fortune--2020-06-19--Rep. Marcia Fudge: Black history is American history. Let’s start teaching it that way

It was Monday, June 19, 1865, in Galveston, Texas.
Robert E. Lee had already surrendered his army that April, and the last battle of the Civil War had been fought in Brownsville, Texas, in May. But 250,000 enslaved black people in Texas didn’t know the war was over, nor that they had been legally free since 1863, until a Union general read an order aloud to the people of Galveston that said: “The people of Texas are informed that [based on]…[a presidential] proclamation…, all slaves are free.”
That day in 1865 is now commemorated as Juneteenth, or Emancipation Day, the oldest national holiday recognizing the emancipation of slaves in the U.S. It started in Texas, but 46 states and the District of Columbia now celebrate what happened in Galveston as the true end of slavery in America.
The presidential proclamation referred to in the Union general’s order was President Abraham Lincoln’s Emancipation Proclamation, which was signed in September 1862 and took effect on Jan. 1, 1863. It declared “that all persons held as slaves” in “any [Confederate] state or designated part of a state…shall be…forever free.”
As slaves in other Confederate states kept watch on Dec. 31, 1862, waiting for midnight when they would be free, slaves in Texas were unaware of President Lincoln’s proclamation. Even worse, they were kept ignorant of their emancipation for over two and a half years.
This is only one of many moments in American history shaped by the black experience. That is why I introduced legislation on May 15 of this year to encourage the proper inclusion of African American history in American history. The bill is the Black History Is American History Act, and over 120 members of the U.S. House of Representatives have already joined me in support.
It was introduced, on purpose, two days before the 66th anniversary of the Supreme Court’s decision in Brown v. Board of Education of Topeka, Kansas, the 1954 case that outlawed segregated schools in America. The bill provides grants for teachers and students to teach and learn black history. It also requires the only national test given to elementary, middle, and high school students all over the country to always include black history.
Twelve states already recognize how important it is to teach black history, including Texas. Our other 38 states should join them and take action that acknowledges the role of black people in the discovery, development, and growth of our country. African Americans have helped build this country’s economy, discovered and explored new territories, settled and kept peace in the West, and invented and improved so many things we take for granted today, like the traffic light and blood transfusions. We have proudly fought and died in every war, served on the U.S. Supreme Court, and one of us was elected as the nation’s 44th President.
But many of our contributions to America’s history are not known or understood by most Americans, because they are not properly taught in our schools.
Juneteenth is a time to learn and celebrate. But it should also be a time to reflect on the complexity of the African American experience and its role in shaping our country’s history. One example that comes to mind is the Greenwood community in Tulsa. Thousands of African American residents lived there during the oil boom; it was so successful that the business district was known as Black Wall Street.
In 1921, a young black teenager was wrongfully accused of assaulting a white woman, and Greenwood residents suffered one of the worst race massacres in U.S. history at the hands of the city’s white residents. After 18 hours of terror, as many as 300 people were left dead and thousands homeless. Businesses, churches, homes, newspapers, and even a school and hospital were destroyed or damaged by fire.
The story of the massacre was buried for decades, but today the Tulsa race massacre is included in Oklahoma history books, and taught as a part of state and U.S. history. It appears that Oklahoma decided that its history was incomplete without the contributions and experiences of the African Americans in Greenwood.
America’s history is also diminished and diluted when it does not include all our stories. As we honor Juneteenth and the Texans who were the last to learn they were “forever free,” we should take pride in the fact that black history is American history—and work to make sure all states teach it to their students.
Marcia L. Fudge has been the U.S. representative for Ohio’s 11th District since 2008. She serves as chair of the Committee on House Administration’s Subcommittee on Elections, and chair of the House Agriculture Committee’s Subcommittee on Nutrition, Oversight, and Department Operations.


fortune--2020-06-19--We can’t breathe at work, either: John Henryism and the health impact of racism

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Like many black people, I have spent the past weeks reflecting on and continuing Martin Luther King Jr.’s beautiful struggle of working toward dismantling racism and antiblackness, spurred by the killings of George Floyd, Breonna Taylor, Ahmaud Arbery, and so many others. During a march last week, a colleague talked about all the spaces they were a part of: community organizations, social justice collectives, professional obligations, and work. I looked around at my fellow black faculty and administrators and realized we were all doing the same high-impact, but also high-emotional-toll, types of activities. But at the same time, we were attempting to keep all the plates spinning in our chaotic professional lives in a manner that exceeded that of our nonblack peers.
Years ago another colleague of mine mentioned the term “John Henryism” to me. I knew the name from the folktale (one of the few with a black hero): John Henry is a steel driver who races a drilling machine to bore out a tunnel. He defeats the machine, only to die immediately from a heart attack from overwork.
While the story is celebratory and heralded in songs, films, and comic books, John Henry’s death is a chilling reminder of the cost black people pay “racing the machine.” In 1983, social epidemiologist Sherman James observed this phenomenon among working-class black men, who responded affirmatively to statements such as: “I like doing things that other people thought could not be done,” “It is not always easy, but I manage to find a way to do the things I really need to get done,” and “I feel that I am the kind of individual who stands up for what he believes in, regardless of the consequences [emphasis theirs].” These men suffered greater psychological and health problems such as heart disease and hypertension.
James’s concept can apply to black professionals combating systemic racism in the workplace. Many black professionals are hyperscrutinized on their credentials and performance, driving them to not only work harder—but also to be “twice as good, to go half as far,” as Michelle Obama wrote in Becoming. It’s evident in popular culture: The HBO series Insecure chronicled one character’s struggles in a predominantly white law firm. The stakes for black professionals are not confined to the individual: The hypersurveillance and scrutiny also affects the status of other, and future, black people in the organization when they’re compared to other black people (and mistaken for them, despite differences in appearance and personality).
This moment of activism brings excitement and possibilities of lasting change. Black professionals are reporting and presenting, talking to the media, and engaging in community service as their other work responsibilities continue, without additional compensation. How do we guarantee that black leaders remain healthy as systemic racism works to erode their capacity?
One obvious strategy is ensuring that anti-racist work is not placed solely on the backs of black professionals. Organizational heads should lead from the front: By modeling personal commitments to individually and organizationally dismantling oppressive structures, they resist implications that only black people can lead efforts.
Another step is certifying that workplaces promote mentally and physically healthy lifestyles for all—while simultaneously noting the unique stressors for employees who are black, indigenous, or people of color. In organizations with small numbers of black professionals, all must understand the pressure of being the “only one”—and commit to internship, hiring, and retention plans, as well accountability to them.
Resource groups (also called support groups) assist black professionals in finding community in organizations where black employees are scattered across the institution. Resource groups should be well funded for community building—and their leaders should have direct access to leadership to bring concerns to the forefront as they evolve. They also can serve as networking spaces for mentoring relationships to develop.
Last, those who evaluate and support black professionals must commit to using non-biased rubrics to assess progress. Professional advancement cannot depend on gut feelings or homophily (the similarity one has to those in leadership). Instead, transparent and equitable benchmarks that all can achieve should be the mark of institutional advancement.
Leaders should beware of professional development requirements that mandate out-of-pocket expenditures or unpaid work, which advantage those with access to additional resources. Funding and release time should be available for all who are interested in these opportunities, particularly those who have been historically marginalized.
To ensure that the undeserved, unnecessary deaths of George Floyd and other black lives are not in vain, organizations must commit to long-term planning and action. But this should not be at the expense of the physical and emotional health of black professionals in organizations. John Henryism is a warning to leaders that black professionals, too, can’t breathe.
This essay is dedicated to the memory of James A. Wilson Jr.
Richard J. Reddick is an associate professor and associate dean for equity, community engagement, and outreach for the College of Education at the University of Texas at Austin, where he also holds courtesy appointments in the Department of African and African Diaspora Studies, the Institute for Urban Policy Research and Analysis, and the Warfield Center for African and African American Studies.


fortune--2020-06-19--IBM’s Ginni Rometty: The way we hire must change—and we must do it now

Ginni Rometty is no longer the CEO at IBM. But the current executive chairman of the tech giant has big plans for transforming the way the company—and the business world more broadly—goes about hiring employees.
“We can’t wait a generation to fix this,” said Rometty, referring to the underrepresentation of black and brown executives in many companies, particularly in the highest ranks. (There are only five black CEOs, all of whom are male, on this year’s Fortune 500 list).
The former CEO, who spent nearly 40 years at IBM, spoke about anti-racism, reskilling workers, and the workplace of the future during a Fortune Most Powerful Women virtual event on Thursday. She was surprisingly candid about the failures of many corporate diversity initiatives.
“We moved from [talking about] diversity to inclusion to equality and then to racial injustice,” said Rometty. “Something is wrong with that pattern and with where our focus has been. Whatever we did [to diversify workforces], we didn’t thoroughly understand what we needed to do to change.”
Rometty shared several suggestions for how to push for real change. For starters, she recommended that leaders organize listening sessions with black employees—something IBM has done so with 2,500 people in their own workforce so far.
“They’re gut-wrenching,” said Rometty. “Every single [black] employee could talk about a moment they were harassed. Every one of them could recall a day they were called a very bad name. If you go through this experience with your employees, you will be forever changed.”
Rometty, who like many business leaders, likes to group thoughts and initiatives in threes, also had a trio of to-dos for executives who are looking to change the way they hire. The first step was to take an honest look at their job requirements and re-prioritize around the skills that are truly needed to excel at any particular position. Do away with specific college requirements and focus on a “skills-first” hiring approach. The second suggestion was to give a clear pathway into your company—and not just the traditional one. Invest in apprenticeship programs, for example. Lastly, Rometty also encouraged leaders to be pursue private-public partnerships.
Rhode Island Gov. Gina Raimondo, who attended the event (and was a speaker at another recent Most Powerful Women interview), added that there aren’t enough people acting in unison from both the corporate and government sectors.
“How do we as leaders, in a bipartisan way, finally use this moment of the COVID crisis and glaring racial inequities to act at scale and get companies to really change the way they hire, and get states and the federal government to really change the way they train?” the governor asked Rometty and others in the audience.
Rometty said that, even though she is no longer the CEO of IBM, she is committed to bring about change and plans to be persistent in her call for more collective action among corporations and the government sector to change old ways of training, hiring, and retaining employees.
“We’ve got to scale opportunity for the underserved around us,” said Rometty. “It starts at home.”


