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'A Major Distraction': Is A Megadeal Like Amazon's HQ2 Always Worth It?
Thursday marks the deadline for bids in Amazon's highly publicized search for the location of its second headquarters, dubbed HQ2. Cities are clamoring to land the conglomerate's project and its unparalleled promise of up to 50,000 jobs paying an average of $100,000, at one of the world's fastest-growing companies.
But with that comes some public soul-searching: How much should a city or state subsidize a wealthy American corporation in exchange for such a shiny promise? [...] Financial incentives are among numerous criteria Amazon included in its solicitation of bids. [...] By multiple estimates, Amazon has already cashed in on more than $1 billion in taxpayer-funded subsidies and incentives for its warehouses, data centers and other operations.
[...] "I often thought, as governor, it would be sort of nice, if all the governors just got together and said, 'Look, we're just not going to play this anymore,' " says former Wisconsin Gov. Jim Doyle. Doyle was at the helm during the financial crisis in 2008, when General Motors shuttered plants, including a factory in Janesville, Wis. But later, the automaker said it would reopen one location, bringing back the jobs. Wisconsin put together its largest incentive package yet — Doyle says he felt an obligation to — but it lost to Michigan's even bigger offer. [...] Since then, Wisconsin has become infamous for its eye-popping $3-billion financial incentive to get a Foxconn liquid-crystal display plant.
Previously: Amazon to Invest $5 Billion in Second HQ Outside of Seattle
Cities Desperate to Become the Location of Amazon's "Second Headquarters"
(Score: 4, Interesting) by Grishnakh on Thursday October 19 2017, @11:20PM (19 children)
Watch for them to follow in Sears footsteps.
Into bankruptcy? It took Sears a long time to get to that point (and they're still alive and kicking now, though I'm not sure how, just like with RadioShack). It'll probably be a long time before this happens to Amazon, though you never know.
Personally, I use Amazon a lot for just looking for stuff, and maybe reading reviews, but I end up buying elsewhere. Their prices just aren't very good any more. And too much stuff is shipped straight from China, but at much higher prices than the exact same thing on Aliexpress.
(Score: 4, Interesting) by Snotnose on Thursday October 19 2017, @11:36PM (11 children)
It's cuz Eddie is sucking all possible value out of Sears before he lets it die. He makes shadow companies, then transfers Sears assets to them leaving debt in their wake. Repeat, repeat, repeat.
People like Eddie Lamport need to be regulated out of existence, they are nothing but leeches on the economy.
My ducks are not in a row. I don't know where some of them are, and I'm pretty sure one of them is a turkey.
(Score: 2) by Grishnakh on Friday October 20 2017, @12:42AM (9 children)
Ok, but how is he a "leech on the economy"? I'm not sure I get this one. He's a leech on Sears, true, but he's the CEO there because the board of directors chose him, right? And the board is elected by the shareholders, right? So we can assume that the shareholders want him as CEO. If he's leeching on anyone, wouldn't it just be Sears shareholders? Why should the rest of us give two shits about them? It's just one company; if they want to drive their company into the ground, that's their problem. Obviously, it's a bad thing if lots of companies are being mismanaged all at once, so I can understand the call for a certain amount of regulation to avoid the economic effects of too many robber-barons doing too much too quickly, but for this case I'm not too broken up about it: there's a bunch of companies that are taking over and doing very well, namely Amazon, but also other online retailers. It's quite possible that Sears would be collapsing even with the most capable CEO in the world; they're just obsolete, and their brand name hasn't been worth much in a very long time, with all the competition they've gotten from many other places (better mall retailers like Macy's, discount big-box stores like Walmart and Target, Harbor Freight for tools, and of course all the online sellers now).
(Score: 4, Interesting) by Snotnose on Friday October 20 2017, @12:53AM (2 children)
Because people like him (*cough* Mitt Romney *cough*) have been doing this shit for a couple decades now, and they all look to see what works to suck their next company dry.
This financial manipulation is bullshit and the people involved need to go to prison.
My ducks are not in a row. I don't know where some of them are, and I'm pretty sure one of them is a turkey.
(Score: 1) by toddestan on Sunday October 22 2017, @04:34PM (1 child)
That's basically it. It's a transfer of wealth from small investors, like your average worker who owns a small piece of Sears as part of their 401k, to the urtra-rich like Mitt Romney.
