Throughout my adult life, I have been involved in the business community in Birmingham, but I have never had the opportunity to meet Jeff Bezos, the creator of Amazon and the third richest man in the world.
I haven’t seen him in Vestavia Hills, downtown Birmingham, or any of our suburbs.
He doesn’t seem to show up for meetings of the local economic development or non-profit boards.
I’m not aware of any personal fundraising efforts that he has spearheaded or donated to on behalf of UAB or our local United Way.
To be honest, I wouldn’t be shocked if Mr. Bezos didn’t know where Birmingham is.
Every month, a part of Business Alabama (BA) magazine features an Alabama county in focus.
It was really eye-opening to see the businesses that BA highlighted in Jefferson County last month, especially the section labeled “Largest Industrial Employers.”
The top 12 industrial employers in Jefferson County, according to number of employees, are listed below, ranked by Business Alabama:
- 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
With more workers than the following five corporations combined, Amazon tops the list.
That’s fantastic news for the 5,000 Amazon workers, but as I noted in a ComebackTown piece titled “Did we win the Amazon booby prize?” five years prior, we provided incentives for several positions that we would have most likely been hired for otherwise.
Birmingham was the largest metro area in the United States without an Amazon distribution center at the time of the ComebackTown piece.
In the US, Amazon has well over a thousand fulfillment centers. Was there really any doubt in anyone’s mind that Amazon would bypass Alabama?
Amazon received $51 million in incentives from Jefferson County, Alabama, and Bessemer to establish its first fulfillment center there.
The BBJ claims that other states’ governments offered lower incentives for comparable Amazon fulfillment centers: $1.7 million in Sacramento, California; $5.6 million in Salt Lake City, Utah; $6.5 million in Opa-locka, Florida; and $7 million in Houston, Texas.
Did we spend $51 million in vain?
Rather to having a local business with a CEO or owner who is deeply involved in our community, we have an absentee owner whose firm is located hundreds of miles away, doesn’t care about us, and whose earnings aren’t even invested in our state.
This makes sense given Birmingham’s past in business. For a long while, Tennessee Iron and Coal (TCI) was the largest employer in Birmingham. U.S. Steel, based in Pittsburgh, controlled TCI. Pittsburgh was the company’s top objective, not Birmingham.
The amount of local CEOs that support our local charities and non-profits with their leadership, time, and financial support is something I observe with great admiration.
Our Birmingham region has always been significantly dependent on the now-defunct local CEOs and business leaders and their organizations.
We formerly had a local “phone” firm of our own. (SouthBell). We currently lack a dominating local phone provider.
Alagasco, our local “gas” firm, is no longer in operation.
This location served as the headquarters for SouthTrust, AmSouth, Compass, and Alabama National BanCorp, four significant banks. All we have now are Regions.
We had businesses such as Torchmark, Golden Enterprises, Parisian, and Protective Life.
Numerous other local businesses either relocated, merged, or were bought.
Birmingham needs to figure out how to attract and expand its corporate headquarters, no matter how big or little.
We focus on startup incentives in the realistic hope that they will become the next Google or Amazon.
But rather than attempting to squander money on big, out-of-state corporations, we have to think about rewarding prosperous local businesses who already have their headquarters here.
Local CEOs and their management teams are prepared to invest time and money in Birmingham because they have deep ties to the city and community. (For example, the United Way of Central Alabama Executive Committee, of whom the great majority are local business representatives).
Businesses whose owners and senior management have a personal stake in our community should be rewarded; Amazon and its CEO, Jeff Bezos, do not fit this description.
ComebackTown was founded and is published by David Sher. He served as the previous chairman of the City Action Partnership (CAP), Operation New Birmingham (REV Birmingham), and the Birmingham Regional Chamber of Commerce (BBA).