fortune--2020-06-19--Black employees say ‘performative allyship’ is an unchecked problem in the office

As racist practices in some workplaces have come to light, companies are under scrutiny for how they’re practicing allyship. Certainly posting a black square to Instagram is not enough. As organizations speak out against racial injustice, many have been accused of “performative allyship”—condemning racism through broad gestures but enabling its effects in their own workplaces.
Black employees from across industries told Fortune that they’re keenly familiar with such optical allyship. They say their companies speak out in support of racial equality but don’t hire black executives or equally pay black employees, don’t listen to their concerns regarding discrimination, or were completely silent about racism up until now. They have stories of affirming individuals and gestures, but those are much fewer and farther between.
Their point is clear: Companies may invest in showing customers that they care about issues affecting black Americans, but those acts are meaningless if they don’t invest in their black employees as well. They may make a splashy announcement about a Juneteenth company holiday, but the way they treat their black employees when they return on Monday matters just as much, if not more.
We’re not done documenting experiences. If you have an anecdote to share, please submit your thoughts here. For more stories, subscribe to raceAhead, our newsletter on race in corporate America.
The responses have been lightly edited. We’ve published only first names to respect the privacy of the contributors.
I spent the past three years in private banking in a city most notably known for being non-diverse. I have a number of stories, but the one that sticks most is when my bank was under public scrutiny for racist acts. They put out a well-written statement internally. Days passed with no commentary or check-ins on how I felt about the matter from any of my coworkers. Not one. Then one day, following a national call where the CEO addressed the headlines, I was pulled into a room by the managing director and asked, “So do I call you black or do I call you African-American?” Stunned, I said, “The respectful thing to do would be to call me, and anyone that identifies this way for that matter, African-American.” Which was met with, “Well, I’m hiring another black woman. I listened to you. You’re welcome.” —Monica, 25
Authentic inclusivity in my workplace does not exist; performative allyship abounds. Asking staff to recast the organization’s work in ways that “could be seen as having a racial justice lens,” when you have not historically applied a racial justice lens, is performative allyship. Using words to sway external black stakeholders in printed press releases, public statements, or on the website is performative allyship. Prioritizing the concerns of external black stakeholders while not being attentive to those of internal black staff is performative allyship. —Ricshawn, 46
When black people want to speak about their experience…just listen. Don’t try and solve; just listen. Most of the time, they just want to be heard and acknowledged. — Alex, 56
Since Mr. Floyd’s death, we have had a few Dialogue Circles, and all are welcome to attend. It’s been therapeutic for me. Our executive council hosted a conversation, and we openly talked about racism, white privilege, and discrimination. Most employees supported their effort, while a few posted insensitive questions. Still, I appreciate our leaders for taking a stance and acknowledging there is a lot more work to do and that they are willing to step up and lead the way. My company has always been one to cautiously tread the political waters, but I knew this was different. Our CEO has spoken out publicly a few times in support of BLM, protesting, and the change desperately needed in the U.S. —Adrienne, 49
While working at a women-led company, I became fully aware of what racism looked like in a workplace setting. If all your managers and executive team members are white, but you’re telling your customers you are all for women’s rights and inclusivity, you are lying, simply put. We have to see it within the company first before you can speak about it and use it for marketing to gain customers. —Brianna, 33
I’m so glad that you are digging in to learn more and are invested in growth and anti-racist education. But please stop sending me every article, podcast, and video you check out. I’m not going to give you a cookie, and I never signed up to be the official librarian for our company. I have a lot of work to do and don’t care to participate in every webinar you hear about. Tell your white coworkers about it. Please. —Carrie, 35
It is not about a slogan or a hashtag. Many corporations have been complicit, and the evidence is clear by looking at the lack of black faces in their senior leadership teams and boards. This moment requires honest self-examination and making room and advancement opportunities for qualified black colleagues. Laws and policies, while necessary, will not eradicate racism. The answer lies in people making a choice to behave differently and addressing even the smallest acts of racism or microaggressions in their sphere of influence. —LaToya, 44
I worked in a company of approximately 1,000 employees, of which only two to four African American employees were in management, and none were in senior management. The president would always state at his management retreats that he hated discrimination. My message to him would be to walk the walk. Put some people of color on that senior management team—more than one. Now is the time for him to make a difference. —Lynn, 60
Think about the words being used at work that don’t include all races. —LaTanya, 42
I would like for white people to stop expecting me to speak for an entire race. Stop trying to explain racism to me when I live it daily. Stop acting as if this is something new. Racism was rampant last month, last year, and the century before that. Realize that my “living my best life” could get me killed. And no, you do not understand. An HR staff person actually said “enough already” regarding BLM. —Dee, 55
I left a job that I was good at because management created an environment so wrought with microaggressions that I doubted everything about myself including my excellence and my worth. The company encouraged everyone to bring their full selves to work, but in reality, the culture only embraced “whites who bike.” My concerns were largely met with dismissal by leadership who were too timid to attribute my experience to discrimination and were uninterested in real change that fostered an inclusive environment. Emotionally drained, I left the job recently, but the scars and trauma remain close to the surface. I am slow to trust, am hypervigilant, and so hurt by how I was treated. I find it pretty funny that now that Black Lives Matter is the topic du jour, the same people who were complicit in my misery are now reaching out to “check on me” and to start a dialogue. —C, 35
We have to advocate for ourselves, and we’re made to feel we’re asking for far too much. Real allyship is as rare as a desert oasis. Example: A new CRO hired a white woman to work under me for 30% more pay. My manager used a rote Google search to address my concerns until I went to the head of HR myself. Three weeks after I was given back pay and promoted, I was laid off. —Racquel, 30
One white woman has directly advocated for me to managers. She has facilitated wider conversations about race because she knows people will listen to her. She takes the stage and gives it to me and the two other black people in our office. She has given me advice. She has bought me coffee on rough days recently. She realizes she can’t solve everything, but she tries and does what she can and is open to critique on herself. But this is one person. No one else has been like this.
People send me messages asking me if they can do anything, but I hardly know them. They just know I am the black one on the West Coast team. One man asked me if I have “recovered” since we last spoke two weeks ago. No, I have not recovered from hundreds of years of abuse of my people and my attempt to keep working so I can keep surviving in this city. —Nia, 25
There are too many missed opportunities by white people to become allies. It’s great if you want to be an ally, but we need to know that you have our back when we need it most and will not back down or shy away from the difficult conversations that take place when it comes to promoting black people. At my age, I should not have to wonder if I will be able to retire in less than 20 years, but it is a constant struggle just to be seen. —Tonja, 49
Allyship is not just about intent; it requires proactive action. Saying you are not racist is not an action. Saying you want to help, but you don’t know how to is not an action. Asking the oppressed to educate you about the well-researched, well-documented issues that are oppressing them is not an action. Letting your privilege go unchecked is not an action. Being silent is not an action.
Change starts with you as an individual and then becomes collective. But you must want the change. Those who benefit from systemic discrimination are fighting just as hard to keep certain biased laws and policies in place as those who are trying to dismantle them. But are you willing to continue benefiting from something that hurts or literally kills someone else? The answer should be an emphatic no. Think about what changes you can make to support your colleagues, family, and friends who are feeling frustrated and like every odd is against them. You have a duty as a human being to do better for them. —Amber, 30
That you do not use the so-called “N-word” does not mean you are not a racist, and saying you are not racist does not absolve you of being aware and accountable for your casual and subtle racist behavior. —Oneita, 51
Two stories on allyship: A senior executive gave us a ride back from a meeting, and his radio was blaring a live Trump rally. This was a full bit on ungrateful NFL players kneeling. I could sense the white people in the car were as uncomfortable as me, but no one said anything. Finally, as I couldn’t take it anymore, I put in my earbuds.
A white male executive I’ve been friendly with whispered to me in a meeting that we were in the minority because everyone else in the room was a woman. I whispered back, “Welcome to my everyday experience.” He was stunned and apologized that he never thought of it before. —Joe, 43


fortune--2020-06-20--6 reasons Boeing’s financial picture may be brighter than most assume

