Golden State FC LLC a wholly owned subsidiary of Amazon.com, Inc.
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1 Training Proposal for: Golden State FC LLC a wholly owned subsidiary of Amazon.com, Inc. Agreement Number: ET Panel Meeting of: August 23, 2013 ETP Regional Office: Sacramento Analyst: W. Atkinson PROJECT PROFILE Contract Attributes: Job Creation Initiative Critical Proposal Industry Sector(s): Warehousing Goods Movement Counties Served: San Joaquin, Stanislaus Priority Industry: Yes No Repeat Contractor: Yes No Union(s): Yes No Number of Employees in: CA: 3,000 U.S.:50,000 Worldwide: 88,400 Turnover Rate: 0% Managers/Supervisors: (% of total trainees) FUNDING DETAIL 0% Program Costs - (Substantial Contribution) (High Earner Reduction) = Total ETP Funding $2,000,000 $0 $0 $2,000,000 In-Kind Contribution: 100% of Total ETP Funding Required $3,024,000 ETP Single (08/16/12) 1 of 4
2 TRAINING PLAN TABLE Job No. Job Description Type of Training 1 Retrainee Critical Proposal Job Creation Initiative Commercial Skills, Computer Skills, PL-Commercial Skills Estimated Range of Average Post- No. of Hours Cost per Retention Trainees Class / CBT Trainee Wage Lab $3,200 $13.50 Weighted Avg: 160 Minimum Wage by County: Job Number 1: $12.02 for San Joaquin and Stanislaus Counties. Health Benefits: Yes No This is employer share of cost for healthcare premiums medical, dental, vision. Used to meet the Post-Retention Wage?: Yes No Maybe Although employer provides health benefits, it is not being used to meet Post-Retention Wage. Occupation Titles Wage Range by Occupation Wage Range Estimated # of Trainees Shipping/Receiving Staff 400 Process Guide 75 Process Assistant 75 Problem Solver 75 OVERVIEW In this proposal, Golden State FC LLC a wholly owned subsidiary of Amazon.com, Inc.(Golden State) seeks funding for retraining as outlined below: Amazon.com, Inc. (Amazon) and its subsidiaries operate retail websites through which they sell goods purchased for resale from vendors and other goods from third-party sellers. To fulfill customer orders, Amazon depends on its global network of warehouses to fulfill orders. Golden State operates a number of these warehouses (fulfillment centers), 3 in California. A fulfillment center has already been established in San Bernardino and two are opening in Patterson and Tracy, respectively. Only Patterson and Tracy facilities will participate under this proposal. This is a Critical Proposal as designated by the Governor s Office for Business and Economic Development. Golden State is asking for an exemption to the $1,500,000 funding cap for Critical Proposals the company is opening two new facilities and hiring all new staff that require extensive training on production methods. Although Golden State intends to hire 900 new hires, the company is only seeking ETP funding for 625 new hires. PROJECT DETAILS Need for Training Amazon s North American revenue growth was 30% in 2012 and 43% To accommodate this growth, Amazon must increase the scale and speed of its order fulfillment network. Golden State s two new facilities in Patterson and Tracy will help meet Amazon s increasing customer demand in California and the West. ETP Single (08/16/12) 2 of 4
3 Golden State intends to hire 900 full-time employees in 2013, 300 at their Patterson facility and 600 at their Tracy facility. Golden State has invested $75M - $100M to equip the Patterson and Tracy facilities. Trainees will learn proper skills to safely and efficiently meet high productivity standards required of Amazon to remain competitive. Amazon training programs are standardized company-wide but allow for reasonable variation to meet specific facility needs. High Unemployment Area The 625 trainees in Job Number 1 work in a High Unemployment Area (HUA). This is a region with unemployment exceeding the state average by at least 15%. Golden State s locations in San Joaquin and Stanislaus counties qualify for HUA status under these standards. However, the Company is not asking for a wage modification. Other Resources Golden State is pursuing an OJT grant funded by the Department of Labor for the Tracy and Patterson facilities for approximately 75 to 150 trainees. However, these monies will not defray any of the training outlined in this proposal. Training hours for employees receiving OJT reimbursement will not be submitted for ETP training reimbursement. Retrainee - Job Creation In support of job creation, training for newly-hired employees will be reimbursed at a higher rate and trainees will be subject to a lower post-retention wage. Golden State has committed to hiring 625 new employees. To be eligible for reimbursement, trainees must be hired within the three-month period prior to Panel approval or during the term of contract. LMS Staff has approved Golden State s use of a Learning Management System (LMS) for recordkeeping. Training Plan Commercial Skills (2.5%) All occupations will receive commercial skills training. Trainees will become familiar with the tools used to complete their new jobs including scanner guns, carts, totes, tape machines, packing supplies, conveyance systems, pallet jacks, safety knives etc. Process flow for each job function is covered using step by step demonstrations. Trainees will also receive training on Powered Industrial Trucks (PIT) including forklifts and reach trucks. All commercial skills training include discussions and demonstrations of standard work, with special emphasis on safe behaviors to help avoid injuries. Computer Skills - (2.5%) All occupations will receive computer skills training, on applications that direct them in the performance of their functions. Trainees will learn to log in, open correct application(s), follow instructions given by the application and enter required inputs as they work, and troubleshoot common problems. Productive Lab (95%) Commercial Skills Productive Laboratory (PL) trainees may produce goods for profit as part of the training, in the courses identified under the Curriculum, with no more than 10 trainees per instructor. The instructor must be dedicated to training delivery during all hours of training. ETP Single (08/16/12) 3 of 4
4 PL training will be offered to all trainees and will enable them to master custom equipment and software used to perform their job functions. Since trainees will face slight variations with every order (different combination of products, box sizes, packing requirements), the processes, equipment, and software solutions learned in PL will aid trainees in quickly adapting to variations in their job functions. Trainees will be able to use the equipment, develop safe behaviors, and develop efficient processes. Amazon has used the same productive lab training method in all of their fulfillment centers. RECOMMENDATION Staff recommends approval of this proposal, including an exemption to the funding cap. DEVELOPMENT SERVICES Golden State retained California Manufacturers & Technology Association in Sacramento to assist with development of this proposal for a flat fee of $320/hr not to exceed 10% of the Agreement amount. ADMINISTRATIVE SERVICES Golden State retained California Manufacturers & Technology Association in Sacramento to perform administrative services in connection with this proposal for a fee of $150/hr, not to exceed 13% of payment earned. TRAINING VENDORS To Be Determined ETP Single (08/16/12) 4 of 4
5 Golden State FC LLC ET Exhibit B: Menu Curriculum Class/Lab Hours Trainees may receive any of the following: COMMERCIAL SKILLS Fulfillment Center Terminology Fulfillment Center Layout Inbound/Outbound Functions Process Flow Tools/Equipment Handling and Operations Quality (Inventory Control) Receiving Procedures Stow Procedures Pick Procedures Pack Procedures Ship Procedures Troubleshooting Procedures Powered Industrial Truck Operation Standard Work Procedures COMPUTER SKILLS Inbound Scheduling System Receive Station Interface Pack Station Interface Sort Station Interface Problem Solve and Process Flow Applications PL Hours PL-COMMERCIAL SKILLS Inventory Control Staging Receiving Cross Training Equipment/Tools Operation Production Operations Troubleshooting Procedures Powered Industrial Truck operation and troubleshooting Note: Reimbursement for retraining is capped at 200 total hours per-trainee, regardless of method of delivery ETP 100 Exhibit B Menu Curriculum (02/13/12) 1 of 1
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