fortune--2020-06-11--Tesla’s love affair with China

Tesla’s love affair with China

Bendable , with the help of Pete Buttigieg , wants to create an educational marketplace

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American companies spent an estimated $100 million lobbying Congress for China’s admission to the World Trade Organization in 2000. Two decades later, U.S. business leaders are so exasperated with the way their companies are treated in what is now the world’s second-largest economy that some have emerged as China’s harshest critics. Far from counseling President Donald Trump to exercise restraint in confronting China, many have egged him on—and offered suggestions for applying additional pressure.
Wall Street Journal reporters Bob Davis and Lingling Wei offer a vivid account of how corporate America’s romance with China soured in Superpower Showdown: How the Battle Between Trump and Xi Threatens a New Cold War. (The book is out this week; you can read a Journal excerpt here.)
Showdown makes for fascinating, if grim reading. On the U.S. side, to hear Davis and Wei tell it, business and government leaders alike naively assumed that, as China’s economy expanded and became more complex, its leaders would abandon central planning and industrial policy for a more freewheeling, market-oriented system resembling American capitalism. The Chinese, for their part, assumed the levers of American democracy to be completely controlled by banks and businesses, who wouldn’t dare risk their access to the world’s fastest-growing market.
Both sides got it horribly wrong. China’s communist rulers lost whatever faith they had in the magic of the American economic model after the Global Financial Crisis, and in 2013 chose as their “paramount leader” a man who distrusted markets and saw expanding the role of state-owned firms as the surest way to strengthen China and consolidate his own power. Then in 2016, Americans, in a rebuke to Wall Street and big business, elected a populist reality TV star who played to the resentments of working-class voters by railing against China and illegal immigrants.
The end result: a mutually destructive trade standoff that the authors suggest is unlikely to end even if Trump loses the election. “Trump has reinvigorated the use of tariffs,” they write. Any Democrat who defeats him “would inherit a world where the United States has tariffs on hundreds of billions of dollars in imports from China and other nations. No president would simply roll back those tariffs. He or she would want a lot in return, meaning that the trade fight with Beijing would continue.”
The authors argue that the “phase one” trade deal struck by the two nations in January, even if it holds, will not fundamentally alter the way China does business. China’s leadership, they conclude, “finds it increasingly difficult to cut a deal with Washington, whoever is president, without being seen as caving in to what it views as American hegemony.”
There is one American business leader, though, who remains very much in love with China: Tesla founder Elon Musk.
On Wednesday, Tesla’s share price soared 9% to $1,025, a record-high that put the company’s valuation within hailing distance of Toyota Motor Corp. The trigger for Wednesday’s surge was a Musk memo to employees signaling plans to begin production of the all-electric Tesla Semi truck. Tesla’s valuation has more than doubled since the beginning of the year, in defiance of the global pandemic, on expectations that the future of the global auto industry is electric. But that bullish view is buoyed by Tesla’s unique position in China, the world’s largest market for electric vehicles, where late last year Tesla began production of the Model Y compact sport-utility vehicle at its sprawling, $5 billion Gigafactory outside Shanghai.
Musk’s vow to deliver 500,000 vehicles globally in 2020 hangs in doubt after local authorities in Fremont, California forced him to close the Tesla Gigafactory there for more than a month to stop the spread of the coronavirus. He feuded publicly with the local sheriff and police department, then sued Alameda County before eventually reopening the plant in defiance of local health officials.
In China, Musk’s relations with government are far more cordial. The Shanghai plant, which is financed by $1.6 billion in loans from Chinese banks, has been put on the fast-track for just about everything, including construction permits, regulatory approvals, and getting hooked up to the power grid.
In January 2019, after attending a groundbreaking ceremony for the plant, Musk jetted to Beijing where he met with Premier Li Keqiang in the party’s leadership compound in Zhongnanhai, next to the Forbidden City. Li offered to make Musk a permanent resident of China. Musk’s reply: “I love China very much and am willing to come here more.”
Those plans, as well as production at the Shanghai plant, were interrupted by the outbreak of the coronavirus in January. But within two weeks, the plant was back in business, thanks in part to local government officials who helped Tesla secure 10,000 masks and even arranged dormitories for plant workers.
Tesla sold about 11,000 Model 3 vehicles in China in May, up from 3,635 in April, according to the China Passenger Car Association. “Tesla has had a phenomenal run in China since opening the Shanghai Gigafactory,” said Michael Dunne, CEO of San Diego-based auto industry consultancy ZoZo Go. In China, “they’re just killing it.”
For more on the Chinese auto industry, don’t miss our Eastworld Spotlight interview with Dunne. Grady has a summary here.
More Eastworld news below!
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
South Korea
The U.S. is planning packed political rallies while recording 20,000 COVID-19 cases per day, but Daegu, a city in southern South Korea, is refusing to relax some social distancing measures amid relative safety. Daegu was once the epicenter of COVID-19 in South Korea, but transmission of the virus has all but vanished. The city’s shops, offices, and schools have largely reopened, but masks remain ubiquitous, large gatherings are banned, and students returning to college are required to take coronavirus tests before moving back to their dorms. Wall Street Journal