It’s hard to think of any great enterprise that has fallen as far, as fast as the Boeing Company. Just over a year ago, the 104-year-old aircraft and defense manufacturer was ramping up deliveries on its signature product, the super-fuel-efficient 737 Max, a huge hit boasting 5,000 orders, and its earnings, sales, and margins were all headed for records. Wall Street was sold that Boeing had entered a new era of enduring profitability. In just three years, its stock had jumped 300% to over $400 per share. “Over the years, Boeing has established a lead in efficiency and margins over it sole major rival AirbusAirbus,” says Craig Fraser, an analyst for Fitch Ratings. “Then, Boeing went from the best to the worst of times overnight.”
The descent began in March of last year after a Max operated by Ethiopian Airlines crashed because of a software malfunction—the airliner’s second fatal disaster in six months—which brought the death toll to 346. The federal authorities ordered the Max grounded, and revenues from the plane that was supposed to be Boeing’s biggest revenue-and profit-spinner fell to virtually zero. In 2019, as its airline customers were enjoying the best year in their history, Boeing took a $4.9 billion charge for delaying deliveries of the Max and went from generating $8 billion in free cash flow in 2018 to burning $10 billion last year, one of the biggest sudden swings in the annals of manufacturing.
The Max crisis was already certain to undermine Boeing’s profitability and swell its debt at least into 2021 before the second catastrophe struck. Now the COVID-19 pandemic is hammering revenues of its airline customers by as much as 80%, forcing them to postpone, or in some cases cancel, their scheduled Max deliveries. In the best-case scenario, where the Max is ungrounded this summer, Boeing over the next couple of years will ship less than two-thirds of the huge volumes forecast before the onset of the pandemic. An estimated 50% of the world’s 26,000 commercial aircraft are parked out of service, a pullback that has savaged Boeing’s $17 billion services franchise that supplies parts and repairs for carriers. Jonathan Root of Moody’s Investor Service forecasts that Boeing will bleed $30 billion in cash flow in 2020 and end the year with over $60 billion in debt, four times the figure at the close of 2018.
The confluence of two hurricanes, and those scary numbers, have raised doubts about whether Boeing will survive. “Boeing is on the brink,” Bill Ackman, head of Pershing Square Capital, declared in a March TV interview. “Boeing will not survive without a government bailout.” Investors are harboring deep doubts about its future: Boeing’s share price has fallen almost 60% from its February 2019 high to $190, shedding over $130 billion in value. “The airlines are built for 2.5 million passengers a day, and now they’re getting fewer than 500,000,” says Joe Brancatelli, publisher of the business travel website JoeSentMe.com. “Without a profitable airline business, you’ll have no profitable airplane manufacturers.”
Even CEO David Calhoun, recruited as crisis manager in January, is presenting a rather dim view of the market for Boeing’s planes going forward, and by implication, its future. In recent interviews, Calhoun predicted that “most likely” a major airline will go bankrupt this year. He further stated that the carriers and manufacturers face a long, tough task assuring customers that air travel is safe again, and that because traffic will return so slowly, it may take Boeing tree to five years “to return to a growth rate similar to the past.”
It may sound remarkable, then, that fixed-income analysts from both Moody’s and Fitch view far clearer skies ahead than the free-fall in Boeing’s results suggest. That’s significant because fixed-income analysts focus not on stock prices but on a company’s ability to generate cash for servicing and repaying debt. Hence, their analysis is a lot more sober than the often bluebird forecasts from the Wall Street sell-side. To be sure, Fraser of Fitch and Root of Moody’s see significant threats to a Boeing comeback, notably a second wave of COVID-19 that could further delay the Max and wide-body deliveries Boeing needs to produce cash, and still another FAA extension of the ban grounding its most-ordered model. They’re also concerned that the airlines’ first priority even in the recovery will be towards paying down debt, not buying new planes.
Their outlooks rest on their “what if” scenarios incorporating their most likely forecasts of a number of factors, headed by how long it takes for traffic return to 2019 levels. Fraser thinks that air travel gradually climbs back to its pre-COVID levels sometime in 2022, while Root believes the round trip will drag until 2023.
Neither Root nor Fraser think that Boeing can return to its pre-2019 glory for several years to come. But they do predict that a comeback on that scale can happen eventually, and that by 2021, Boeing will be generating sufficient free cash flow to begin trimming its gigantic debt. Both cite a number of factors pointing to a slow recovery: Boeing’s ability to harvest lots of cash in anything approaching normal times; the airlines’ need to replace high numbers of planes, driven by both their fleets’ advancing age and environmental regulations; and the manufacturer’s strong liquidity, reserves built on successful bond offerings displaying investors’ continued willingness to extend it credit.
Most of all, Boeing shares with Airbus a duopoly in a gigantic business that at some point will return to robust growth. Its biggest single advantage: Boeing is still positioned to capture at least half of orders for commercial airplanes for decades to come, and despite today’s freeze, those orders are destined to rise in lock-step with the world’s middle class.
Let’s examine the six strengths that can power Boeing through the storm.
Boeing was such a money machine pre-crises that it can be profitable even with a lot less business
The twin blows wrecked what was looking like a great 2020. “If the pandemic and Max crisis hadn’t happened, Boeing would have posted $112 billion in revenue and $13 billion in free cash flow, meaning $17 billion before paying dividends,” says Root. “The world will not go back to the time before those two events, but where Boeing was headed shows its potential when demand returns and the indigestion from those two events is over.”
Now, Root is predicting sales of $71.2 billion in 2020 and $81 billion in 2021, still 20% below peak 2018 levels. Nevertheless, he sees free cash flow rising to around a total of $10 billion in 2021 and 2022. In 2022, that’s about what Boeing would have generated if the Max meltdown and the pandemic hadn’t struck. Though Boeing won’t be its old self, that would show Boeing’s ability to repay debt, and mark a flight path to recovery.
Here’s why it’s possible. The forecast assumes that the FAA will approve the Max for deliveries in the the third quarter of this year, as Boeing expects. The company has over 450 of the completed jets in inventory. It has already put out all of the cash to make those planes, but collects the vast bulk of the price only when it delivers. Hence, even though those deliveries will be much slower than expected, they’ll be highly lucrative. In addition, Boeing benefits from a stabilizing force: its steady defense and aerospace business that in normally accounts for one-third of its revenues. It is lead contractor on a number of important programs, including the MQ-25 Stingray refueling drones and MH-139 helicopter. The last year contributed $2.6 billion in operating profits and holds a $64 billion backlog, second only to Lockheed Martin.
Fraser notes that Boeing’s cost-efficiency bodes well for its longer-term profitability, citing that it assembles all of its Maxes in a single location, a 1.1-million-square-foot mega-factory in Renton, Wash. “They can dramatically increase production in that facility on that one footprint,” he says. That model contrasts with Airbus’s costlier process of assembling its bestselling A320 at a number of facilities across the world.
Boeing 737 MAX airplanes are stored on employee parking lots near Boeing Field, on June 27, 2019 in Seattle, Washington. Stephen Brashear—Getty Images
Boeing has lots of cash
In the good times Boeing held only modest amounts of debt, a posture that’s paying off today as it borrows heavily to weather the turbulence. At the close of 2018, its long-term borrowings totaled just $13.8 billion. Fortunately, Boeing’s past prudence has aided in securing lots of emergency cash at reasonable rates. It drew down the full amount of a $13.8 billion, 18-month bank loan in early March and in late April floated a $25 billion bond offering with maturities of up to 40 years; the 10-year tranche carried a rate of 5.15%. Today, its long-term debt stands in the $50 billion range, and according to Fraser, could reach $60 billion by year-end.
The fresh liquidity will easily cover Boeing’s expected cash burn of $30 billion in 2020. At the close of Q4, it should still have a cushion of around $20 billion in cash. Boeing has suspended its regular annual dividend of around $4 billion, and all share repurchases, for “several years.” It plans to deploy the entirety of its free cash flow, once again, expected to hit around $6 billion to $7 billion a year in 2021 and 2022, as well as excess cash, to whittle down that mountain of debt—an essential step to staging a comeback. In 2021, Fraser predicts that if the Max returns to service this year, and without a second wave of COVID-19, Boeing could get off to a fast start by repaying $10 to $15 billion in debt.
Surprise, the Max is still popular and cancellations are modest
In its commercial aviation segment, comprising some 40% of sales in good years, Boeing’s big product is the 737 Max. It accounts for 72% of current orders, versus 16% for its wide-body 767s and 777s. The Max models offer 138 to 204 seats, and the jetliner can fly up to 3,000 miles. Its introduction—first orders came in 2011—fit well with the industry’s shift to narrow-body aircraft serving busy urban routes. But its marquee appeal was energy savings: The Max uses one-fifth less jet fuel per passenger than previous 737 versions. The Max’s sole rival is Airbus’ also super-efficient 320neo family. Boeing’s woes has helped the 320neo surpass it total orders, but that the American manufacturer’s backlog remains so big is a testament to the power of the duopoly.
It’s also shows that despite its tarnished public image, the Max is still popular with customers. “There are a lot of misperceptions about the Max,” says Fraser. “The airlines and lessors have a favorable view compared with the general public.” He notes that the jet was in service for 18 months before the first crash and flew an estimated 200,000 to 250,000 times. “The airlines we spoke to say that it delivers, and that the fuel efficiency lived up to what Boeing promised,” says Fraser.
In fact, the vast majority of customers are convinced the safety issues will be corrected and are sticking with the Max. The overriding problem is deferrals, not cancellations. Here are the numbers. Of the 5,005 orders at the peak, Boeing delivered 387 planes from 2017 to early 2019. Last year, airlines scotched 183 orders, followed by 313 more this year, for a total of 496 airplanes. Cancellations continue, but the rate is falling fast: In May, just 14 Maxes got scratched. All told, Boeing’s retained 90% of the 5,000-plus original orders.
Unless the trend reverses, a real possibility if a second wave hammers air travel, Boeing can count on delivering on the order of 4,000-plus Maxes over the next five to six years. The problem is timing. According to Root of Moody’s, Boeing would most likely have shipped 2,600 Maxes for 2020 through 2023 if COVID-19 and the crashes hadn’t happened. Now, he projects that over those four years, it will deliver 1,400 of the jetliners, 45% fewer. Even that lower number would allow Boeing to meet a target of generating several billion dollars in free cash flow, and repaying around $10 billion in debt, in 2021 and 2022. “What’s overlooked is that they still have a big backlog that should sustain them over the next five to six years,” says Fraser.
Coronavirus has wrecked air travel for now, but that shouldn’t change its positive “demographics”
Fortunately for Boeing, while the immediate outlook for air travel is horrendous, past trends—and especially the explosion of the middle class in Asia—point to a promising future. “When travel returns to 2019 levels in around three years, the industry will need as many planes as it was flying in 2019,” says Root. From there, the experience following 9/11 suggests the flight time to full recovery. It took until July of 2004, just shy of three years, for traffic to regain the records set just before the terrorist attack.
If that scenario plays out, the drop in air travel will prove temporary, and the trends in place prior to the pandemic will return following two to three year lag. To review those trends, it’s instructive to consult Boeing’s annual surveys forecasting the future course of air travel and demand for new planes, titled Commercial Market Outlook reports. The most recent was published in early 2020 before the COVID-19 outbreak, and the next one will surely downsize forecasts for the next couple of years. But the projections are a guide to what’s the most probable arc when traffic returns to 2019 norms. In other words, imagine that the annual trends forecast from 2020 onward—once again, driven by global demographics—extend instead from 2022 or 2023 into the future.
That most recent CMO projected that air travel would be two-and-a-half times larger in 2038 than in 2019, and that traffic would grow on average 4.1% a year, with Asia setting by far the fastest pace. Though that rise will now start a lot later, the best bet is that it still happens. Push back that timetable by three years. In that case, planes in service would almost double, to 51,000, it would simply take until 18 years instead of 15 years. Of those, only 6,600 would be jets flying today. Airlines and lessors would need to purchase, and the likes of Airbus and Boeing would need to supply, 44,000 new planes. Of those, 12,600 would go to China and Southeast Asia. Even with the three years downdraft, that’s an annual growth rate in deliveries of new planes of over 3% a year.
Of course, with all those thousands of jetliners now parked in the desert and airlines’ capital budgets under stress, it could appear that the airlines would simply keep fixing and flying aging planes. Not so, say Fraser and Root. Keep in mind that over 50% of the new planes will be needed to satisfy growing demand for seats. Plus, airlines need to replace old planes. “The planes typically fly for 20 to 25 years, then have to be retired,” says Root. “Airlines can’t let their fleets keep aging overall,” says Fraser. “They need to spread out maturities. Many of the older planes will be parked permanently.”
A major reason the fleets will be upgraded: The new generations of planes are far more fuel-efficient than the old ones. Jet fuel typically accounts for about one-quarter of airlines’ costs. For the airlines, purchasing new models that shave that burden by 20% per passenger flown is a must in keeping fares competitive.
Environmental concerns will push the airlines to replace aging planes
Fraser and Root note that the airlines have a strong commitment to lowering emissions. “ESG is a really big issue in the aviation sector,” says Fraser. “If coronavirus had not reared its head, it would be a top topic today. And the biggest issue in ESG is protecting the environment.”
As they point out, the industry’s been branded, rightly or wrongly, as a big polluter and wants to fix that perception. All of the U.S. airlines have agreed to accord formed by the United Nation’s International Civil Aviation Organization that caps emissions at 2020 levels even as air travel expands rapidly, and requires 2.5% annual increases in fuel efficiency. If carriers don’t meet the baseline, they’ll have to purchases carbon offsets, equivalent to a tax. “These potential environmental requirements will lever the airlines to operate new planes with higher levels of fuel economy sooner rather than later. The environmental issues will help Boeing sell more planes,” says Root. He adds that they’ll shun the other option: sticking with aging fleets and attempting to pass the penalties on in higher fares that could cost market share.
The big one: Airline manufacturing is mainly a duopoly and will stay that way for the foreseeable future
For years, Boeing and Airbus have been splitting orders for new jets about evenly. Although the Brazilians, Canadians, and Chinese make regional jets, the two titans dominate the narrow and wide-body markets for larger planes required for the busiest routes. That’s unlikely to change. So the big growth that’s probably still in the cards, albeit delayed for a couple of years, will almost all go to the two titans. Despite Boeing’s pressing problems, it co-dominates a huge global business with growth prospects that few manufacturing sectors can match. “Put simply, Boeing’s biggest ticket to a comeback is that it’s one player in a duopoly,” says Root. Its woes are now severe and potentially threatening, and the timing of its revival is uncertain. What Boeing can bank on is the longstanding aircraft duopoly will endure.


