The Amazon's HQ2 Controversy: Was Jeff Bezos's Decision Driven by Envy?
In 2017, Amazon launched a competition for a second headquarters, known as Amazon HQ2. Over 200 cities across North America, including major contenders like New York City, Washington D.C., Boston, Atlanta, Dallas, Denver, and Toronto, threw their hats into the ring. The competition, however, caused a competitive frenzy, delaying further narrowing of the list.
Amazon's economic development team has a process called the 'welcome wagon', followed since years. This approach was also used when the company began building warehouses in towns and cities, mostly around Amazon's HQ2.
The finalists selected were New York City (Long Island City, Queens) and Arlington, Virginia. Jeff Bezos, inspired by Elon Musk's success in securing subsidies for a battery plant in Nevada, expressed envy for Musk's bidding war for manufacturing jobs. As a result, Amazon decided to split HQ2 between New York and Virginia.
In January 2018, Amazon narrowed the list of HQ2 contenders internally. However, the process for HQ2 was handled differently due to Bezos' focus on government subsidies and the involvement of Boeing Co. Amazon stated it would invest around $5 billion and hire around 50,000 people for HQ2.
The decision to split HQ2 between New York and Virginia was widely ridiculed by international publications. Progressive politicians in New York criticized the $3 billion in incentives offered to Amazon. This criticism, along with political opposition, led Amazon to withdraw its plans for HQ2 in New York.
Virginia offered Amazon $762 million in incentives for HQ2. Amazon has since created 25,000 jobs in Virginia and 5,000 in Nashville, Tennessee. Amazon is $100 million behind the $2.4 billion in handouts Tesla has received, according to recent reports.
Despite the controversies, Amazon's HQ2 operation was intended to be kept internal, but it spread to other departments. The Amazon HQ2 saga serves as a reminder of the complexities involved in corporate decision-making and the role of government subsidies in attracting big businesses.
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