Breaking the banks
HSBC was caught in geopolitical crossfire again this week after a company executive told U.K. Prime Minister Boris Johnson that the company may be at risk of repercussions in China if the U.K. blocks the Chinese tech giant Huawei from building its 5G networks. This caused U.S. Secretary of State Mike Pompeo to decry China’s “coercive bullying tactics,” and said that HSBC should serve as a “cautionary tale” for businesses working with Beijing. Last week, the London-based bank’s head of Asia operations controversially declared support for the new national security law in Hong Kong, but it doesn't seem as though that was enough to earn Beijing's goodwill. Fortune
Grounded
It is not a good time to be running an airline. This week, the Hong Kong government gave Cathay Pacific, the city’s flagship carrier, a $3.9 billion dollar bailout amid record losses induced by the pandemic and political unrest. Airlines across Asia are in need of aid—some are getting it; others aren't. Thai Airways, Thailand’s national carrier, is undergoing ‘rehabilitation’ after reporting record losses, the Malaysian AirAsia is cutting its workforce by up to 30%, and Virgin Australia is up for sale, just to name a few. This week, Fortune’s Naomi Xu Elegant looked at how airlines in Asia are struggling to recover amid the pandemic. Fortune
A dangerous retweet
Twitter is banned in China, yet the social media platform remains an essential tool for its diplomats to communicate messaging abroad. But that only represents the tip of the iceberg in terms of how China’s state apparatus has used the platform to advance its own interests. Last fall, Twitter suspended 200,000 accounts in what it called state-backed information campaign from China. Now, in an investigation published this week, the New York Times found that thousands of accounts have acted suspiciously on the platform, working largely to amplify pro-China voices with few of their own followers. The new report suggests that China’s state-backed accounts may be growing more sophisticated by avoiding tell-tale suspicious activities like opening thousands of accounts on the same day. New York Times
A stalled economy
Chinese Premier Li Keqiang said that 600 million Chinese people still struggle to make ends meet in a press conference in late May, following the central government's annual Two Sessions meeting that sets the country's economic agenda each year. To address this, Li said, China should embrace a 'street-stall economy,' and encourage Chinese citizens looking to set up small, vendor-style shops and restaurants. Street vendors had long been a hallmark of Chinese cities until government campaigns in recent years cracked down on them for being "unhygenic and uncivilized." This contradicting messaging has left some vendors wary of going back to the streets. New York Times
Coronavirus by country
North Korea
We are only six weeks on from CNN reporting that North Korea’s leader Kim Jung Un’s health was in “grave danger.” Now, Kim’s health may be fine, but the citizens of his country appear to be in dire straights. The government of North Korea hasn’t confirmed a single case of coronavirus, but in March announced that the country was instituting quarantine measures to combat the outbreak. In May, the government said it had over 2,000 people under medical observation. Multiple outbreaks in Chinese cities along North Korea’s border have raised suspicions that the government hasn’t been forthcoming in reporting its coronavirus situation. Meanwhile, the country’s border with China, which North Koreans depend on to trade food and other essential goods, remains closed. This week, UN officials warned that the border closings may be creating a disastrous humanitarian situation in the country, with up to 40% of its population at risk of malnutrition because of the virus. DW News
Markets and movers
Jio Platforms – This week, the telecoms arm of the India’s largest conglomerate, Reliance Industries Limited, closed its eighth deal in the last seven weeks, securing a $750 million investment from the Abu Dhabi Investment Authority. The company has now raised a total of $13 billion since it secured nearly $6 billion from Facebook in April. Bloomberg
Netease – The Chinese gaming firm raised $2.7 billion in a secondary listing on the Hong Kong stock exchange on Thursday. The firm is already listed on Nasdaq, but the move may help protect it as U.S. authorities apply added pressure on Chinese companies listed on U.S. exchanges. Fortune
Tiki – This week, Vietnam’s largest e-commerce platform raised over $130 million from Northstar, a Singaporean private equity firm. It follows news that Tiki plans to merge with its largest domestic competitor Sendo, which would provide Vietnam with a powerful homegrown challenger to foreign e-commerce firms like the Singaporean firms Shopee and Lazada. Deal Street Asia
Optim – The Japanese online business platforms company is booming amid a digital push during the pandemic, pushing its founder, Shunji Sugaya, into Japan's billionaire class. Softbank had offered Sugaya $2.8 million for his company in 2000, but Sugaya turned it down and his company is now worth over $1.6 billion. Fortune
Final figure
8,981
It has been roughly one year since the first mass protest of Hong Kong pro-democracy movement on June 9 2019, when more than a million people took to the streets in opposition to an extradition bill proposed in the city’s legislature. And while Hong Kong’s protest movement faces an uncertain future in light of Beijing’s new national security law, the next battle between protesters and authorities may play out in courts. Thousands of protesters who were arrested during the city's year of unrest are awaiting charges and trials tied to their participation in the protests. On Thursday, the South China Morning Post illustrated on its front page the 8,981 people who have been arrested in protests since the first march, and the accompanying online graphic vividly captured the scope and diversity of those who've been arrested. South China Morning Post