fortune--2020-06-20--With its borders reopening this weekend, Spain plans a giant spending package for its ravaged touris

With its borders reopening this weekend, Spain plans a giant spending package for its ravaged tourism sector

Spanish Prime Minister Pedro Sanchez announced a €4.25 billion ($4.75 billion) package to bolster the country’s battered tourism industry.
“The good news is that thanks to how the epidemic has evolved, we’ve been able to move forward the re-opening of our borders,” Sanchez said Thursday at a speech in Madrid, referring to the decision to allow members of the certain European countries to enter Spain freely as of June 21.
Thursday’s announcement follows the 3.75 billion-euro stimulus program for the country’s car industry announced earlier this week, as the government takes steps to shore up key areas of the economy slammed by the coronavirus pandemic.
Executives in the car and tourism industries have been clamoring for additional financial support from Madrid. They say the government’s 100-billion euro loan guarantee program and the funds spent to support millions of furloughed workers, among other emergency aid, have been vital – but still short of what’s needed to weather the unprecedented downturn.
The 4.25-billion euro package includes a previously announced 2.5-billion euro tranche of the government’s loan guarantee program that can be used exclusively by companies in the tourism industry. New measures include 200 million euros for the sector to spend on cleaning and other safety measures and 859 million euros in loans to bolster tourism companies’ digitalization, use of renewable energy and modernization of facilities.
The package also includes a moratorium on mortgage-loan payments for some tourism businesses.
A visitor and guide with face masks in the Court Of The Myrtles during the reopening day of the Alhambra and all its palaces on June 17, 2020 in Granada, Spain. The Alhambra is the most visited monument in Spain, and has been closed to the public since March 12, due to the Coronavirus health crisis. Wire photography: Fermin Rodriguez—NurPhoto via Getty Images
Tourism hotspot
More than 80 million tourists visited Spain last year, making it one of the world’s most popular travel destinations. The blow to such a crucial sector from the pandemic is one reason Spain’s economy is expected to contract more than most of its European neighbors. The Spanish central bank forecasts a worst-case-scenario contraction of as much as 15% this year.
Despite the bleak economic outlook, bond investors have been snapping up Spain’s debt. The Spanish treasury received bids on Thursday that were nearly four times the one billion euros sold, the strongest demand for a 10-year bond auction in four years.
The auction likely benefited from fewer than half the amount of securities being on offer compared to the last sale two weeks ago. Spanish bonds climbed after the sale, with 10-year yields falling nearly four basis points to 0.52%, close to the lowest level since March.
While some German tourists have been allowed to fly directly to Spain’s Balearic Islands as part of a special program, the rest of the country opens up to most European Union visitors on June 21. Most Spaniards still aren’t allowed to travel between provinces as the government slowly eases one of Europe’s strictest confinements.
The shortened summer season has put tens of thousands of jobs at risk. Swathes of the Spanish workforce depend on paychecks earned from May to September to make it through the rest of the year. Sanchez’s government has expanded such workers’ access to unemployment benefits but economists are concerned many will remain jobless – or at least face lower demand for their work – for several years. The Bank of Spain expects the unemployment rate to remain above 17% through at least 2022.
Among Spain’s largest tourism companies are hotel chains Melia Hotels International SA and NH Hotel Group SA, state-controlled airport manager Aena SA, airline booking software firm Amadeus IT Group SA and airline operator International Consolidated Airlines SA’s Iberia unit.
As part of government’s push to support tourism, Aena will be cutting airplane landing fees in Spanish airports, Chairman Maurici Lucena said in an interview published Thursday in newspaper Expansion.
Restaurants and small retail shops – essential to tourism industry – are likely to suffer among the greatest job losses in Spain because of social-distancing restrictions put in place to stem the pandemic, according to a research report published by the Bank of Spain in May.
Workers in those areas don’t have the necessary skills to find jobs in sectors that are likely to see increased demand in the coming months and years, such as e-commerce.
The central bank’s economists are calling for a nationwide re-training program for those workers to ensure Spain’s already high structural unemployment doesn’t surge even higher.


fortune--2020-06-20--Trump campaign staffers setting up for rally test positive for COVID-19

