industry who has been approached by one either.

Even when I actively look for employment in the Detroit area it is incredibly rare to find a job appropriate for my skills.

One rare occasion I found a possible match at Dan Gilbert's company. Except it wasn't a match. They were willing to pay only about half as much as I was making in New York. Sure: lower cost of living, but come on! You're not going to attract talent to Detroit like that.

Amazon pays better. And if Amazon opened their 2nd headquarters in Detroit there suddenly would be good opportunities in Detroit for people with my skill set. Some may disagree, but I think overall we'd be good for Detroit.

However Detroit has another problem attracting tech talent, in this case magnified by a characteristic of Amazon's work culture.

Amazon has a notoriously low employee retention rate. The International Business Times said the median duration of employment at Amazon only lasts 1 year, the 2nd worst among Fortune 500 Companies. Amazon has been criticized for creating a super-competitive work environment to squeeze performance and efficiency out of employees. A BuzzFeed article described employment there this way: "A revolving door. Churn and burn." A Harvard Business School article described Amazon's HR policy as promoting an environment in which "only the strongest survive."

Everyone seriously considering a job at Amazon knows this. And they'd be a fool if they did not consider what other potential opportunities existed where they're considering relocating. Chances are good they won't last at Amazon long enough to finish a year lease.

Unfortunately, those jobs in Detroit rarely exist. If they do, they don't pay well compared to other cities.

A big disincentive to accept an offer at Amazon Detroit would have been that similar career opportunities in Detroit are almost non-existent outside Amazon. At least until a secondary tech industry spun off around it.

That's definitely not a problem in Seattle. People who take that risk moving to Seattle know there are ample other opportunities there if Amazon doesn't work out. It similarly wouldn't be a problem in San Francisco, Silicon Valley, New York, Boston, or Washington D.C.. Cities like Chicago, Toronto, Los Angeles, Dallas, Austin, Denver, Charlotte, even probably Atlanta and Miami are also better this way. This list is not complete, but notice how it looks a lot like Amazon's finalists.

Dan Gilbert said, "aren't nearly all companies tech-based these days?" By that logic nearly every city's economy is tech-based these days too. And for the purposes of this discussion that argument misses the mark by a wide margin. Not nearly all companies, not nearly all cities are good places for tech employment.

Realistically, Detroit is not a center of the tech industry any more than it is a center of the film or banking industries. Unless that technology relates to cars.

If your goal is to push the boundaries of automotive technology, Detroit is one of the best places to be. Maybe the best in the Western Hemisphere. I hope that continues to be the case.

But I also hope Detroit diversifies its economy, and grows to provide more opportunity to a wider range of talents — especially in areas that are likely to be critical in the future.

I agree Dan Gilbert misidentified the elephant when he said Detroit's biggest problem is one of reputation, as if to ignore the root issues and lay blame elsewhere. And I agree how important it is for Detroit to continue the progress it has made uniting its feuding tribes. That part of your analysis is spot-on.

However, the talent issue is real and deserves thoughtful consideration too.

I'll awkwardly continue Dan Gilbert's metaphor.

If Detroit's civic and business leaders continue to work together it's a great opportunity. But it would be a wasted opportunity if they focus only on one elephant. Especially when there are other, bigger elephants in the room.

References:

Amazon.com Has Second Highest Employee Turnover Of All Fortune 500 Companies
http://www.ibtimes.com/amazoncom-has...panies-1361257

Inside Amazon: Wrestling Big Ideas in a Bruising Workplace
The company is conducting an experiment in how far it can push white-collar workers to get them to achieve its ever-expanding ambitions.
https://www.nytimes.com/2015/08/16/t...workplace.html

Amazon Rewards Employees Who Stay — But Turnover Is Still High
https://www.buzzfeed.com/carolineodo...-is-still-high

What's Wrong With Amazon’s Low-Retention HR Strategy?
https://hbswk.hbs.edu/item/is-someth...on-hr-strategy

When I heard the announcement about their bid I immediately said to my wife;" They ground thought all the people in Seattle and now no one wants to work for them. They are looking for some new meat to grind through." I never took the time to investigate. Your links and comments confirms what I have suspected. Honestly, I think this is the same reason the Big Three have trouble getting talent to come to Detroit. The street prophets and whispers have spoken! Hell be to the soul sucking corporate torture chamber where only the sociopaths get promoted to management. I was in that survivor island environment for a while and I'll never going back to it. Life's too short my friend.

[Hypestyles]

Detroit's urban kids are being left out of STEM-related career cultivation. It's sad.

[M. Brown]

I wonder if they are keep whatever presence they still have in Detroit. Back in 2015 they seemed to think that Detroit had enough talent although maybe not enough to support an HQ.

https://youtu.be/jjJsFaqAOA0

[stasu1213]

I think that Detroit should had focused on neighborhoods outside the downtown/midtown area. Stop allowing the "flip this house" concept to exist in the city for allows more slumlords and unruly destructive tenants living in these homes. Get the working class people back into these neighborhoods, have ordinances in places for each home owner to keep theF outside of their homes clean and presentable, build up the business/retail districts in those communities, and have schools open that are for those communities only. Detroit would look then look more attractive to those billion dollar corporations such as Amazon. Focusing on the downtown area isn't going to cut it. Companies like Amazon look at where their employees could live, shop, and play without living in the rat race of a downtown scene but a nice neighborhood where one could have their own enclave ie dwelling with a front and backyard for privacy. A self sufficient retail/business district for each community with good grocery stores such as Kroger, Whole Foods, and Trader Joes as well as good quality independent grocers such as the Village Market in Grosse Point, Honey Bee in Mexicantown, or Hollywood Market in Royal Oak. These stores may not give kickbacks to planners and elected officials for the stores to set up shop but stores such as these in the communities would make the neighborhoods that they are in especially Detroit more attractive to companies who are considering Detroit as their second home. More rapids busses and mini busses for shuttles would be much needed in the city. The shuttle could be used for loop trips for communities such as Lafayette Park, West Village, Woodbridge, Midtown, and Corktown to bring residents from those communities to downtown/midtown Detroit to shop and support the stores such as Nike, Under Armor, potentially Apple and Levi Strauss as well as events and games that are occurring downtown. Let's face it; there is not enough people living downtown to really support those retail that are and will line woodward in the next year or so. Other cities across America retail stores are mostly supported by those who don't live in their downtown areas but from those who commute by train, subways, Ls, and busses to these retail areas and districts