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3 Reasons a Detroit Move benefits Amazon.com, Inc. (AMZN) Stock By Will Ashworth

If there’s a city in America with a population over 50,000 that hasn’t made a bid to woo Amazon.com, Inc. (NASDAQ:AMZN), I’d be shocked. However, a successful bid by Detroit is good for a lot of different stakeholders including those who own AMZN stock. 

 

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Here’s why.

If You Build It, They Will Come

Jeff Bezos might have transformed the retail industry, but that’s not nearly as good a legacy as say, revitalizing America’s once-greatest industrial city.

Many of our readers might remember a time when Detroit was at the top of the pecking order of American cities. In 1940, Detroit was the fourth-largest city in the U.S. by population behind only New York, Chicago, and Philadelphia in that order. In fact, Detroit’s population peaked at 1.8 million in 1950; today, it’s one-third that.

Amazingly, Detroit in 2016, wasn’t in the top 20 most populous U.S. cities (it was 21st) for the first time since 1850. Abraham Lincoln had just left the House of Representatives in Washington and was practicing law in Springfield, Illinois.

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However, on a metropolitan basis, Detroit ranks 14th in the nation at 4.3 million, so it’s got plenty of people available to take up the Amazon cause.

Dan Gilbert owns Quicken Loans and Rock Ventures. Also, he owns the Cleveland Cavaliers. He’s a billionaire who knows how to get things done. Born and bred in Michigan, I don’t think the city’s bid could be led more a capable leader.

“The fact that we can give them real estate that they need with a concentration of ownership,” stated Gilbert October 20 in an Associated Press interview talking about Detroit’s bid. “If you go to some other urban cores because they’re built up already, it’s hard to cobble together 8 million square feet. We can give them that with existing and proposed space.”

A lot of reasons have been given by experts why Detroit isn’t in contention. I think that’s bunk. The real estate angle alone puts the city in the top 10 in my opinion. We’ll see sometime in 2018.

Canada Part of the Package

In September when Amazon’s list of requirements came out, I immediately pegged Boston, Toronto, and Atlanta as the only three choices Amazon should consider. However, the more I consider Detroit’s bid, the more I realize that building a community of 50,000 people takes ready-made land, a feature that Boston and Toronto lack to a certain extent.

 

Detroit’s bid in conjunction with Windsor, the Canadian city right across the river from Gordie Howe’s old stomping grounds, gives Amazon a little more international flair without the expense of locating in Canada’s biggest and most expensive city.

“We feel like we have a lot of advantages,” Gilbert stated. “One of them is we’re proposing international headquarters on the border of two North American countries. We’ve got a hedge against any kind of immigration issues that might be on either side because you have two countries. You also have a huge, deep talent base in Canada and special universities.”

Amazon already has a decent-sized Canadian operation in the Toronto-area, so it is more than familiar with Canadian laws, etc.

Not many companies can claim to have a head office in two countries. Canada is America’s largest trading partner. A dual-country bid makes a lot of sense in my opinion. It would definitely light a fire under AMZN stock.

Mark Wahlberg 

It’s interesting that Mark Wahlberg’s on the Detroit bandwagon, but heck, why not?

There’s a Wahlburgers restaurant in the city and another one on the way. Not to mention they film the Transformer movies in Detroit, so he’s gotten very familiar with all the good things it has to offer despite hailing from Boston.

“There’s so many talented people here. It’s great to bring these jobs and opportunities here,” Wahlberg told the press on a surprise visit to the Detroit Wahlburgers. “You have so many wonderful locations, you know, there’s so much space and places, it’s beautiful.”

Of course, he’s going to say nice things about Detroit. That’s where he earns much of income. However, it was his reference to the Motor City that makes me think his words are genuine.

“Jeff Bezos, come on, buddy. This is the home of American industrial,” Wahlberg said. “Come to Michigan.”

I’m pretty sure he meant “industry, ” but you get the meaning.

Wahlberg’s right.

If Bezos wants to make a statement about American ingenuity, Detroit is the place to go.

Bottom line on AMZN Stock

The more I read Dan Gilbert’s message, the more I see the potential of Detroit/Windsor bid. It might not be the most glamorous, but it’s the most forward thinking.

 

If you own AMZN stock, you ought to be excited about the potential of Detroit winning the bid. It could add billions to the company’s market cap.

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