The weekend passed quickly amidst media discussions about the sharp rise in Egret's stock on its first day of trading. As the new week began and the North American stock market opened, Egret's stock price continued its upward trend for three consecutive days, with its market value briefly exceeding $260 billion. The Nasdaq tech sector also continued to surge.
Then came October 12.
James Mann, a former employee at an Amazon logistics and distribution center in Wisconsin, suddenly filed a lawsuit with the local court. He accused the online retailer's team of using illegal means to prevent employees from forming a union to protect their legal rights, and of maliciously suppressing union advocates.
James Mann, 37, was hired last year as a sorter at Amazon's Wisconsin distribution center. In the public lawsuit, Mann claimed that because he actively advocated for the formation of a union among his coworkers, he was suppressed and eventually fired in June this year. He has been unemployed since then.
Mann demanded a formal written apology from Egret, insisted that they take responsibility for protecting workers' rights, and sought a total compensation of $16 million.
In an interview with a local television station, Mann also directed his accusations at Simon and Egret's leadership, criticizing the recent IPO for making many people billionaires and millionaires, while workers at the Wisconsin distribution center were stuck doing monotonous, repetitive work for $9 an hour—far lower than the $23 an hour he earned at his previous job at a General Motors plant.
Mann believed this stark inequity was mainly due to the severe suppression of unions by companies, preventing lower-level workers from securing their rights. During the interview, he called on his fellow workers to unite and form a union once again.
Egret's public relations team responded swiftly.
They quickly appeared on the same Wisconsin TV station to reveal the reasons for Mann's termination, which they stated had nothing to do with union activities. Instead, they pointed out that he had been fired for repeatedly mishandling customer packages. As evidence, the PR team broadcasted footage showing Mann aggressively throwing several packages onto a conveyor belt and even punching one of the boxes.
The team did not ignore the issue of unions or wages raised by Mann. They presented voting records from February of this year, which showed that out of more than 1,500 employees at the Wisconsin distribution center, only 21% voted in favor of forming a union, while 79% opposed it.
Additionally, they addressed the $9 hourly wage, noting that it was already 1.8 times Wisconsin's legal minimum wage of $5 per hour. This did not include the medical insurance and other benefits Egret provided, which, when factored in, raised the average wage to $13 per hour, placing it among the highest in the local industry.
As for Mann's nostalgic remarks about the high pay he once received at General Motors, they were completely ignored. Many in the Rust Belt fondly recall the era when the Great Lakes region was the center of the global auto industry, when one person's job could support an entire family. Few, however, are willing to reflect on how that era faded into history. Was it not the unions' endless demands that suffocated the auto companies?
At the time, ordinary factory workers were earning more than university professors. While this might have seemed fair, few questioned whether it was sustainable.
However, when the foundations collapse, what can possibly remain?
Mann quickly responded to Egret's clarification, claiming that the reason he lost his temper that day was because a supervisor had insulted him. He also released an audio recording, in which a male voice could be heard arguing with him about the number of bathroom breaks Mann had taken during his shift. Mann used this recording to further criticize the center for infringing on employees' basic human rights.
Egret promptly countered, asserting that the recording had been edited to distort the facts. According to other employees' recollections, Mann had frequently left his station to use the restroom, going four times in a single morning. Several coworkers claimed that instead of addressing a physical need, he was sneaking off to smoke, clearly shirking his duties.
Mann immediately fired back, denying the accusations of smoking and claiming that he had been ill at the time.
Back and forth it went.
This kind of dispute was unlikely to be resolved quickly and would likely drag on for a long time. With Egret's formidable legal team, they were in no hurry; they would respond blow by blow.
Simon never believed that such incidents happened without reason.
This time was no exception.
After some investigation, it quickly became clear that the Wisconsin law firm supporting James Mann's lawsuit had a partner who happened to be the husband of an assistant to Craig Ames, a Democratic senator who lost his seat in last year's midterm elections.
It might seem like a convoluted connection, but it became clear upon further scrutiny.
The most likely motivation for this sudden lawsuit was to prepare for next year's elections. 1996 would not only be a presidential election year but also a time for congressional elections, held every two years.
The Wisconsin Democrats were clearly hoping to regain the advantage they lost in last year's midterms.
Senators serve six-year terms.
Robert Holtwell, who defeated Craig Ames last year, was still securely in his seat, and the other senator's term was not up for election. So, the Democrats were pinning their hopes on the House races, which happen every two years. Additionally, in the 1992 election, Clinton had secured Wisconsin's 10 electoral votes, a significant number. Stirring up some trouble now was likely aimed at rallying public support from the working class to secure this voter base.
The labor unions in the Rust Belt had always been staunch supporters of the Democratic Party.
As for the Clintons' ethics, they were willing to do whatever it took to win the White House.
Simon believed that this lawsuit was just an appetizer.
The Westeros system had grown beyond merely standing out from the crowd; it had become a towering giant on a flat plain, drawing attention from all directions.
Sure enough, after the lawsuit was filed, the next weekend passed, and on October 16, over 200 truck drivers from three contractors responsible for transporting goods for the Wisconsin distribution center suddenly went on strike, crippling the center's operations.
Strikes typically occur after negotiations between employees and employers break down.
This time, however, it came as a complete surprise.
It was a sudden assault.
Soon, the media reported that one of the truck drivers was dissatisfied with the company's handling of a traffic accident that had dragged on for over a month. In response, the American Trucking Union decided to bypass the contractors and directly target Egret, demanding that Egret abandon its contractor model and establish its own in-house transportation department to employ the drivers directly.
