Amazon Leaves New York but Not the Spotlight
16 Febbraio 2019 - 04:45PM
Dow Jones News
By Chip Cutter and Vanessa Fuhrmans
Amazon.com Inc.'s sudden move to abandon plans for a new campus
in New York ends the protests in the city but doesn't remove the
national scrutiny being placed on the company, according to
corporate reputation and management experts.
"There are two very energetic forms of populism in the U.S.
right now, one on the left and one on the right, and neither likes
Amazon that much, " said Brayden King, professor of management at
Northwestern University's Kellogg School of Management. "For both,
Amazon is becoming a whipping boy."
In the short term, experts said, Amazon likely would see little
impact to its sales. However, the company's failure to deliver on a
New York campus -- the culmination of a high-profile, 14-month
nationwide search -- raises questions about the company's ability
to sway popular opinion on big ideas.
"Twenty five thousand jobs in the middle of New York was a good
thing," said Paul Argenti, professor of corporate communication at
Dartmouth College's Tuck School of Business. "But you can't execute
it if you can't communicate it. They've completely proven that
point in the past few days."
Amazon initially planned to invest $2.5 billion and bring 25,000
jobs to Long Island City, Queens. New York state and local
officials had pledged $3 billion in incentives, an economic
development package politicians and local groups later criticized.
Amazon cited local opposition to the headquarters in canceling its
plans.
"Tech companies weren't going to be the darlings forever," Mr.
Argenti said. "Now, we're starting to see what that looks
like."
That Amazon underestimated community resistance should be a
concern to shareholders, said John Wilson, head of research and
corporate governance at Cornerstone Capital Group. Mr. Wilson
compared Amazon to Walmart, and that retail juggernaut's inability
to penetrate places such as New York, even though it continues to
grow and dominate many other markets.
"The risk [to reputation] is intangible," he said. "These kind
of issues won't show up on the balance sheet anytime soon. But if
New York is the place you want to be, and talent is your main asset
and now you're not going to have access to that talent pool, you
will suffer over time."
Some saw Amazon's decision to pull out of New York as a bid to
cut short what could have hardened into ongoing scrutiny over its
tax breaks and role as a corporate citizen had it stayed.
"Amazon has historically not been a company that likes to give
in on such demands and will fight them if necessary," Mr. King from
the Kellogg School of Management said.
He cited Amazon's recent opposition to a proposed Seattle tax on
big companies to help combat homelessness. That measure failed.
Even so, Amazon has been able to weather a lot of controversies,
including criticism of its treatment of warehouse workers and role
in Seattle's affordable-housing shortage. "A lot of people have
problems with Amazon, but very rarely do those issues end up
shaping how they buy its products," he said.
Coloring the backlash to Amazon's move to New York may be the
country's shifting views on wealth and inequality, said Kim Weeden,
professor of sociology and director of the Center for the Study of
Inequality at Cornell University. Critics of the incentives offered
to Amazon often called into question why a company run by Jeff
Bezos, the world's wealthiest man, required subsidies.
"Americans have often had a love-hate relationship with
billionaires, and I do think we're in a period where there's a
little tipping of attitudes," Ms. Weeden said, "because of growing
recognition that many of our largest corporations are not paying
what we might think of as their fair share of taxes."
With Amazon, there is a growing sense that some deals they've
cut with local communities "don't work out so well for the
communities themselves, " she said.
Nationally, more politicians are now discussing wealth and
income taxes on those making more than $10 million a year. Ms.
Weeden said those topics were not part of the conversation two
years ago.
Still, she doesn't expect the New York move to affect Amazon's
reputation over the long term. "If I had to look into a crystal
ball, I would say probably not," she said. "Americans tend to have
fairly short memories in many respects."
Write to Chip Cutter at chip.cutter@wsj.com and Vanessa Fuhrmans
at vanessa.fuhrmans@wsj.com
(END) Dow Jones Newswires
February 16, 2019 10:30 ET (15:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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