fortune--2020-06-11--Bendable, with the help of Pete Buttigieg, wants to create an educational marketplace

Education in the United States, like much else, is in a state of upheaval. Bendable, a new community-based learning marketplace backed in part by Drucker Institute, wants to help.
The program, which launched in South Bend, Ind., last week after two and a half years of research and a $5 million investment, couples educational resources from organizations like TedX, Cell-Ed, Common Threads, the Drucker Institute, edX, Indiana University South Bend, Ivy Tech, Khan Academy, Penn Foster, and more into curated collections around a number of topics.
The classes are also available via mobile phone, and a majority of programs are free for residents of the city as long as they have a local library card.
Google.org and Walmart.org provided the initial funding for the project, and IDEO designed the user experience. Credly created a badging and credentialing system to make sure the site’s 1,200 learning resources are legitimate.
Soon, the organization will expand into a number of other small cities.
The project comes as state and local budgets for schools are rapidly declining, and COVID-19-related revenue shortfalls will lead to more cuts in the years to come. Schools, unable to open because of the pandemic, have scraped together haphazard online plans and video lessons which, research shows, have not been successful.
Pre-COVID-19 studies found that up to 800 million workers could be displaced by technology in the next 10 years, many of whom will have to be retrained. The recent jump in unemployment will add to those numbers. Recently, protests in response to the killing of George Floyd by a white police officer have also led to a movement of Americans looking to learn about police brutality and systemic racism.
That’s a lot of people looking to learn.
“We are a content curator, and being a good curator means that you really deeply understand the community that you’re bringing Bendable to,” said Rick Wartzman, head of the Drucker Institute’s KH Moon Center for a Functioning Society. “So our secret sauce from the beginning has been to make this a community-based learning resource and marketplace.”
Bendable.com
Bendable has two tracks: One trains and retrains the local workforce in partnership with local businesses. It also helps residents obtain high school degrees online. The second is a set of community-based learning collections relevant to the everyday lives of residents—these range from social justice courses to information on how to purchase a home.
At the top of the site is a collection created by South Bend mental health counselor and community organizer Derrick Perry titled “Learning to have better conversations with the help of restorative justice.” The collection includes news articles, books, and videos. Further down on the site, the St. Joseph County Public Library has curated a list of books to read on racism in America, all of which are available online with a library card.
“This is front and center, and we want Bendable to be responsive,” said Wartzman. “Learning is an incredible resource, and we want to give people access to it.”
Bendable.com
The site includes a number of learning resources about the COVID-19 pandemic. There are collections on how to reopen businesses, how to manage stress during a pandemic, and a community collection by Heidi Beidinger-Burnett, president of the St. Joseph County Board of Health, on how to be better prepared for the next pandemic.
Wartzman said that Bendable worked closely with South Bend business, community, and government leaders, including former mayor and 2020 presidential candidate Pete Buttigieg, to launch the program which will eventually offer in-person programming as well. Buttigieg, said Wartzman, initially suggested tying the site to the local library and lent his name to help secure major funding for the program.
Bendable.com
While the pilot program involved years of work and millions of dollars, Wartzman said that future iterations should be more cost- and time-effective. “Now we have tools and processes and a digital platform that we can take to other cities,” he said. “But our plan is to make everything hyper-local at scale.”