Racism is rampant on Reddit , and its editors are in open revolt

President Donald Trump’s campaign says six staff members helping set up for his Saturday night rally in Tulsa, Oklahoma, have tested positive for coronavirus.
The campaign’s communications director, Tim Murtaugh, said in a statement that “quarantine procedures” were immediately initiated and no staff member who tested positive would attend the event. He said no one who had immediate contact with those staffers would attend, either.
Murtaugh said campaign staff members are tested for COVID-19 as part of the campaign’s safety protocols.
Campaign officials say everyone who is attending the rally will be given temperature checks before they pass through security. They will also be given masks to wear, if they want, and hand sanitizer at the 19,000-seat BOK Center.
The rally was expected to be the largest indoor gathering in the world during the pandemic.
Tulsa has seen cases of COVID-19 spike in the past week, and the local health department director asked that the rally be postponed. But Republican Gov. Kevin Stitt said it would be safe. The Oklahoma Supreme Court on Friday denied a request that everyone attending the indoor rally wear a mask, and few in the crowd outside Saturday were wearing them.


fortune--2020-06-20--Persistently high layoffs suggest a slow U.S. economic rebound

Three months after the viral outbreak shut down businesses across the country, U.S. employers are still shedding jobs at a heavy rate, a trend that points to a slow and prolonged recovery from the recession.
The number of laid-off workers seeking unemployment benefits barely fell last week to 1.5 million, the government said Thursday. That was down from a peak of nearly 7 million in March, and it marked an 11th straight weekly drop. But the number is still more than twice the record high that existed before the pandemic. And the total number of people receiving jobless aid remains a lofty 20.5 million.
The figures surprised and disappointed analysts who had expected far fewer people to seek unemployment aid as states increasingly reopen their economies and businesses recall some laid-off people back to work. The data also raised concerns that some recent layoffs may reflect permanent losses as companies restructure their businesses, rather than temporary cuts in response to government-ordered closures.
The report is “telling us that the scars from the job losses in the recession will be longer-lasting than we expected,” said Gregory Daco, chief U.S. economist at Oxford Economics.
At the same time, Thursday’s figures may have raised as many questions about the state of the job market as they answered. Jobless claims generally tracks the pace of layoffs. But they provide little information about how much hiring is occurring that would offset those losses. In May, for example, employers added 2.5 million jobs — an increase that caught analysts off-guard because the number of applications for unemployment aid was still so high.
Some likely factors help explain why applications for jobless benefits remain so high even as businesses increasingly reopen and rehire some laid-off workers. For one thing, many businesses that deal face-to-face with customers — from restaurants and movie theaters to gyms and casinos — remain strictly limited to less-than-full capacity. Some of those establishments are still cutting jobs as a result.
Casinos in Louisiana, for example, can open at half-capacity. But Boyd Gaming Corp., which operates five casinos in the state, has informed 1,500 of its workers that with financial losses mounting, they could be laid off by early July.
And in some especially hard-hit sectors, like the hotel and travel industries, corporations are now slashing white-collar workers because their business remains far below pre-pandemic levels. This week, Hilton Hotels said it would cut 22% of its corporate global workforce — about 2,100 jobs.
Although consumer spending, the primary driver of the U.S. economy, is recovering from its low in mid-April, it remains far below its pre-pandemic level, according to data compiled by Opportunity Insights. That trend may be forcing changes at some companies that managed to withstand the initial shutdowns. AT&T, for instance, said this week that it plans to cut 3,400 technical and clerical workers over the next few weeks. It also plans to permanently close 250 of its Mobility and Cricket Wireless stores.
“We’re starting to see more job losses among higher-skilled positions that are harder to recall,” said Brad Hershbein, a senior economist at the Upjohn Institute.
And some states may still be clearing backlogs of applications from weeks or months ago.
Corinne Cook, who lives in Kissimmee, near Orlando, just received her first unemployment payment last week, after being laid-off from her job in mid-April. Cook, 28, moved to the area in September for an 18-month contract position as a 3-D modeler for Walt Disney, a job involving sculpting character prototypes that were printed on 3-D printers. She lost her job when the parks closed down.
She’s receiving the minimum state unemployment benefit from Florida, $125 a week, because the state has no record of her prior earnings in New Jersey, even though she said she has uploaded, mailed and faxed her documents from her job there. If her previous earnings were properly credited, her state benefits would more than double. She is grateful, though, for the extra $600 in federal unemployment benefits, which have allowed her to pay some bills.
Dealing with the state’s bureaucracy “was very stressful,” she said.
Daco of Oxford Economics said he still expects the June jobs report, to be released in early July, to show another hiring gain. But these figures will be particularly hard to forecast. Tens of millions of people may be flowing in and out of work each month, he noted, making it much more difficult to forecast where the job market is headed.
The jobs report for May had suggested that the damage might have bottomed out. The unemployment rate declined from 14.7% to a still-high 13.3%.
Even so, nearly 21 million people are officially classified as unemployed. And including people the government said had been erroneously categorized as employed in May and those who lost jobs but didn’t look for new ones, 32.5 million people are out of work, economists estimate.
Thursday’s report showed that an additional 760,000 people applied for jobless benefits last week under a new program for self-employed and gig workers that made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.
Other recent data have been more encouraging and suggest that the lifting of shutdown orders has sparked some pent-up demand from consumers. Most economic gauges remain far below their pre-pandemic levels, though, and some analysts question whether the recent gains can be sustained, especially if the virus were to surge back.
Last month, retail and restaurant sales jumped nearly 18%, the government said Tuesday, retracing some of the record plunges of the previous two months. Still, retail purchases remain a sizable 6% below their year-ago levels.
One key reason why consumer spending has somewhat rebounded is that government aid programs, from one-time $1,200 stimulus checks to $600-a-week in supplemental federal unemployment aid, have helped offset the loss of income for laid-off Americans. Yet nearly all the stimulus checks have been issued. And the supplemental federal jobless aid is set to expire July 31.
“Recently, some indicators have pointed to a stabilization, and in some areas a modest rebound, in economic activity,” Federal Reserve Chairman Jerome Powell said Tuesday in testimony to a Senate committee. Yet “until the public is confident that the disease is contained, a full recovery is unlikely.”


fortune--2020-06-20--Racism is rampant on Reddit, and its editors are in open revolt

