Amazon H2

From Tokyo, Japan and Auckland, New Zealand, this is Down to Business English, with your hosts Git Montreux and Samantha Vega.

Good to be speaking with you again.

Good to be speaking with you too, Skip. It's been a little while since the two of us have met up for D2B.

It sure has. How are things going for you over there in New Zealand?

I don't know. Pretty well, I suppose. Keeping busy with work and life. Can't complain.

Good to hear.

What about you? You had an extra long golden week in Japan.

Yes, we did. The government added an extra three national holidays to Golden Week this year to celebrate the ascension of their new emperor and the beginning of the new imperial era.

A new emperor. And what's his name?

And the new era name is Ray Wal.

What does that translate?

You know my understanding is that Rewa means beautiful peace or beautiful harmony.

Mm, that's nice. And exactly how many days did you have off for Golden Week?

It was a total of ten. So that was kind of nice.

Did you travel anywhere?

Oh no. It's too busy to travel during Golden Week. No, I basically stayed put in my house, got on D2B and relaxed.

That's good. So when you say Japan has entered a new era, what does that mean?

Well, Japan uses both the Gregorian calendar and an imperial calendar. The imperial calendar restarts every time a new emperor ascends to the throne. The length of that emperor's reign is referred to as an era. So for example, The thirty first year of the Heisei era ended on april thirtieth, and the first year of the new Rewa era started on May 1st.

So does that mean New Year's Eve in Japan next year will be April 30th?

Oh no, it's still december thirty first. Heise thirty one will only be four months long, and Rewa We'll only be eight months long.

Oh boy, that sounds confusing.

It's not as bad as it seems.

Well, congratulations to Japan and their new emperor, Narohito, on entering a new era.

No. As interesting as the new era may be, we are gonna be talking about a business story that played out over the last 18 months or so in the US. Today I'd like to talk about Amazon's search for a home for its second headquarters, commonly referred to as Amazon H2.

Didn't they announce that they were going to open it in New York City but at the last minute decided to get it?

That is the ending of the story, yes, but how they got to that point is quite interesting.

Okay, let's do it. Let's get D2B. Down to business with Amazon H2. How did the retail giant go about choosing the new location for their new headquarters?

If my memory serves me, you and Des covered Amazon in a D two B episode in the past, is that right?

Yes, that was D2B100, way back in December 2016. In that report, we talked about how the company got started and how they evolved into the huge online retailer they are today. It would be worthwhile for listeners to go back and give that episode a listen.

And didn't Jeff Bezos, Amazon's founder and CEO, originally work in finance in New York when he came up with the idea of Amazon?

He did indeed. But New York City was way too expensive for a startup company, so he packed up his family and made the move to Seattle, Washington, all the way on the other side of the country.

And that is where Amazon currently has their headquarters, Seattle. Why do they want to move?

Oh, they're staying in Seattle, but they have grown so big that they could really use a second HQ. I also think they don't want to become too beholden to the city of Seattle.

What do you mean?

Well, early last year, the city government tried to enact a two hundred and seventy five dollars head tax on each of Amazon's employees. They wanted to use that money to provide housing for homeless people in the city.

Well that sounds like a good idea.

Not a good idea for Amazon. They fought very hard against that tax and in the end it didn't go through. But I think it motivated Amazon to start looking harder for other, friendlier places to expand their operations.

Is that when they decided to start looking for another home?

Actually no, their search started just a little before that in september twenty seventeen. That's when they announced that they were accepting applications from candidate cities across North America who could meet their search criteria.

So Amazon had specific requirements that they wanted in a new home.

They listed four what they referred to as decision drivers that a city would need to fulfill in order to be considered.

And they were

The first decision driver was that the city needed to have a population of over a million people. Fair enough. And the second one, the city needed to be able to attract technically talented people.

What exactly does that mean?

Well, this second headquarters is not just a warehouse full of books. It would be the home to IT specialists. So the living standards of the city would need to be on par with places like San Francisco and Silicon Valley in order to lure talent like that to move.

I see.

I guess it would be a little hard to hire someone who is accustomed to the lifestyle of Silicon Valley and convince them to move to small town USA.

No doubt.

What else was on that list?

The third and fourth decision drivers were a little bit more subjective. The candidate city needed to be business friendly and be able to think big and creatively when it came to real estate and locations.

Hm, to me that sounds like Amazon was looking for a city that would basically say yes to anything that they asked for.

I completely agree. It also makes it sound like Amazon was looking for the best possible deal in terms of tax breaks and incentives.

And what was Amazon bringing to the table? Why would a city be interested in having Amazon open their HQ in their community?