It’s not just about getting people onto the platform. Building real relationships in the city are equally important to the success of Bendable. Business owners and leaders helped create collections to train the local workforce for job openings and acceleration specific to their communities.
For example, General Stamping & Metalworks in South Bend will offer a computer lab with Bendable programming for employees, and it’s working to create content to aid current employees in moving up.
In a moment where online education is widespread, multi-platform, and largely uncurated, there is a lot of room for organization and new market platforms. Bendable is attempting to create offerings that focus on community growth instead of profit.
“Look, we try to be genuinely humble and realistic,” said Wartzman. “Bendable isn’t going to solve poverty. It isn’t going to solve structural racism. It isn’t going to solve anything in one fell swoop, but it can be a part of a powerful set of solutions that communities need to try, and provide easy and almost radical access to resources.”


fortune--2020-06-11--Stocks fall sharply, posting worst day in 12 weeks

U.S. stocks tumbled the most in 12 weeks as the torrid surge in equities came to a screeching halt amid economic jitters. Treasuries surged.
The Dow Jones Industrial Average slumped as much as 7.1% on Thursday, with all of its 30 blue-chip companies dropping. Meanwhile, the S&P 500 sank almost 6% — approaching the 7% threshold that would trigger an exchange-mandated trading pause. Airlines, cruise operators and travel shares that soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights plunged 9%, and energy shares joined a rout in oil. Treasury 10-year yields fell to as low as 0.65%, while the dollar jumped.
While much of the equity selling owed to the frantic pace of the recent rally, sentiment did sour as signs mounted that a possible second wave of the pandemic could be taking hold in some states. U.S. jobless claims remained high, underscoring the longer-term challenges caused by the pandemic. The report came out a day after the Federal Reserve provided a dour economic outlook. Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another surge in coronavirus cases.
“The move from the bottom in terms of the rally has been so mind boggling. Over the new few weeks, we could see some pullback,” said Solita Marcelli, deputy Americas chief investment officer at UBS Global Wealth Management. “That’s mostly the fears of second wave concerns going higher, also we had the Fed yesterday. Their assessment of the economy was a little bit weaker than what the market expected.”
As restrictions are lifted across the country, signs of a second wave of cases have been raising alarms. More than 2 million people in the U.S. have been infected so far. The localized surges have raised concerns among experts even as the nation’s overall case count early this week rose just under 1%, the smallest increase since March.
“Sentiment has become much more cautious,” said Shawn Cruz, senior manager of trader strategy at TD Ameritrade. “We actually started to get data that indicated reopenings are going extremely well, and now we’re starting to get some of the headlines that maybe the reopenings are going to at least pause.”
These are some of the main moves in markets:
Stocks
The S&P 500 sank 5.9% as of 4 p.m. New York time.
The Stoxx Europe 600 Index slid 4.1%.
The MSCI Asia Pacific Index sank 2.3%.
Currencies
The Bloomberg Dollar Spot Index surged 1.2%.
The euro declined 0.7% to $1.13.
The Japanese yen appreciated 0.2% to 106.88 per dollar.
Bonds
The yield on 10-year Treasuries decreased six basis points to 0.67%.
Germany’s 10-year yield dipped eight basis points to -0.41%.
Britain’s 10-year yield sank seven basis points to 0.198%.
Commodities
The Bloomberg Commodity Index declined 1.4%.
West Texas Intermediate crude decreased 8.8% to $36.11 a barrel.
–With assistance from Adam Haigh, Yakob Peterseil and Todd White.


