Amazon Hub in Newark is canceled after the subject of unions and local groups

For the second time, Amazon’s plans to dramatically expand its presence in the New York area were scrapped after labor and community gro...


For the second time, Amazon’s plans to dramatically expand its presence in the New York area were scrapped after labor and community groups rallied in opposition.

In 2019, Amazon abruptly canceled plans to build a second headquarters in New York after facing a barrage of criticism he hadn’t anticipated. This time, the e-commerce giant was unable to strike a deal for a cargo hub at Newark Liberty International Airport.

The project, which was based on a 20-year lease worth hundreds of millions of dollars, sparked opposition after the Port Authority revealed it last summer.

“Unfortunately, the Port Authority and Amazon have been unable to come to an agreement on the final terms of the lease and have mutually concluded that further negotiations will not resolve the outstanding issues,” said Huntley Lawrence, Director of the operation of the Port Authority, in a press release on Thursday.

Advocacy groups and unions involved had said they could not support the lease unless Amazon made a concessions package that included labor agreements and a zero-emissions benchmark at the facility.

“This win signals that if Amazon wants to continue to grow in New Jersey, it will have to do so on our terms,” ​​said Sara Cullinane, director of Make the Road New Jersey, an advocacy group that had questioned the OK.

Amazon, who confidence expressed in May that the deal would close, expressed disappointment in a statement, adding that “we are proud of our strong presence in New Jersey and look forward to continued investment in the state.”

Amazon had estimated that the project would create more than 1,000 jobs, although many of those jobs could still be created if the Port Authority awards the lease to another company. Two other companies bid on the project.

“Growth in air cargo and redevelopment of airport facilities in a way that benefits the region as well as the local community remains a top priority for the Port Authority,” added Mr. Lawrence, Chief Operating Officer. , in its press release.

The biggest long-term impact could be on Amazon’s ability to deliver packages efficiently in the Northeast, with which it serves airport hubs near Allentown, Pennsylvania; Hartford, Connecticut; and Baltimore. “Newark was the obvious choice,” said Marc Wulfraat, an industry consultant who closely follows Amazon installations. “It’s right there, at the gates of New York.”

Mr. Wulfraat said Amazon could look for other commercial airports in the region, even if their locations were less than ideal, to accommodate the growing volume of packages.

It was partly the company’s notoriety in the state that sparked opposition to the project. A report produced by groups seeking to block it pointed out that the number of Amazon facilities in New Jersey grew to 49 between 2013 and 2020, helping to nearly triple the number of warehouse workers in the state. , to about 70,000. During the same period, the average salary of these workers fell to about $44,000 a year from more than $53,000 a year, adjusting for inflation, according to Department data. work.

New Jersey is one of more unionized states in the country, while Amazon has opposed organizing efforts at its facilities.

Amazon said the average starting salary for its hourly workers is over $18 nationwide. The median hourly wage in New Jersey was about $23 Last year. The company also cited its benefits, including comprehensive health coverage for full-time employees as soon as they start work; a 401(k) plan with 50% company ownership; and up to 20 weeks of paid parental leave.

The Port Authority revealed the proposed lease with Amazon in August, the day its board of directors voted to authorize the deal. The authority said it expected the lease to take effect on or around Nov. 1, according to the minutes of the meeting.

“It was something they were trying to slip through without letting the community know, which was quite unfortunate,” said Kim Gaddy, executive director of the South Ward Environmental Alliance, which focuses on environmental issues affecting residents of Newark.

Under the proposed agreementAmazon has tentatively pledged to invest $125 million to renovate two airport buildings and pay the port authority more than $300 million over 20 years, including $150 million upfront.

In September, groups led by Ms Cullinane and Ms Gaddy, along with other advocacy groups and unions like the Teamsters and the Retail, Wholesale and Department Store Union, began coordinating their opposition. The groups circulated petitions that garnered thousands of signatures from residents and held public events like rallies and a march.

The project appeared stalled after the November timetable for finalizing the lease passed without any announcement.

At the end of March, a spokeswoman for Governor Phil Murphy, who had originally rented the agreement, said in a statement that “the governor encourages everyone doing business in our state to work cooperatively with good faith union partners.” (The governor’s office declined to comment on Thursday.) Other politicians in the state appeared to become skeptical after the Amazon Labor Union’s election victory this year at a Staten Island warehouse, a result Amazon disputes.

Amazon has opened airline hubs in recent years to move products through its own logistics network, rather than relying on outside suppliers. He prefers to fulfill customer orders with local inventory, for cheaper and faster delivery, but when the product a customer wants isn’t in a nearby warehouse, he’ll fly it to fulfill his promises of dispatch.

The expansion of its operations accelerated during the pandemic as e-commerce sales soared. “We’ve doubled the capacity we’ve built in Amazon’s first 25 years in just 24 months,” chief executive Andy Jassy told investors in May.

But the company admitted that it had built too many buildings, had expanded and was hiring more than required demand, and in April it job its first quarterly loss since 2015. This year, Amazon pulled out of some investments. “We’re trying to defer construction activity on properties where we just don’t need the capacity yet, and we’re also going to let some leases expire,” Jassy said.

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Newsrust - US Top News: Amazon Hub in Newark is canceled after the subject of unions and local groups
Amazon Hub in Newark is canceled after the subject of unions and local groups
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