Very good question. Amazon was promising that they would bring 50,000 jobs over a 10-year period to the winning city.

On top of that, you can see

They would be making a capital investment in the area of five billion dollars.

By capital investment you mean that they would be spending that money on buying property and constructing new facilities.

That's right.

And fifty thousand jobs would seriously stimulate the local economy.

It certainly would. And since those jobs are IT skill related, Amazon was claiming that the majority of them would be six figure salaries.

Wow, I should have gone into computer science.

I know the field.

So obviously there were major benefits for the city that was eventually chosen. There must have been loads of applications.

There were.

That many cities could live up to Amazon's decision drivers?

I guess so. Bidding cities were tripping over themselves trying to get Amazon's attention. One city, Stonecrest, Georgia, even offered to change their name to Amazon if they were chosen.

Uh kind of a cool offer.

Unfortunately, they didn't make the cut. In January of twenty eighteen, Amazon released a shortlist of twenty cities, and Stonecrest was not on it.

Who made it?

Predominantly big cities. Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Washington D C and even the big apple, New York City, just to list a few.

Yeah, those are all recognizable places. So what was the next step in the process once the shortlist was announced?

What happened next was Amazon spent the spring and summer last year sending out evaluation teams to each city to listen to their proposals firsthand.

In other words, a lot of local politicians started handing out tax incentives.

Pretty much. And this is when critics started to complain that the whole process was just turning into a race to the bottom.

Sure, I can imagine Amazon could just sit back and let cities undercut each other in terms of what kind of tax incentives that they could offer.

No figures were released, but yes, that is the assumption.

Anyway.

In November last year the big announcement was made. After all the hooplaw, Amazon announced that they would split the headquarters between two cities, New York and Ardington, Virginia.

Which is just outside of Washington D C.

That's right. And it also happens to be the home of Jeff Bezos' other big investment. Do you know what that is?

Yes, I do. He bought the Washington Post newspaper five or six years ago. And I think I read somewhere that he also bought the most expensive home in DC as well.

That's right. Washington, DC is basically the man's second home.

The losing cities must have felt pretty burned by that. They were probably going to go with those cities all along.

Oh a lot of people are saying that.

You have to admit though, it's a pretty good strategy.

True, but a lot of New York residents were not happy, and within a few weeks of the announcement, New Yorkers were organizing protests against the deal.

Why would they be unhappy? Because they had to share the prize with another city? No.

No, no, not at all. They felt that the city and state governments had given away way too much for very little in return.

Very little. You said no figures were released. Do we know what New York offered?

Actually we do. We don't know what the shortlisted cities offered, but we do know that New York offered something around three billion dollars in tax breaks.

Three billion dollars in exchange for the economic stimulus of fifty thousand jobs, and five billion in capital investment. It doesn't sound too bad.

But don't forget that New York splits that with Washington, DC. So they would only be getting half of those figures.

Well maybe it's not that great then.

As one politician put it, New York creates twenty five thousand jobs on its own over a ten year period, just through normal growth. There was no need to give excessive tax breaks to a multi billion dollar corporation.

And I suppose that when a big company brings a lot of high paying jobs to town, it really pushes up the price of housing. Just look at how Google and Apple have impacted San Francisco and Silicon Valley.

That too added to the controversy. Enough people were upset about it that they started protesting outside of City Hall, and the whole issue got a lot of media attention.

I bet ya Amazon did not like that.

Not in the least. On February fourteenth, this year, Amazon suddenly pulled out of the deal by issuing a public statement that simply read A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.

Really? They didn't try to renegotiate a new deal that was more acceptable to the public?

Nope, they just walked away.

On Valentine's Day no less. Like a scorned lover.

That's very funny. I didn't even think about that.

So where do things stand now? Did Amazon reopen the application process?

No, they have announced that for the time being they will not pursue another deal with a different city as they reconsider their plans.

What about Washington D C?

Oh in Washington, it's full steam ahead. Just last month, Amazon submitted building plans to the city to erect two twenty two story buildings. The blueprints call for something like sixty five thousand square feet of new office space.

I wonder if New York is regretting it now.

Samantha, do you know any actual New Yorkers? Somehow I highly doubt they are regretting it. Or at least they would never admit to regretting it.

I'm sure some of the cities on that short list, who were initially passed over, are on the phone to Amazon right now.

You might very well be right about that, Mr.

In any case, I think it's time for us to get D2V down to vocabulary.

Down to business English audio scripts are a great learning tool. Be sure to visit the D2B website and download your free audio script of today's podcast. Down to businessenglish dot com that's WWW dot down to businessenglish dot com.