fortune--2020-06-11--Comcast and media mogul Byron Allen settle racial discrimination dispute

Comcast settled a long-running a long-running racial discrimination dispute with black media mogul Byron Allen, agreeing to add three of Allen’s channels to its cable packages.
Allen sued Comcast for $20 billion in 2015 for refusing to carry seven of his networks, saying it was because of his race. Comcast said it declined to carry the channels because the programming wasn’t original or of sufficient quality. Allen also sued Charter, another cable company, for $10 billion for refusing to carry his networks.
The case made it to the Supreme Court, which in March reversed a lower court ruling in favor of Allen. The Supreme Court said Allen had to show race was the decisive factor in Comcast’s decision not to offer him a contract, not one of several factors. Allen called that ruling “harmful to the civil rights of millions of Americans.”
Comcast and Allen’s company, Entertainment Studios Networks, said Wednesday that Comcast would include the channels Comedy.TV, Recipe.TV and JusticeCentral.TV in its cable packages. It also extended agreements on the Weather Channel and 14 broadcast stations that Entertainment Studios owns. Financial terms were not disclosed.
Many companies, while pledging solidarity with black employees and black people against injustice, are starting to confront the lack of diversity and allegations of racism in their own organizations.
Comcast, which owns NBCUniversal, this Monday pledged $100 million for social justice and said it would accelerate its diversity efforts. Comcast said it would “put the full weight of our company’s media resources behind highlighting Black voices and Black stories.”


fortune--2020-06-11--Joe Biden makes Facebook’s lax moderation policy a campaign issue

Democratic presidential candidate Joe Biden has added Facebook to his list of top campaign issues, calling for the company to start rigorously policing its service.
The former vice president published an open letter to Facebook CEO Mark Zuckerberg on Thursday demanding that he stop allowing misinformation and “rants of bad actors and conspiracy theorists.” Biden wants Facebook to quickly remove misinformation, promote news from credible sources, ban candidates and political groups from lying in ads, and block efforts to suppress voting—including attempts by President Trump.
“We’re less than 150 days to the election,” Biden said in the letter. “The time for setting, testing, and implementing meaningful policy to protect our elections is running out. Facebook—do the right thing.”
Biden also asked supporters to sign a petition to “ensure a fair election.” To get the word out, his campaign created the social media hashtag #MoveFastFixIt, a take on Facebook’s old motto “Move fast and break things,” and a pre-written message for supporters to share on social media.
The news comes as tensions rise between social media companies and government officials. Two weeks ago, President Trump, upset that Twitter had flagged one of his posts as misinformation, signed an executive order aiming to weaken or remove legal protection for social media companies. Meanwhile, Democrats continue to criticize social media companies for spreading misinformation, hate speech, and violence on its services.
Facebook has taken a hands-off approach to policing politicians’ speech, allowing inflammatory posts from Trump to remain on its service, which has upset many of its employees, and deciding against fact-checking political ads.
In response to Biden’s attack, Facebook said Democrats are demanding that it take action while Republicans are demanding that it do nothing. The company said it would follow whatever rules government established for campaign messages, echoing Zuckerberg’s argument that his company shouldn’t be the arbiter of truth and that regulators should set any guidelines.
“The people’s elected representatives should set the rules, and we will follow them,” Facebook said in a statement on Thursday. “There is an election coming in November and we will protect political speech, even when we strongly disagree with it.”