A step toward justice : The pandemic is opening the theatre to BIPOC audiences

The volunteer moderators of Reddit’s r/blackladies community—an online message board that currently has over 40,000 members—wrote an open letter outlining their frustrations with the popular website in August 2014. They had pitched their message board, known as a subreddit, as a safe space for Black women, but were being deluged with hateful comments and links to racist content from anonymous accounts. “They are relentless, coming in barrages,” the moderators wrote. “We have a racist user problem and Reddit won’t take action.”
Several months later Alexis Ohanian, one of Reddit’s co-founders, joined a comment thread on r/blackladies discussing the letter. Ohanian, who had recently returned to the company as its executive chairman, said protecting communities like theirs from abuse was a “top priority.” He solicited suggestions on how to do it, and expressed interest in an “ongoing dialogue with all of the mods who signed onto the open letter.”
Reddit user TheYellowRose, a r/blackladies moderator who helped write the letter said in a recent phone interview that Ohanian’s promised dialogue never materialized. To TheYellowRose, who asked to be identified only by her screen name because she is still regularly subjected to racist abuse and fears physical violence if her identity is revealed, Ohanian’s initial enthusiasm for the idea seemed like just another example of the company’s leaders trying to say the right things without seriously confronting the ways their site harbored extremists and gave them a place to organize.
Reddit has faced several potential inflection points in its approach to racism in the six years since then, but has never undertaken a full enough reckoning to satisfy its critics. It’s facing another big moment in the aftermath of the killing of George Floyd. Once again, the pressure is coming in part from the volunteers who moderate Reddit’s countless message boards. On June 1, Steve Huffman, another co-founder who has been chief executive since 2015, sent a note to Reddit employees voicing support for the Black Lives Matter movement. “We do not tolerate hate, racism, and violence, and while we have work to do to fight these on our platform, our values are clear,” he wrote.
Many or the site’s users felt they’d heard this too many times before. Several days later, moderators from over 800 message boards began signing onto an open letter calling on the company to ban hate speech, shut down racist and misogynistic subreddits and offer better support to moderators by doing things like hiring more community managers. “We’d like to see them actually take seriously the white supremacy problem they have,” said Therese Singer, a retired high school English teacher in her late 60s who spends several hours a day moderating dozens of Reddit forums. She asked to be identified by her maiden name because she feared retaliation online.
This time, Ohanian isn’t endeavoring to find a solution himself. Ohanian—now best known as the spouse of tennis icon Serena Williams, one of the most famous Black celebrities in the world—resigned from Reddit’s board on June 5, breaking ties with the company. He asked Reddit to appoint a Black board member to replace him. “It is long overdue to do the right thing. I’m doing this for me, for my family, and for my country,” he tweeted. Ohanian declined an interview request.
Ohanian’s move was intended as a public gesture to address a much-needed lack of diversity. But the move was also an admission of personal defeat and illustration of the dysfunctional relationship between Reddit’s founders. Huffman said in an interview this week that Ohanian hadn’t told him of his planned departure in advance, and that they hadn’t talked since.
Huffman said the company will, for the first time, implement a policy explicitly prohibiting hate speech. To replace Ohanian on the board he appointed Michael Seibel, the CEO of Y Combinator, the famous startup incubator that was one of Reddit’s early investors. Seibel, who Huffman has known for years, is Black. At a forum for Black entrepreneurs hosted by Bloomberg, Seibel said that there was an inherent responsibility for a site of Reddit’s scale to maintain certain standards. “It really pisses me off when people are just saying, ‘Hey this is just a website, people are going to do whatever they’re going to do,’” he said.
TheYellowRose wasn’t impressed with Ohanian’s gesture. “He was in a position to do something and instead he left. I wish he had done something and then given his seat to somebody else, instead of just leaving,” she said. “We have been hoping and wishing that having a Black daughter and a Black wife would help him see the light, so to speak, and do something.”
As to whether Huffman can help reform Reddit, said TheYellowRose, “I guess that depends on what Reddit’s goal is. If it’s to be a free speech haven where white nationalists can continue to recruit people, yeah, he’s the right guy. If it’s a place where everybody should feel safe and welcome, then he’s got some work to do.”
The content moderation policies of companies like Facebook, Twitter and Alphabet’s YouTube have been at the center of the national political debate. Reddit has many of the same problems. But the site has kept a somewhat lower profile in part because, despite being one of the most popular websites on the internet, it has never become a huge success as a business.
Huffman and Ohanian started Reddit in 2005, and sold it to Conde Nast a year later. This made them personally wealthy, but turned the site into a small media property inside a broader conglomerate, instead of a technology company in its own right. While Facebook has changed drastically over the last decade, there have been fewer major changes to Reddit, which now operates independently but still counts Advance Publications Inc., Conde Nast’s parent company, as a major shareholder. It remains a series of message boards whose pseudonymous users vote on which posts should be most prominently displayed.
From its earliest days, Reddit developed a reputation as a free-for-all, something its founders have alternately embraced or promised to control. In 2012, Ohanian referred to it as a “bastion of free speech.” Three years later, describing the company’s intention to clean out the more offensive corners of the site, Huffman had a different message. “Neither Alexis nor I created Reddit to be a bastion of free speech, but rather as a place where open and honest discussion can happen,” he wrote in July 2015.
The company deflects significant responsibility—and stress—onto moderators, who are unpaid. In the aftermath of the 2014 killing of Michael Brown in Ferguson, Missouri, for instance, the moderators of the r/blackladies subreddit compiled a series of racist messages they’d received and presented them to a staff administrator, asking the site to take some action against their harassers. “There is no doubt that there are some idiotic trolls commenting on your subreddit,” the administrator replied in a message viewed by Bloomberg. “This happens in every subreddit and really it is up for the mods to deal with.”
Reddit’s attempt to police speech on its platform has been partially based on the fatalistic view that doing so is pointless, because the site is just a reflection of the world at large. In fact, researchers at Georgia Tech showed that Reddit can be effective when it does take action. In 2015 the company removed a number racist subreddits, including a notorious one called Coontown. The result was that many abusive accounts that had posted regularly on those forums shut down altogether, and remaining accounts that had posted on the banned forums posted hate speech at drastically lower frequencies.
Independently-developed tools have also been successful.Moderators at r/blackladies and other subreddits praised a tool that allows moderators to prevent any user who has posted on certain other subreddits from commenting in theirs. This has cut off the ability of people who would use certain subreddits to plan harassment campaigns against others, although it has occasionally stymied the ability of some people to post in certain places even if they were uninvolved in abuse.
In the run-up to the 2016 presidential election, a sort of omni-channel for the site’s far right emerged in the form of the r/The_Donald. Ostensibly a subreddit for supporters of Donald Trump, it became a place to market-test right-wing memes and organize harassment campaigns, often against the site’s non-white communities. “Reddit ignored r/The_Donald for months and years as they were perpetually breaking the site’s terms of service almost daily” said Robert Allam, widely considered among the most prolific Reddit posters and moderators of all-time.
Reddit “quarantined” The_Donald in 2019, making it invisible in searches. Its moderators then tried to reconstitute the community on their own website, and it essentially collapsed on Reddit.
Reddit’s wavering response to subreddit was emblematic of a broader pattern of the company’s leadership resisting action until doing so became untenable. At a board meeting in March 2018, for instance, Huffman and his executive team gave a presentation about controversial subreddits, including a forum called r/watchpeopledie, where users posted videos of people—often non-white citizens of developing countries—dying.
Huffman and his team boasted they had convinced the community’s moderators not to encourage people to post suicide videos, bringing it into technical compliance with Reddit’s policy against self-harm, according to two people who were present. Ohanian, then a board member, pushed back. He argued the company should shut down communities like this altogether, rather than trying to get them to make changes to bring them within the letter of Reddit’s content guidelines. But Ohanian couldn’t convince Huffman or the board to go along with him, and r/watchpeopledie remained on Reddit.
Huffman defends the decision. “The argument that that community made is that this is not a community glorifying violence, this is an outlet for folks,” he said this week, explaining his thinking at the time.
Still, Reddit quarantined the message board in September 2018 after continued criticism. Then in March 2019 a gunman killed 51 people in Christchurch, New Zealand, and the video proliferated on the subreddit. Reddit finally took r/watchpeopledie offline. “Sharing that video itself was an act of violence, that was an act of terrorism,” Huffman said. “With that community, we hit this tipping point.”
Huffman’s latest tenure as CEO has been marked by periodic controversy. Soon after the 2016 election, he secretly edited live comments from unsuspecting users who had mocked or criticized him, removing his screen name. Huffman was quickly forced to apologize. The following year, he told a reporter at the New Yorker about his doomsday plans, saying that if society collapsed, “I will probably be in charge, or at least not a slave, when push comes to shove.”
Reddit’s management has also launched products with little seeming foresight about the potential for abuse. Last year, Reddit created icons that users could buy to tag posts. One of them was a monkey, which some users soon began using as a way to harass Black users. Earlier this year it introduced a new public chat feature tied to subreddits without giving moderators the authority to supervise them; the chat rooms were soon targeted with harassment and the company had to shut them down after moderators complained. Reddit removed the monkey after it was abused and says it will bring back the chat feature after some updates.
This has led to disillusionment among some people familiar with Reddit’s inner workings. Employees have complained about the lack of diversity at the company, according to a person familiar with the matter. “You need people running platforms to empathize with the users who are experiencing hate, racism, violence harassment, and misogyny, to actually want to get rid of it and do the work to actually fix these platforms,” said Ellen Pao, who served as Reddit’s interim CEO in 2014 and 2015.
While Huffman has worked to signal to his critics that this time will be different, some of Reddit’s other leaders seemed to be already dampening expectations. At the event Monday, Seibel said he joined the board because Huffman is a personal friend, and planned to be deferential. He said he didn’t think his job “is to tell Reddit what to do and what not to do.”
Reddit’s general counsel, Ben Lee, explained Huffman’s plans for a hate speech policy by saying the company planned to clarify its values. “Our existing policies are quite similar to hate policies on other platforms, however, they will be updated to prohibit the promotion of hate based on identity and other characteristics, vulnerabilities, etc.,” he said in a statement. “We will also step up enforcement to address the policy change.” The company believes there are fewer hateful communities left on its platform and will target individual bad faith users.
Reddit’s executives are going to be facing down an audience whose scars from past rounds of this same fight have hardened into a deep sense of skepticism. “We hope that Reddit will not just share empty platitudes—but will take a meaningful stand against hate, and take these recommendations to heart,” wrote the moderators who signed onto the open letter this month.
Still, many of them are still holding out hope that engaging with the company’s leadership can lead to change. Huffman has held several hour-long video chats with groups of moderators in the past week. One of the people in attendance was TheYellowRose. “It was almost surreal to talk to him,” she wrote in an email afterwards, “after years of only knowing him from thumbnail images.”


fortune--2020-06-20--A step toward justice: The pandemic is opening the theatre to BIPOC audiences