If last week's lawsuit had merely curbed the rise of Egret's stock price, this sudden strike by the truck drivers, which paralyzed a large distribution center, was a much more direct hit.
The interests at stake were highly complex.
Political factors and the short-sellers planning to bet against the Westeros tech stocks aside, the situation itself was a tangled mess.
The issue stemmed from Amazon's logistics and distribution system.
At this stage, Amazon's logistics network was only in its early phases. The distribution centers across the U.S. only handled the first stage of shipping, delivering packages from Amazon's warehouses to contracted shipping companies, rather than directly to customers.
Because traditional U.S. shipping companies were both expensive and slow, Amazon handled the first stage of delivery to improve efficiency, reduce shipping times, and lower costs. After completing the first stage, companies like USPS would take over and deliver packages to the final destination using their extensive nationwide networks.
Amazon's current logistics system was designed to avoid entanglements with the powerful American Trucking Union by outsourcing its transportation needs to a number of small trucking companies instead of creating its own fleet.
This strategy was one that Simon had devised personally, based on his memory of Amazon's operational model.
The logistics center workers were part of a new type of workforce, without the backing of an established union. Thus, preventing them from forming a union was relatively simple.
The American Trucking Union, however, was an old and well-established organization, akin to the United Auto Workers, with a membership of 1.4 million—larger than the rapidly declining UAW.
E-commerce businesses would always rely heavily on trucking, which handled over 70% of domestic freight in the U.S.
So, a workaround was necessary.
Adding a layer of contractors would increase costs to some extent, but using many independent small trucking companies as a buffer allowed Egret to avoid direct contact with the trucking union, saving more in the long run.
If Egret established its own transport division and directly hired drivers, as its e-commerce business grew, the tens of thousands of drivers in its logistics network, backed by the union, would become Egret's nightmare. This would be as damaging as the United Auto Workers had been to America's automotive giants.
The inefficiency of U.S. government agencies—memorialized in the slothful sloth character in Zootopia—the poor service of U.S. airlines, where incidents of violence against passengers are not uncommon, and the endless delays in city infrastructure projects—all stem from the overwhelming power of unions.
They are untouchable.
While America's automotive giants can still outsource their factories overseas to cut costs and stay afloat, Egret's e-commerce business has no such option. If they agreed to the trucking union's demands and created a transport division, union-backed drivers would demand high wages, generous benefits, and work at a snail's pace. At that point, Egret's Amazon online marketplace would no longer be viable.
There is never a shortage of clever people in the world.
Egret's outsourcing strategy was not subtle, and the American Trucking Union, seeing that its members couldn't get leverage over the small trucking
companies, turned its attention to Egret, fresh off its IPO and flush with cash. Naturally, they were tempted to go after the big fish.
This sudden action was clearly a test.
If Egret compromised in Wisconsin, it would set a dangerous precedent. Once a large number of truck drivers shifted from being contractors to full-time Egret employees, the American Trucking Union would have Egret in its grasp.
Both sides were fully aware of each other's intentions. The trucking union launched a surprise strike, and Egret responded decisively. Its executives knew that if they caved to the union's demands, the consequences would be dire. As a result, they swiftly suspended operations at the Wisconsin distribution center.
Then came the war of words.
Egret had the moral high ground in this dispute, as the trucking union had called the strike without any prior communication.
However, the union wanted to bypass the contractors and deal directly with Egret. Egret refused to engage, publicly criticizing the trucking union for its reckless and dishonest behavior, gaining public support. At the same time, Egret announced that it would pursue compensation from the three contractors for the losses caused by the strike.
Egret didn't even acknowledge the union's demand to create an internal transport division, refusing to entertain the idea. Instead, they urged the trucking union and the contractors to resolve their differences quickly.
The Wisconsin distribution center mainly served five states in the Midwest.
While it suspended operations, Amazon immediately shifted the workload to other centers to minimize the impact. At the same time, they launched a media campaign in Wisconsin, stating that if the distribution center remained closed for more than two weeks, other centers would permanently take over its operations, resulting in layoffs at the Wisconsin site.
The striking truck drivers would be blacklisted by Egret.
When this news spread, many people were stunned.
Wisconsin, part of the Rust Belt, already had one of the highest unemployment rates in the country. Recent efforts had brought it down from 8.6% two years ago to 6.1%, but it was still above the national average of 5.6%.
Jobs at Amazon's distribution centers, which required few qualifications but offered decent pay, were highly sought after. Otherwise, despite some official lobbying, only 21% of workers would have voted in favor of forming a union earlier this year.
The $9 hourly wage had been personally set by Simon. Initially, his housekeeper had proposed a wage of just $7.
Throughout the entire Westeros system, Simon had been intentional about offering relatively generous compensation to cultivate a sense of loyalty and belonging among employees. He believed that fair compensation could motivate employees and foster a deep sense of loyalty and commitment.
In addition to decent wages, the schools attended by the children of Wisconsin distribution center employees had received special attention from the Westeros Foundation over the past year. In the future, the children of "Westerosians" would have even more opportunities to climb the ladder of success.
Still, while the wages were relatively high, they weren't excessive. Simon was not going to let unions manipulate or coerce him.
If Simon wasn't willing to give in, no one would be able to take from him.
At the same time, the trucking union's attack on Egret's e-commerce operations, along with other lurking forces, was having an immediate impact.
On October 16, Egret's stock price fell by 2.1%. Over the following days, the stock continued to fluctuate and dropped by more than 3%. By the time the strike ended on October 20, Egret's stock had fallen by 6.2%. By the close of trading on Friday, Egret's market value had dropped from $253.7 billion at the beginning of the week to $237.9 billion—a paper loss of over $15 billion.
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