fortune--2020-06-11--The Wing staffers are doing a ‘digital walkout’ until their demands are met

Staffers for women’s coworking space The Wing submitted a list of demands to company leadership following the resignation of Audrey Gelman as CEO of the startup she cofounded.
“Audrey Gelman’s resignation is not enough,” Wing employees began tweeting Thursday morning. In an accompanying statement, employees said that they were participating in a “digital walkout” on Thursday and had shared demands with leadership to correct the “egregious fact” that “The Wing doesn’t practice the intersectional feminism it preaches.”
The walkout organizers told Fortune that employees would not be returning to work until their three primary demands were met. They did not share the demands with Fortune.
Ninety-three percent of The Wing’s employees, or 67 out of 72 workers, signed the petition, Wing employees said.
Gelman cofounded the women’s coworking space, known for its public embrace of feminism, with chief operating officer Lauren Kassan in 2016. However, former employees—especially women of color who worked in the company’s physical locations—spoke out about what they saw as a disconnect between the company’s branding and its treatment of female workers in New York Times and Wall Street Journal articles in March and April. Pieces of the criticism focused on Gelman’s leadership in particular, but employees are now saying that The Wing’s problems go deeper than her spot in the C-suite.
Employees organizing The Wing’s Thursday walkout said they were “frustrated and saddened by the incompetence and lack of accountability demonstrated time and time again by The Wing’s leadership,” according to a statement shared with Fortune.
“Leadership decisions have disproportionately failed and continue to fail people of color at The Wing,” the group added. “Public perception of The Wing is at an all-time low—and rightfully so.”
Gelman’s role as CEO will be taken over by a new “Office of the CEO” made up of Kassan, senior vice president of operations Ashley Peterson, and senior vice president of marketing Celestine Maddy.


fortune--2020-06-11--Microsoft follows IBM and Amazon in barring police from using its facial-recognition technology

Microsoft has joined Amazon and IBM in barring police from using its facial-recognition technology.
Microsoft president Brad Smith said Thursday during a Washington Post online event that the technology giant “will not sell facial-recognition technology to police departments in the United States until we have a national law in place, grounded in human rights, that will govern this technology.”
His remarks come a day after Amazon said it wouldn’t let law enforcement use its facial-recognition technology for a year, and after IBM said earlier this week that it would stop selling the technology for the foreseeable future.
The decisions come amid protests over racial injustice and police bias following the death of black Minneapolis resident George Floyd after being being pinned down by a white police officer. A.I. researchers and activists have been critical of facial-recognition technology because of its potential to be misused by police departments, some of which have a history of racial discrimination, and its higher inaccuracy when used on women and people of color.
In response to A.I. researchers highlighting those flaws, Microsoft has been trying to improve its technology. But despite the efforts, the facial-recognition technology continues to perform better on white males.
Smith said that Microsoft has “focused on this issue for two years” and, currently, doesn’t sell facial-recognition services to U.S. police departments. But, he said, recent events call “on us to listen more, to learn more, and most importantly to do more.
“The No. 1 point that I would really underscore is this: We need to use this moment to pursue a strong national law to govern facial recognition that is grounded in the protection of human rights,” Smith said.
He added: “I think it’s important to see what IBM has done. I think it is important to recognize what Amazon has done. It is obviously similar to what we are doing. But if all of the responsible companies in the country cede this market to those who are not prepared to take a stance, we won’t necessarily serve the national interests or the lives of the black and African-American people of this nation well.”
Matt Cagle, an American Civil Liberties Union technology and civil liberties attorney, said in a statement about Microsoft’s announcement that “Congress and legislatures nationwide must swiftly stop law enforcement use of face recognition, and companies like Microsoft should work with the civil rights community—not against it—to make that happen.”
Cagle also said Microsoft should halt “its current efforts to advance legislation that would legitimize and expand the police use of facial recognition in multiple states nationwide.” The ACLU has been critical of Microsoft’s support of a proposed facial-recognition bill in California that the group believes will expand unethical surveillance by both police departments and companies.
“We welcome these companies finally taking action—as little and as late as it may be,” Cagle said. “We also urge these companies to work to forever shut the door on America’s sordid chapter of over-policing of black and brown communities, including the surveillance technologies that disproportionately harm them.”