My family has never seen my work.
I have been fortunate to have projects developed and produced from coast to coast, and to be on (what I hope will remain) a steady incline in my career. But my family, whose long and beautiful histories have inspired my work since I began this journey, have never seen a single play I have written or directed. Much of what I create is about the Seminole Nation, but I have never had a cousin or an elder in the audience. Instead, non-Native theatre companies have presented my work to crowds who are predominantly (if not all) non-Native.
My family lives in Seminole Nation, hundreds (and often thousands) of miles away from the theatres that have presented my work. And when theatre is happening around them, they can’t afford to go.
Plus—or perhaps I should say “mostly”—I’m not sure my family would feel welcome or safe at the theatre. I know I have felt unsafe there many times.
When I lived in Washington, D.C., I wanted to see a particular dance company perform at the Kennedy Center. When I arrived, there was an event happening at the other end of the building, and within minutes of walking through the door, I got mistaken for a server.
As an Indigenous person and as a person of color, I clocked that interaction for what it was. Furthermore, as I walked to the box office, I noticed I was being stared at. (At first I thought it was because I was a young person, but I saw maybe a dozen others in the lobby.) When I finally got to the box office and asked for a ticket, the attendant reiterated the $45 price multiple times to make sure I “knew how much it cost” before running my debit card. After it went through, they were visibly surprised that it did not decline.
I won’t lie to you. I really wanted to leave. I did not feel welcome, and I definitely did not feel safe. When I was humiliated at the box office while other patrons were clearly eavesdropping, I wanted to turn around and head back to Suitland, Md. However, I knew that I would never get to see that dance company otherwise, so I put a smile on my face, ignored the stares, and made my way to my seat (even after being stopped by an usher).
There have been countless articles written about how BIPOC, people with disabilities, and so many more are treated when they attend the theatre, so this one story may not shock you. But if it does, I hope you can understand when I say that sometimes, the theatre is not a safe place. I hope you can understand that if that dance company’s production had been available online, I would have stayed home to watch it.
***
I live in Tulsa. Although there is a robust, predominantly volunteer-based theatre community here, I do not have access to major regional directors’ work. If theatres streamed their performances, if theatres allowed me to buy a ticket to a New York City production from Indian Country, if offering digital programming to be consumed was an option, I know that I would partake in it. I know thousands of other people would too. On May 1, over 20,000 people streamed a recording of the contemporary opera Angel’s Bone. Nearly 1 million people watched the National Theatre’s Jane Eyre. Disney+ will soon release a recording of Hamilton, and how many people do you think will stream it from home?
In this specific moment, I love the abundance of recorded plays being offered. My sincerest hope for post-pandemic theatre is that companies continue to record and share their productions and that all of the unions get on board in the name of accessibility.
Obviously theatre is meant to be experienced live. That is what makes our medium so special. However, I firmly believe that geographic, economic, and/or medical barriers should never prohibit anyone from experiencing our work. During quarantine, I cannot count the number of conversations I’ve had with friends and colleagues about how great it has been to watch plays from around the world that we would never be able to see otherwise. I also cannot count the number of times I’ve seen artists express their hatred of recorded productions because they “lessen” the quality of the work.
Here’s the thing: Accommodations make theatre better for everyone. You may hate the idea of recordings, of every performance being live captioned, or of ASL interpreters being part of every show, but that does not negate the fact that those services make our art more accessible. I am not advocating for the permanent closure of theatres or for only releasing digital recordings. I am advocating for a blend—presenting live theatre for those who can and want to attend and also making every production available online.
I imagine a theatre that gives someone who lives 1,000 miles away the opportunity to experience a wonderful production. I imagine theatre makers who are cognizant that recorded productions are necessary for folks who cannot gather until a vaccine is readily available. I imagine theatre companies embracing the fact that recordings are safer for those who experience anxiety or discomfort while visiting a physical venue. I imagine a theatre that gives audiences more choices to see amazing work because it makes so much more sense.
I imagine theatres working diligently to make their physical spaces safer for audiences through rigorous work on anti-racism and anti-ableism, and while that work is being done, I imagine them using digital performances as a tool for outreach.
I imagine texting a link to my grandma, aunties, cousins, and elders to see my work for the first time.
Tara Moses is an award-winning playwright, director, artistic director of telatúlsa, and citizen of the Seminole Nation of Oklahoma. This essay is an excerpt from “I Imagine a Just Theatre,” which is published in full in The Flashpaper: Theatre’s Thoughts on Right Now, a print journal that supports indie theatre artists.


fortune--2020-06-20--Apple closes reopened stores in four states with surging coronavirus cases

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Apple’s Friday decision to close stores in four states with surging coronavirus cases highlights a question that other businesses may soon face: Stay open or prepare for more shutdowns?
Apple, like many other major U.S. retailers, shut down all of its U.S. locations in March. On Friday, it said it would shut 11 stores, six in Arizona, two in Florida, two in North Carolina and one in South Carolina, that it had reopened just a few weeks ago.
The move heightens concerns that the pandemic might keep the economy in the doldrums longer than expected. Those worries sent stocks on Wall Street lower. It’s not clear whether other retailers will follow en masse, although one analyst expects hard-hit stores to stay open unless forced to close by local authorities.
Many other businesses, including manufacturing, travel, dining, and entertainment, have been steadily reopening where they can while taking health precautions. But some have recently pulled back or paused their plans. The Cruise Lines International Association, for instance, announced Friday that ships will not be sailing from U.S. ports until at least Sept. 15, extending a pause put in place because of the coronavirus pandemic.
The auto industry, meanwhile, has seen its efforts to restart production hampered in part by infected workers.
Because U.S. efforts to contain the pandemic haven’t been particularly successful, the situation “could ultimately lead to a need for more prolonged shut-downs” that would reduce consumer spending and cost jobs, said Eric Rosengren, president of the Federal Reserve Bank of Boston. In public remarks Friday, Rosengren said he expected the economic rebound this year would be less than what was initially hoped for at the pandemic’s outset, and that the unemployment rate would remain in double-digits.
States such as Utah and Oregon are pausing the reopening of their economies amid a spike in cases, while others like Texas and Arizona have not changed their plans. Arizona this week did mandate that businesses implement social distancing, and Phoenix made masks mandatory in public.
Like many of the biggest players in the technology industry, Apple has been faring far better than most companies amid pandemic-induced recession. The store closures won’t put a significant dent in Apple’s sales, said Wedbush Securities Daniel Ives, but they are “a worrisome trend.”
The Cupertino, California, company has continued to sell iPhones and other products online, and other retailers can do so as well if they decide to close, said Craig Johnson, president of retail consultancy Customer Growth Partners.
“I don’t think this is going to be a giant stumbling block for Apple or anybody else. You can still get almost everything you need online somewhere,” he said.
Johnson noted that the country’s biggest retailers, Walmart and Target, did not shut down, and neither did appliance chains like Home Depot and Lowe’s. If other chains that aren’t deemed essential do shut down stores, he would expect closures to be limited to areas with rising cases.
Still, retail has been hit hard, with declining profits and bankruptcies. Retail earnings shrank 70% in the first quarter, excluding Walmart, said Ken Perkins of Retail Metrics, and second-quarter earnings are expected to drop another 45%. Department stores Neiman Marcus and J.C.Penny and clothing chain J. Crew have all filed for bankruptcy protection. Home-goods chain Pier 1 is shutting down.
“Remaining open may be existential for some retailers and I would expect they will stay open where local regulations allow,” Perkins said in an email. He expected that they would offer curbside pick-up “at a bare minimum” even if doors were shut again in specific areas where they are required to do so.
Disney, which has been planning to reopen Disneyland in California and Disney World in Orlando, Florida, in July, is not changing its plans. Universal Orlando, Busch Gardens Tampa Bay and SeaWorld have already reopened in Florida. Cases are also rising in Florida, and some restaurants and bars said they were temporarily closing again.
Movie theater chains are also reopening, with Cinemark beginning the process this week in Dallas and going nationwide in July. Regal and AMC are also set to open again in July — with mask requirements for employees and customers.
The Navajo Nation’s gambling operation had hoped to reopen its casinos in Arizona and New Mexico in mid-June but they’ll stay closed until at least early July because of the outbreak. Other casinos have closed temporarily.


fortune--2020-06-20--TSA official says the agency helped spread coronavirus

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A Transportation Security Administration official charges that the agency helped spread COVID-19 by failing to provide enough protective gear for airport screeners who are in close contact with travelers every day.
The top TSA official in Kansas, Jay Brainard, says the agency didn’t train staff for the pandemic and barred supervisors like him from giving screeners stockpiled N95 respirators in March when facial coverings such as surgical masks were hard to buy.
“I have no doubt whatsoever that our people became Typhoid Marys and contributed to the spread of that virus because TSA senior leadership did not make sure (screeners) were adequately protected,” Brainard told The Associated Press on Friday.
Brainard filed a complaint against his own agency with the Office of Special Counsel, which handles whistleblower complaints, earlier this month. Late Thursday, the special counsel ordered TSA’s parent agency, the Homeland Security Department, to conduct an investigation.
The TSA said in a statement that it has followed guidelines set by the Centers for Disease Control and Prevention in deciding protection standards for workers.
Spokeswoman Lisa Farbstein said that at the start of the virus outbreak, TSA told employees that masks were optional, then made them mandatory at airport checkpoints in the first week of May.
Airport officers are required to wear nitrile gloves when they screen passengers. They must change gloves after every pat-down, and travelers can request the use of new gloves at any time, Farbstein said. Eye protection has remained optional for screeners.
Farbstein added that plastic barriers have been installed at security checkpoints and areas where checked bags are dropped off for screening.
Brainard disputed parts of the TSA statement, saying screeners have not been told to change gloves after every pat-down. He said new guidelines that took effect last week still have gaps, including no procedure for how to handle travelers who appear to be sick and little or no contact-tracing after TSA personnel become sick.
Brainard’s complaint and the special counsel’s demand for an investigation were earlier reported by the Washington Post and National Public Radio.
Air travel in the U.S. remained at normal levels until early March despite rising numbers of cases and deaths tied to the coronavirus. It then plunged by about 95% but has since recovered slightly as more states relax stay-at-home orders.
Brainard said he wants TSA to take corrective steps to protect health as air travel recovers.
TSA says on its website that 706 of its employees have tested positive for COVID-19 and five have died, plus one screening contractor.
TSA Administrator David Pekoske said in March that the agency was prepared for the pandemic, with adequate equipment for screeners.
“Our officers wear gloves as a matter of course anyway … that’s the primary means of transmission for the disease,” Pekoske told a Senate hearing. “We have also authorized our officers in the screening checkpoints, if they would like, to wear a surgical mask. They are permitted to do that, and we provide those masks.”
Brainard said that until April, he and other TSA federal security directors were told to withhold N95 respirators that they had in stock at airports but to allow employees to bring their own masks to work.
“If you remember, you couldn’t get masks” because they were sold out, he said. “To say to these people, ‘You can go out and buy your own,’ that’s unacceptable.”
Brainard joined TSA as an air marshal when the agency was created after the September 2011 terror attacks. He has been an outspoken critic of the agency’s top leadership, testifying before a congressional committee in 2016 and filing two previous whistleblower complaints.
Brainard filed the virus-related complaint on June 3. The special counsel declined to comment, but the order directing Homeland Security to investigate the allegations indicates that the independent federal watchdog office believes there is a “substantial likelihood” of wrongdoing.
Homeland Security could refer the matter to its inspector general, which is the hope of Brainard and his lawyer, Tom Devine of the Government Accountability Project in Washington, D.C. The department, however, could send the complaint to TSA.
The special counsel will review the findings either way and issue a report to the White House and Congress.


