DINT #63 - Tesla's Racism Problem Isn't Going Away - Neither Is Its Revenue
Plus, Biden Gives $930 million to remote and rural communities to get Internet access, China hackers land a big win by breaching Barracuda Networks, and Alphabet sells Google Domains to Squarespace.
Today we launch our article on Tesla’s misdeeds and success in the midst of multiple racial discrimination lawsuits and legal judgements.
But first, here are today’s headlines:
Biden Devotes $930M to Connect Rural and Remote U.S. Communities to the Internet
Maybe the Biden Administration read last Friday’s DINT and our call for inclusion in connectivity in rural and remote areas. Today the U.S. Department of Commerce announced $930 million in grant funding to bring Internet services to far-flung and often-ignored parts of the U.S.
(AP / Kavish Harjai)
More Context on Rural and Remote Connectivity:
Subsea Cables: The Hidden Threat to Data Center Connectivity
Equinix to ISPs in Michigan, New York, and Texas: No Excuses! Join ACP and Help Us Close the Digital Divide
China-Sponsored Hackers Breach Barracuda Networks to Gather Info on U.S. Gov Officials Monitoring China
(TechCrunch / Zack Whittacker)
Related Coverage: Watch Out! Hackers Use VMware Flaw to Access Windows and Linux
Data Center Chips, Not Data Center Energy Consumption Have the Biggest Carbon Footprint
(The Financial Times / June Yoon)
Related Coverage:
ed coverage:
Alphabet Sells Google Domains Business to Squarespace for $180M: Bloomberg
(Bloomberg / Katie Roof)
Quantum Progress: Intel Ships Quantum Processor Chips to 12 Academic Research Labs
(Ars Technica / John Timmer)
Related Coverage:
IBM and Google Fund Quantum Computing Research with $150M Grant
Grant Promotes Diversity Among Quantum InfoSec Elite
Feature Article
Tesla’s Balance Between Racist Workplace Behavior and AI Innovation
Tesla made big headlines for two situations so far this June.
June 7 – Former Tesla contractors and employees filed testimonies in support of a potential class action lawsuit against the smart carmaker.
June 15 – Tesla experiences higher stock price growth on the news the firm is using AI more in its autonomous driving vehicles.
When we look at these two events, we see Tesla’s growth isn’t affected by the negative publicity that comes from the string of lawsuits it has faced since 2017 from current and former employees.
Studies by Catalyst and the U.S. Chamber of commerce support the belief diversity and an equitable workplace have a positive effect on revenue. Tesla doesn’t seem to fall in this category.
Companies with consistent, inclusive workplace cultures—especially as experienced by historically underrepresented groups—also outperformed the S&P 500 in average annual stock returns during the Great Recession [measured from 2006-2014]. (Catalyst)
And here’s more proof from the U.S. Chamber of Commerce:
According to a revealing study from the W.K. Kellogg Foundation, the American economy stands to gain $8 trillion by 2050 simply by closing the racial equity gap. Moreover, businesses that recognize and embrace the value of inclusion consistently perform better across multiple financial metrics. Research shows, for example, a strong correlation between diversity in leadership and quarterly earnings. For every 10% increase in racial and ethnic diversity on a company’s senior executive team, earnings before interest and taxes rise 0.8%.
(“Why Greater Diversity Is an Economic Imperative” by Thomas J. Donohue / U.S. Chamber of Commerce)
Why do companies, then, hold onto a passive approach to anti-racism in the workplace? Here’s coverage from a previous article:
From October 2017 until today, Tesla has been sued by multiple (see timeline below) current and former employees, whose descriptions of treatment remains the same across divisions, work groups, and work settings. From production lines to offices, Black former Tesla employees and contractors allege a dismissive approach to defending employees against racist attacks.
In response to escalating complaints of racism, CEO Elon Musk emailed employees a statement which included:
“Part of not being a huge jerk is considering how someone might feel who is part of [a] historically less represented group,” Musk wrote in the email. “Sometimes these things happen unintentionally, in which case you should apologize. In fairness, if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology.”
None of the people who filed lawsuits against Tesla have mentioned any apologies offered for racist behavior.
Many of the Teslas on the road today were made in an environment where Black workers were called “porch monkey” and “slave” and they were told to “go back to Africa” and referred to the areas where Black workers were stationed as the “slave ship” or “the plantation.”
Yet the disclosure of this behavior hasn’t had an effect on the firm’s stock price (see comparison chart below).
Stay tuned for more details on the upcoming developments for the class action lawsuit.
Timeline of Tesla Racial Discrimination Lawsuits and Stock Prices
October 2017 - Initial Lawsuit Owen Diaz
Former Tesla worker Owen Diaz filed a discrimination, discrimination, harassment, retaliation, and negligence lawsuit against Tesla with Lamar Patterson and Demetric Diaz co-plaintiffs.
(casetext)
Tesla stock price: $22.10
November 2017 – Initial Lawsuit Marcus Vaughn
Former Tesla assembly line employee Marcus Vaughn filed a complaint against Tesla detailing a pattern of toleration of racist behavior in its manufacturing plants.
(FindLaw.com)
Tesla stock price: $22.15
August 31, 2021 – Marcus Vaughn Gives Video Interview
Vaughn features in a video outlining the basis for the lawsuits against Tesla for racial discrimination:
Tesla stock price: $238.24
October 4, 2021 – $137M Judgement
Tesla ordered to pay former Tesla worker Owen Diaz $137 million in racial discrimination lawsuit.
(NPR)
Tesla stock price: $265.50
February 10, 2022 – CA and Tesla Accountability
The state of California sues Tesla for discrimination against Black workers.
(AP News)
Tesla stock price: $223.93
June 21, 2022 – 89% Reduced Settlement Rejected
Diaz rejects Tesla’s offer of a reduced settlement of $15 million; which is 89% less than the original judgement of $137 million in damages for racial discrimination and hostile work environments.
(Bloomberg)
Tesla stock price: $164.80
July 1, 2022 – Initial Filing for Group of 15 Workers
Fifteen current and former Tesla employees sued Tesla for a racist work environment including harassment and intimidation.
(Bloomberg)
Tesla stock price: $227.26
March 27, 2023 – New Diaz Trial
Diaz’s new trial begins (to re-evaluate the amount Tesla should pay in damages)
(Reuters)
Tesla stock price: $191.81
March 31, 2023 – Initial Filing from John Goode
Former Tesla general manager John Goode sues Tesla for denial of advancement opportunities, a racist work environment, and retaliatory firing.
(Reuters)
Tesla stock price: $207.46
April 3, 2023 – Jury ‘Awards’ Diaz 98% Reduced Settlement of $3.2M
Diaz awarded $3.2 million in damages (a 98% reduction in original judgement of $137 million) stemming from the racist environment at Tesla’s Freemont, California manufacturing plant.
(AP News)
Tesla stock price: $194.77
May 5, 2023 – Initial Filing by Karen Draper
Former Tesla manager Karen Draper filed suit against Tesla for wrongful termination and workplace retaliation.
(The San Francisco Examiner)
Tesla stock price: $170.06
May 30, 2023 – Initial Filing by Carlos Hicks
Former Tesla worker Carlos Hicks files suit against Tesla for discrimination and workplace harassment.
(Bloomberg Law)
Tesla stock price: $201.16
June 5, 2023 – Pending Class Action Suit Preliminary Testimony
On this day, 240 former Tesla workers give testimony in support of a class action lawsuit against Tesla for racism, discrimination, and making the production floor a “hotbed for racist behavior.”
(Bloomberg)
Tesla stock price: $217.61
June 15, 2023 – Tesla stock price: $255.90
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