Amazon offers 'great potential for growth'

Amazon offers 'great potential for growth'

December 2nd, 2010 by Mike Pare in News

Staff Photo by Dan Henry/Chattanooga Times Free Press The proposed site for Amazon's 1 million-square-foot distribution center at Enterprise South.

With Amazon.com ranked as the top consumer website on this week's Cyber Monday, Hamilton and Bradley counties will link to a company with a bright future if the online retailer builds two distribution centers in the area, officials say.

"It's a good solid company that has a lot of great potential for growth," said Brad Eilts, an economic development official in Montgomery County, Kan., where Amazon has had a 1.4 million-square-foot center since the mid-1990s.

Buddy Rizer, an economic developer in Loudoun County, Va., said Amazon already has distribution and data centers there and plans to invest $60 million in a next-generation data center.

"They have a very significant footprint," Rizer said.

Fred Kiga, Amazon's director of policy, said Wednesday that the company's two local facilities - both 1 million square feet - could be up by Christmas 2011.

Applications to work at the centers could be taken by mid-2011, he said. Amazon, which runs more than 20 distribution centers nationwide, would seek people with high school or graduate-equivalency degrees for most jobs, he said.

While the vast majority would be warehouse posts, about 10 percent will require higher skills, the official said.

A majority of those hired at the centers would start at more than $10 an hour, Kiga said. For permanent employees, Amazon offers variable cash pay for performance and they're entitled to restricted stock units, he said.

Amazon is looking to employ more than 1,400 full-time workers and potentially more than 2,000 part-time or seasonal employees, and would invest upward of $165 million in the two centers, officials said. Most of those hired to staff the new complex would be local hires, Kiga said.

"There will be some senior folks that come from the distribution network to train people how these centers work," he said.

Technology is key

The new centers would hold "the latest in technologies" in material handling, sorting and order shipments, Kiga said.

"This represents one of the new wave of fulfillment centers that we have," he said.

The Chattanooga location would be one of Amazon's more technologically advanced in terms of design, size and computer software, Kiga said.

"It allows us to handle many more items per hour per employee," he said.

Kiga said the new Southeast Tennessee centers will expand Amazon's presence in the region, but the facilities could handle some products shipped nationwide.

The Hamilton County site would be considered a sortable facility and the Bradley site will include large items that are not as easily maneuverable into packages, Kiga said. The Bradley center would be less automated and have only about one-fifth as many employees, he said.

Chattanooga Mayor Ron Littlefield said distribution is an important economic niche for the region.

"It adds dimension and strength to our economy," he said.

Hamilton County Mayor Claude Ramsey said he's hopeful the final details on the project soon will be finished, calling it "a very positive step."

Trevor Hamilton, the Chattanooga Area Chamber of Commerce's vice president of economic development, said Amazon has experienced "phenomenal growth" and is a Fortune 500 business. He said he hoped ground will be broken soon at the Enterprise South industrial park site.

The local centers would expand Amazon's distribution locations in the Southeast beyond existing facilities in Kentucky and Virginia. In 1999, Amazon opened what was then its biggest distribution center in the Atlanta suburb of McDonough, Ga., but the 800,000-square-foot facility closed after business slumped following the 9/11 attacks two years later.

Work campers

Eilts, who directs the Montgomery County Action Council in Kansas, said Amazon employs about 650 people full-time there and up to 1,600 during the peak holiday season.

During the season, a couple of hundred "work campers" who live in parklike sites for recreational vehicles are employed by the company, he said.

Kiga discounted using worker campers here, saying they're used in locations where labor is short. He cited work force availability and closeness to Amazon's markets as key reasons why the company is eyeing the Chattanooga area.

Still, an Ooltewah group is concerned the company will bring in work campers and put them in Hamilton County.

John Harris of Ooltewah Citizens for Responsible Growth said he's not opposed to Amazon, but he has heard it plans to use work campers at all its facilities.

Harris wondered why Amazon wouldn't use local employees, and he called for that provision to be put into agreements between the company and local governments.

"We better understand what kind of neighbors and employers they're going to be," he said.