(Score: 2) by JoeMerchant on Monday October 23 2017, @05:21PM
Hollywood was all over this in the 1980s, Danny DeVito in Other People's Money comes to mind, but there were dozens of big movies about it. It hasn't gotten any better since then.
🌻🌻 [google.com]
(Score: 2) by JoeMerchant on Monday October 23 2017, @05:30PM (5 children)
Do you invest in mutual funds, or do you manage a portfolio full of individual stocks?
If you don't spend multiple hours per week managing your portfolio, that answer should include at least some mutual funds, or you're living with lots of risk.
So, now if you do have mutual funds, have you dug into what each of them contains? For most investors the answer is: no. There's not usually even an easy way to determine your exposure to Sears, much less all the pies that Eddie has his fingers in. You trust your fund managers to try to make gains commensurate with a certain level of risk in your portfolio, but in the end the top fund managers don't outperform a bunch of monkeys on a consistent basis.
So, while your fund manager holds some Sears, and Eddie siphons off value from Sears into other companies you can't even invest in, are you pissed off if that missing value impacts your fund performance because the quarterly report came up short? Probably not, because it's all hidden from you.
If there were only a couple of Eddies in the world, it would just be part of the cost of doing business, but there are so many of these operations in existence, it's impacting an enormous number of people's lives in a negative ways, small and large, and boosting these people's fortunes dramatically.
It's the kind of thing that a democracy, government by the majority, is supposed to be able to reverse. But: they don't really educate children in this country about the true difference between a democracy and the United States system of government until they're 20+ years old, if ever.
🌻🌻 [google.com]
(Score: 2) by Grishnakh on Monday October 23 2017, @05:41PM (4 children)
You trust your fund managers to try to make gains commensurate with a certain level of risk in your portfolio, but in the end the top fund managers don't outperform a bunch of monkeys on a consistent basis.
Your whole argument seems to be based on this. Citation? Surely decent fund managers would understand this stuff (since some internet randos seem to), and divest any stock from companies being run this way.
(Score: 2) by JoeMerchant on Monday October 23 2017, @08:16PM (3 children)
How do you evaluate the managers of mutual funds you invest in? I mean, there's the profile they post in the prospectus, years in management, track record, etc. Do you really know them better than an internet rando before you invest with them? If you do, you're rare.
Also, as for divesting from companies being run this way, you would think that such divestments would be easily noticed on the stock price history: a huge dip on the day that people become aware of parasitic ownership, accompanied by press releases explaining the reason for the huge dip. Instead, we get bigger movement when some Wall Street rando publishes a downgrade on their buy/sell rating, often based on sketchy research from months earlier.
🌻🌻 [google.com]
(Score: 2) by Grishnakh on Monday October 23 2017, @09:51PM (2 children)
How do you evaluate the managers of mutual funds you invest in? I mean, there's the profile they post in the prospectus, years in management, track record, etc.
That's basically it; how else would you evaluate them? The track record should be sufficient. If they've consistently performed well, then that would seem to show competent management, right?
(Score: 2) by JoeMerchant on Monday October 23 2017, @11:49PM (1 child)
that they haven't done anything particularly bone-headed, yet.
Past performance is no guarantee of future returns, or anything at all really.
🌻🌻 [google.com]
(Score: 2) by Grishnakh on Tuesday October 24 2017, @01:28AM
No, you can't guarantee anything in the future, but past performance is an indicator of some degree of competence usually. It's a lot better to choose someone who's performed well in the past over someone who's performed poorly.
(Score: 2) by JoeMerchant on Monday October 23 2017, @05:18PM
Who benefits from Eddie's value extraction from the Sears carcass? Think of the yacht builders who would be out of business if Eddie and his kind didn't concentrate wealth like they do. Crashing high-end real-estate values, luxury car dealerships out of business, all kinds of boot licking service jobs just gone. Those people who are put out of work by the closing Sears stores, a good 1% of them can find new work in the luxury support sectors, and isn't that what really matters? /s
🌻🌻 [google.com]
(Score: 2) by JoeMerchant on Friday October 20 2017, @03:39PM (6 children)
Not sure what "much higher" is, but with Amazon there is some modicum of customer support / vendor vetting that isn't there on Aliexpress.