fortune--2020-06-20--Judge rules John Bolton can publish his book despite Trump’s efforts to block it

A federal judge ruled Saturday that former national security adviser John Bolton can move forward in publishing his tell-all book despite efforts by the Trump administration to block the release because of concerns that classified information could be exposed.
The decision from U.S. District Judge Royce Lamberth is a victory for Bolton in a court case that involved core First Amendment and national security concerns. But the judge also made clear his concerns that Bolton had “gambled with the national security of the United States” by taking it upon himself to publish his memoir without formal clearance from a White House that says it was still reviewing it for classified information.
“Defendant Bolton has gambled with the national security of the United States. He has exposed his country to harm and himself to civil (and potentially criminal) liability,” Lamberth wrote. “But these facts do not control the motion before the Court. The government has failed to establish that an injunction will prevent irreparable harm.”
From a practical perspective, the ruling clears the path for a broader election-year readership and distribution of a memoir, due out Tuesday, that paints an unflattering portrait of President Donald Trump’s foreign policy decision-making during the turbulent year-and-a-half that Bolton spent in the White House.
Soon after the ruling was released, Trump tweeted that Bolton “broke the law by releasing Classified Information (in massive amounts). He must pay a very big price for this, as others have before him. This should never to happen again!!!”
Bolton’s lawyers insisted that Bolton had spent months addressing White House concerns about classified information and that Bolton had been assured in late April by the official he was working with that the manuscript no longer contained any such material. Bolton’s team said the Trump administration’s efforts to block the book were a pretext to censor him for an account that the White House found unfavorable.
The Justice Department sued this past week to block the book’s release and to demand that copies be retrieved. Officials said the book contained classified information and that Bolton had failed to complete a prepublication review process meant to ensure former government officials do not improperly disclose national security secrets in books they write. The administration submitted written statements from multiple officials attesting to the national security concerns of releasing the book.
The judge did not take issue with those concerns in his 10-page order. But with 200,000 copies of the book already distributed to booksellers across the country, attempting to block its release would be futile, the Lamberth wrote. Major media organizations also obtained the book and published comprehensive accounts about it.
“In taking it upon himself to publish his book without securing final approval from national intelligence authorities, Bolton may indeed have caused the country irreparable harm. But in the Internet age, even a handful of copies in circulation could irrevocably destroy confidentiality,” Lamberth wrote.
Just one individual with a book in hand could publish its contents from a local coffee shop, he said.
“With hundreds of thousands of copies around the globe — many in newsrooms — the damage is done. There is no restoring the status quo,” the judge wrote.
Lamberth appeared divided during arguments on Friday. He observed that Bolton had not waited for official assurance from the White House that the book was free of classified information. But Lamberth also suggested that he was powerless to halt the book’s release given that hundreds of thousands of copies had already been shipped.
“The Room Where it Happened: A White House Memoir” depicts a president whose foreign policy objectives were inexorably linked to his own political gain.
Bolton says Trump “pleaded” with China’s Xi Jinping during a 2019 summit to help Trump’s reelection prospects. Bolton writes that Trump linked the supply of military assistance to Ukraine to that country’s willingness to conduct politically charged investigations into former Vice President Joe Biden and his son Hunter — allegations that were at the heart of an impeachment trial that ended with Trump’s acquittal by the Senate in February.
Bolton’s lawyers argued that he had labored painstakingly for months with the White House to address concerns over classified information. In late April, the career official he worked most closely with and who had done a line-by-line edit notified him that she had completed her revisions and that the revised manuscript did not contain classified information. But another White House official soon after embarked on an additional review and identified material that he said was classified.
Bolton’s lawyers say the White House assertions of classified material were an attempt to censor him over a book the administration simply finds unflattering.
“If the First Amendment stands for anything, it is that the Government does not have the power to clasp its hand over the mouth of a citizen attempting to speak on a matter of great public import,” Bolton’s attorneys wrote in a court filing.
Trump on Thursday called the book a “compilation of lies and made up stories” intended to make him look bad. He tweeted that Bolton was just trying to get even for being fired “like the sick puppy he is!” Other administration officials who figure prominently in the book, including Secretary of State Mike Pompeo, denied comments or actions that were attributed to them and joined the president in condemning the book.
Even Democrats who pounced on some of Bolton’s anecdotes to condemn the president nonetheless expressed frustration that he had saved them for his book instead of participating in the impeachment case. Bolton refused to voluntarily testify in the impeachment inquiry, and the House ultimately moved forward with its case without subpoenaing him.


fortune--2020-06-20--Simple math suggests a complex backstory behind landmark LGBT rights Supreme Court decision

Supreme Court watchers were left scratching their heads when they learned Justice Neil Gorsuch was the author of Monday’s landmark LGBT rights ruling, but not because the appointee of President Donald Trump might have been expected to side with his conservative colleagues in dissent.
Rather, it was a matter of math.
Each of the nine Supreme Court justices usually writes at least one opinion for each month the court hears arguments. Gorsuch’s opinion was his second for October while three of his colleagues wrote nothing. That highly unusual lineup suggests something going on behind the scenes.
Gorsuch became the only justice other than retired Justice Anthony Kennedy to author a major high court ruling in favor of LGBT rights when he wrote the decision declaring workplace discrimination on the basis of sexual orientation or gender identity illegal under federal civil rights law. The 52-year-old justice earlier wrote the ruling requiring unanimous jury verdicts in state criminal cases.
The answer is obvious in one sense. He wrote opinions in both cases that attracted a majority of the court. But how he came to write them is a mystery.
After each month of arguments, which the court calls a sitting, Chief Justice John Roberts assigns the opinions for cases in which he is in the majority. Otherwise, the senior justice in the majority — usually either Clarence Thomas or Ruth Bader Ginsburg — decides who gets to write for the court. The justices work together to ensure there is a relatively even distribution of labor.
It seems unlikely, based on the usual practice, that Gorsuch would have been assigned both majority opinions in October, especially since Roberts and Ginsburg were two justices who didn’t write at all from that month. Justice Brett Kavanaugh was the third.
One of those three justices certainly was working on an opinion in a case that settled before the court could issue a decision. But that still leaves two justices with nothing.
Occasionally, positions shift after the initial tally taken just after the arguments, either because a draft majority opinion is unpersuasive to a justice, or a dissent is compelling enough to draw another vote. In rare instances, an opinion originally circulated as a dissent becomes the majority.
Such a shift might have happened here or in the case about unanimous juries, although there is not much evidence to suggest it with either one.
Georgetown University law professor Martin Lederman acknowledged on Twitter that he was speculating when he wrote that Gorsuch may have been undecided at first and that Roberts drafted an opinion siding with the employers. “Gorsuch didn’t buy it; drafted this instead, and the Chief came over to it,” Lederman wrote.
Or, he added, maybe the change happened in the juries case.
Majority opinions often have fairly lengthy recitations of the facts of the case. Gorsuch’s opinion basically devoted one paragraph each to the three fired employees whose cases the court decided Monday.
But the justice offered an explanation for the brevity. “Few facts are needed to appreciate the legal question we face. Each of the three cases before us started the same way: An employer fired a long-time employee shortly after the employee revealed that he or she is homosexual or transgender — and allegedly for no reason other than the employee’s homosexuality or transgender status,” he wrote.
Among other related questions is, what took so long? More than eight months elapsed between the arguments and Monday’s decision. That can happen at the court, but there often is a story behind the delay.
A highly anticipated case on affirmative action involving the University of Texas was argued in October 2011 and not decided until late the following June. The 7-1 outcome, in the end, decided very little.
Several years later, author Joan Biskupic wrote in “Breaking In,” her biography of Justice Sonia Sotomayor, that Sotomayor had drafted a biting dissenting opinion that appeared to have changed some conservative justices’ votes and ended up allowing the university to preserve its admissions policy.
The draft opinion eventually saw the light of day two years later, when the court upheld a constitutional amendment in Michigan that banned the consideration of race in public college admissions.
When Justice Harry Blackmun’s papers became public in 2004, they revealed that Kennedy had switched his vote — and the outcome — twice in 1992, in an abortion case that reaffirmed the 1973 Roe v. Wade ruling and in a separate case banning clergy-led prayers at public school graduations.
Though he started out on the other side, Kennedy wound up writing or co-writing the majority opinion in both cases.