Opposites repel: Amazon and NYC were never meant to be

If you take extreme actions, you might get extreme results and not always the results you want. Just ask the activists in New York who sent Amazon packing or the jilted Amazon executives who have beaten a hasty retreat.

Amazon ran a bizarre, extreme search for its second headquarters (HQ2). It was a cross between a 20-ring circus and “Fear Factor,” the television show in which contestants ate live bugs in order to move to the next round. 

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The city council of Stonecrest, Ga. wanted to create a city called Amazon for the company. New York Governor Andrew Cuomo (D) said he would change his name to “Amazon Cuomo” if the company picked New York. 

Cities outdid each other with extremely rich offers. New York’s offer was impressive enough to move the city from being a surprise contender to being a co-winner.

It also was extreme enough to rile up politicians and community and labor leaders. Some of them objected to the package; some objected to the company’s stance on unions; and some objected to the fact that the company’s founder is fabulously rich.

The size of the deal New York offered, Amazon’s attitude that “we have the jobs and you will have to pay for them,” and the secrecy of the negotiations gave the extreme anti-Amazon, anti-business activists of New York a present. 

It gave them broader support than they or Amazon expected. Amazon expected opposition from extremists, but it miscalculated how its own extremism would move leaders who would have been moderately opposed to a merely rich deal to support the more-extreme activists.

Amazon isn’t the only one who miscalculated. The moderates who lent their support to the more-extreme opponents miscalculated. They expected Amazon to react by renegotiating the deal. In New York culture, a deal is just a step toward negotiating a better deal. 

The moderates didn’t expect or want to lose the jobs at Amazon plus the jobs at the restaurants and other businesses that would have served Amazon and its employees.

If this were a romantic comedy, Meg Ryan and Tom Hanks would get back together. Amazon and New York probably will not because this isn’t a movie and Amazon doesn’t need New York. No authentic New Yorker will concede that any place can match his or her city, but for what Amazon needs, there are other places that will do just as well. 

And, New York’s activists didn’t just say they wanted to break up. They hurled demagogue-like insults. There are names you can call someone and get back together. There are other names you cannot. New York has as much chance of getting back together with Amazon as Nicolas Maduro has of getting together with Donald TrumpDonald John TrumpA better VA, with mental health services, is essential for America's veterans Pelosi, Nadler tangle on impeachment, contempt vote Trump arrives in Japan to kick off 4-day state visit MORE.

There probably will be no reconciliation, but there already is plenty of claim and blame. The more extreme activists are crowing about what they claim is a precedent-setting victory. They are celebrating their success in blocking the Amazon invasion and tax breaks. (And in blocking the 25,000 largely non-union jobs.) They claim they have taught companies a lesson.

The moderate opponents blame Amazon for not re-negotiating and for not understanding New York culture. They expected Amazon to take the demands and scathing insults as an invitation to come to the table. 

If Amazon didn’t understand New York culture, the New Yorkers did not understand non-New Yorker culture of negotiating without public insults and positions extreme enough to make the other side believe there is no possibility of a mutually acceptable result.

At least it was a learning experience. The extreme activists learned they can get what they want by being extreme and extremely loud. The moderates should have learned to be careful about picking their allies. 

Companies like Amazon should have learned that cities want good jobs, but nobody wants to submit to a humiliating process and an extreme deal. 

Companies should compare the Amazon episode to Google’s approach to New York and its smoother experience (although the activists who consider the Amazon episode a victory may now turn their sights on Google).

Amazon and New York were not just a surprise couple. They were a couple that wasn’t meant to be. They are too extreme for each other.

Erik Gordon is a clinical assistant professor at the University of Michigan's Ross School of Business.