If, for instance, I was buying an e-bike motor, and I could get it on Amazon for $700 or likely the same thing on Aliexpress for $500 - I _might_ just use Amazon for the warm fuzzy of thinking that they care if I get burned on this deal or not and therefore I'm less likely to end up unhappy with the purchase.
If I was buying 100 e-bike motors and could do some test purchases and direct negotiation with the vendor, I'd definitely choose the Aliexpress route, or possibly just direct vendor dealing if they're interested in that for a $50K deal.
🌻🌻 [google.com]
(Score: 2) by Grishnakh on Friday October 20 2017, @04:43PM (1 child)
Aliexpress isn't for buying 100 e-bike motors, it's for buying small quantities. It's an alternative to buying the exact same thing on Ebay or Amazon from the same Chinese seller, or buying the exact same thing from some guy in the US who bought a container of such things and is reselling them. If you're looking to buy stuff in bulk and resell it, you usually go to Alibaba.com.
Honestly, I haven't seen much on Amazon as for as "vendor vetting". They'll let anyone sell on there, no questions asked. There's countless fly-by-night sellers on there that I've seen that are selling cheap Chinese stuff one month, and disappeared the next. I'm sorry, I just don't buy this idea that Amazon has customer service worth paying extra for. Aliexpress has built-in dispute resolution stuff too; I haven't had to use it yet, but I don't see how it could be any worse than Amazon's or Ebay's. The thing that's nice about Aliexpress (and also Ebay) is that it's very clear where the seller is located. Amazon hides this completely; you can only tell by looking at the shipping time on the checkout page after you've gone through all the trouble of going through the checkout process. If you want to specifically avoid Chinese vendors in a product search, it's impossible. On Ebay, you just click "North America only" or "US only". On Aliexpress, you just don't use the site.
(Score: 2) by JoeMerchant on Friday October 20 2017, @09:02PM
I suppose Amazon has "bought some loyalty" from me by instantly reverting all the e-purchases my kids have made on the Kindle... I've never really had a vendor dispute through Amazon yet, so that's another source of my confidence. I assume both Amazon and Aliexpress have extensive "how we help you if there's a problem" written policies, but I _feel_ like Amazon might have something to lose if I walk away as a customer, Aliexpress not so much.
EBay and I had a problem back in the 1990s, I walked away from eBay and didn't look back for 20+ years - I think I might have bought 2 things through eBay in the past 5 years, and nothing in the 20 years before that. Before the problem, I was starting to become a habitual customer, 2-3 transactions per month on average. I'm sure I'm not the only one, just as I'm sure there's not enough of us to sink eBay, but there are enough to reduce their profits.
🌻🌻 [google.com]
(Score: 2) by urza9814 on Monday October 23 2017, @12:28PM (3 children)
I've bought stuff on Amazon before and had it never show up and contacted support and it never got resolved and I never got the product and never got my money back. Amazon doesn't actually offer that much protection...
(Score: 2) by JoeMerchant on Monday October 23 2017, @02:20PM (2 children)
If they piss you off bad enough, you really should shut down your Amazon purchasing activity and take your business elsewhere.
As a family, we've been placing about 100 orders a year with Amazon for the past 10+ years, and used them ever since they started, so far we've been satisfied with any dispute situations we've encountered - most satisfied that the disputes have been very rare.
🌻🌻 [google.com]
(Score: 2) by urza9814 on Monday October 23 2017, @03:24PM (1 child)
Haven't closed my account yet, but I do always try to find what I'm looking for elsewhere now and only order from Amazon as a last resort. Usually get stuff faster that way too...Amazon shipping is the slowest I've ever encountered!
(Score: 2) by JoeMerchant on Monday October 23 2017, @05:11PM
Funny, my most common discomfort with Amazon shipping is that they promise it in 5-8 days and it arrives in 2 which has caused me anxiety more than once when I ordered a laptop for work and it was left sitting on my doorstep while I was out of town (luckily, our doorstep is pretty protected from the world.)
I do experience those super-long lead times when getting some stuff that's sourced directly from Asia, but for things like that if I'm in any kind of a hurry I usually use DigiKey or similar sources instead. My latest long-lead Amazon purchase was a bag of 30 vinyl coated spring clips, I think it was something trivial like $4 with free shipping and that did take nearly 2 months to arrive, but... it's not like my potato chips were getting stale waiting for the clips to arrive.
🌻🌻 [google.com]