Amazon Strikes Back

Is Jeff Bezos learning a lesson from slimy NY politicians? Or are NY pols getting a lesson from Bezos and Amazon? At this point, it is hard to tell which. Damn the torpedoes.

So Amazon announced it is backing out of a deal it had with NY and NYC for a headquarters. Why bother saying it is Amazon when it is Bezos? The lucrative deal with NYC, it turns out, may not have been lucrative enough for Bezos. So blow up the deal.

Well, many lawmakers in NY were complaining about the deal anyway. Now Amazon seems ready to abandon it. Call it what it was for them, corporate welfare. NY made promises on taxes and other considerations on the prospect of luring Amazon headquarters to NY. But what happens when you actually hook the big fish? Then the tussle begins.

Seems NY already revealed their hand as to how generous they are willing to be. What’s not to like about that if you are Amazon? Except now both NY and Amazon find out it really isn’t that popular to the people and it left many wondering if all those corporate perks were worth it to begin with — even before any construction begins?

The rub is Cuomo is now angry that Amazon did not do more to sell the public on the deal. So, this private raffle that the Governor engaged in with secrecy from the public is not all that popular to the public. Wonder why? That secrecy was a stipulation too. And some politicians in NYC did not favor the deal. So Cuomo wants to shovel all the blame over on Amazon for “not selling” the public on the deal. Excuse me, that is kind of his job. Since he is the one that made the deal and is the top executive in the state, shouldn’t he be the one to sell the deal? Just the fact that they have to sell it should tell you something about it. If it was that clearly a net positive for NY, how much selling would be needed?

But inherent in this little breakup are the real lessons about such plans. One is the deal itself done by the state. Who can you trust in the state and how long can you trust them? Two is with Amazon, an international mega company with lots of power of its own to wield around. When these two entities get in bed together, the best you can hope for is a rivalry to end in a stalemate. But NY has a history of such dealings. IBM was always an anchor boon to NY, that is until it wasn’t. It would make periodic threats if not biannually about leaving and moving elsewhere. NY would then engage in bribing them to stay. So it went back and forth for years. As long as IBM remained in the state, it could be considered a win for NY. Until the day IBM finally did leave, anyway.

This is the thing about those kinds of deals, they are always up to the parties involved to continue this quasi-relationship, or cut it off. And a corporation, unlike the state, has the ability to pick up and leave whatever its reasons are. This must be taken into consideration when navigating such arrangements. Is it temporary? They may as well be considered temporary with that in mind.

I think what Bezos might be coming to grips with now is the consequences of the will of the people. When that starts to have an effect on your business, you have to question what it is you are doing to aggravate those reactions. For Amazon’s part, it seems they were going to leave it up to the Governor or state lawmakers to sell the deal. With Cuomo, he apparently was leaving it up to Amazon to ‘bring the people along.’ It appears both failed their mission. Had it been a great arrangement, the problem would have been solved.

You have to wonder just what Cuomo was thinking all along? He engaged in the secret negotiation. Did he not consider how others would interpret the deal? Therein is the other fatal flaw. That is to allow others to interpret, or define, the deal. Cuomo was prepared for neither. Then he fumbled it off to Amazon as if he had nothing to do with it.

What obviously seemed to be cut out of the deal on Cuomo’s part was the will of the people. Couple that with how much people distrust politicians, and their motives, now and you have a Molotov cocktail. Of course Cuomo being a particularly slimy politician as well.

Right Ring | Bullright

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