The first word we are going to look at today is the adjective beholden.

That's a fairly formal word. True.

True, but I hear and use it quite a lot. When you are beholden to someone, you feel a sense of duty or responsibility toward that person, because they did or are doing something for you.

You owe them a favor.

Pretty much, yes. In the story, I commented that one reason Amazon decided to open a second headquarters in a different city was because they didn't want to be beholden to Seattle.

Amazon didn't want to owe Seattle any favors or to be dependent on them. If you ask me, it makes sense for a business not to be beholden to a single supplier or service provider.

And what makes you say that, Samantha?

Well obviously, if a company is beholden to a third party, they have to accept any change the supplier or provider makes, like a price hike, for example.

A very good point.

Now our use of beholden in the story was used in the negative, but it is often used in positive statements to show loyalty or respect. Skip, are you beholden to anyone?

Sure, I'm completely beholden to you and Des for all the time and effort you put into down to business English.

That's nice to hear. I hope it's not just an example.

Of course not. I'm being completely sincere.

Fair enough.

What's our next word?

Our next word is the spoken phrase I just used to respond to you. Fair enough.

Ha nice transition.

It was smooth, if I do say so myself.

Now when you say it is a spoken phrase, you mean it is only used in conversation, not in written English?

according to a dictionary, but I could easily see myself writing it in an informal email to a colleague.

And what exactly does it mean? Or how do you use it?

When you say fair enough, you are communicating you understand and agree with the information you just heard. In the story, Skip reported that Amazon required candidate cities to have a population of over one million.

And you reacted by saying, Fair enough.

Yes, I was communicating I thought the population requirement was reasonable. Listen to how Fair Enough is used in this conversation between a manager and a subordinate.

Hey boss, I have just finished writing up the reports about the business trip I took last week. If it's okay with you, I'd like to leave the office a little early today and go see a dentist.

Sure, but before you go, could you update your calendar so everyone knows you have left for the day?

Fair enough. I'll do that right now.

Quite a natural interaction. Let's move on.

Fair enough.

See, it is very useful. Do you have our next word?

I do. Next up is the idiom, to bring something to the table. When you bring something to the table, you are referring to a skill or a benefit that you bring into a partnership or into some kind of negotiations. The table being referred to is the conference table everyone is sitting at.

In the report, I asked Skip what Amazon was bringing to the table. In other words, what benefit were they offering to the city that would be chosen eventually?

Using down to business English as an example again, I could say that each of us brings something unique to the table. Des brings 30 years of teaching experience and tons of knowledge about investing and financial markets to the table. And Samantha? She brings her voice artist talent and audio expertise to the table.

And what about you, Skip? What do you bring to the D2B table?

Isn't it obvious? I bring my wit and charm to the table.

That isn't what initially comes to mind. I was thinking that you brought audio editing and tech skills to the table.

I suppose so. Do you have the next word?

Yes, I do. Our final item in D2V today is the expression, a six-figure salary. When you talk about a six figure salary, you're talking about a salary that is one hundred thousand to nine hundred ninety nine thousand.

Well that is quite a wide salary range.

It is, but each of those salaries have six digits or figures.

Regardless, anything in that range is a high salary.

And that is what you were communicating when you use this expression. Amazon claimed the jobs that they were creating would be six figure salaries. In other words, they were creating high paying jobs.

Some common six figure jobs would be doctors, lawyers, airline pilots, executive salespeople, and computer programmers or IT professionals. Notice that English teachers are not on that list.

I did notice that, yes. Neither are podcasters.

Great.

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Thanks for that report on Amazon Search for a second headquarters.

You are most welcome, Samantha. I hope our listeners found it of some interest.

I know I did. As I said at the beginning, I knew that they had walked out of the deal with New York, but I didn't know how that came about. It will be interesting to see if and when they choose another city.

City. Just before we finish today, I would like to take a moment to encourage listeners to consider signing up for a D2B membership.

Good idea.

If you find listening to Down to Business English useful in your English studies, I highly recommend becoming a D2B member. As a member, you can listen to members-only podcasts. You will have access to our entire audio script library of 160 episodes and counting. And when a new episode is released, we will send you the audio script to that show right to your inbox. Literally within minutes. Personally, I think it is one of the best membership benefits.

And in addition to all that, your membership will help us produce the show more regularly.

Absolutely. The more members we have, the more shows and other language learning products we can produce.

And how does one become a member exactly?

It's easy. Just visit the Down to Business English website at Downtobusinglish.com. Click on the members link at the top of the page and choose the plan that best fits your budget. Cool. Thanks for listening everyone. See you next time.

Take care.

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