fortune--2020-06-11--A second coronavirus wave isn’t imminent—the first one never ended

Dear readers—happy Thursday.
I saw a number of articles over the past few days suggesting that there’s a “second wave” in coronavirus cases in certain states like Florida and Texas. But the clear spike in at least nine states isn’t a second wave at all—it’s a continuation of the first one which still hasn’t been quelled.
The terminology of a “second wave” only makes sense if the first has subsided. That’s just the nature of waves. What’s going on right now is more akin to ebbs, flows, and ripples being driven by highly inconsistent reopening strategies.
Take a look at one map from my Fortune colleagues Erika Fry and Nicolas Rapp (keep in mind this is based on one set of consistent methodology and that the numbers may be different depending on exactly which dataset you’re using):
The number of COVID-19 cases and deaths in places like New York, the epicenter of the pandemic, have declined sharply in recent weeks. But public health experts have largely attributed that to an aggressive strategy promoting mask use, social distancing, and restrictions on mass gatherings.
Those policies have not been consistently enforced in certain regions, including several of the states where a reopening process began sooner than in others. Governors of some of these states cite increased coronavirus testing as the reason for the spikes, but that doesn’t fully explain the discrepancies with other states.
There’s still a lot to learn about this virus. It’s possible that open air gatherings, with proper precautions, are less worrisome than being in enclosed spaces with intimate crowds.
But don’t call it a second wave. We’re still in the throes of the first one—more than two million Americans have confirmed COVID-19 cases and more than 113,000 have died to date, per Johns Hopkins. A second wave would happen in the late fall if the current crisis has already abated (a big “if”).
And by the way, readers—please be sure to check out my writeup of our fascinating Brainstorm Health walkup call on the effects of coronavirus on the health care industry ahead of our virtual conference next month. More on that below.
Read on for the day’s news, and see you again next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
The ripple effects of coronavirus on the health industry—including telemedicine. Fortune held a community conversation with prominent health care leaders from across the country in a lead up to our first virtual Brainstorm Health conference in July. Attendees for the wide-ranging discussion included NewYork-Presbyterian hospital president and CEO Steven Corwin, Vivian Lee of Verily Life Sciences, and Komodo Health's Arif Nathoo. One of the main takeaways, among many fascinating observations about how coronavirus will transform the American medical industry, is that telemedicine is now being ingrained into the sector and embraced by patients and doctors alike. (Fortune)
Coronavirus tracing apps get a mixed reaction. "Contact tracing"—the process of following whom a potentially infected coronavirus patient may have interacted with—is a critical part of keeping the outbreak in control. Digital health has a role to play in this since it can, through certain decentralized apps, help people keep tabs on if they've been near those diagnosed with an infection. But there's been a mixed reaction to contact tracing apps developed by companies like Apple and Google over privacy concerns given a lack of national standards. On the flip side, Italy—one of the hardest-hit countries in the pandemic—seems to be warming up to the idea of its own contact tracing programs. (Wall Street Journal)
INDICATIONS
Big Pharma and biotech alike advance their COVID-19 therapies. In the past few weeks (and days), Johnson & Johnson, Moderna, Regeneron, Eli Lilly, AstraZeneca, Amgen, AbbVie, Vir Biotechnology, and GlaxoSmithKline have all announced new advances into COVID-19 therapeutics and vaccines. That's a pretty whopping roster of companies rushing into this space with a whole lot of different methodologies that include using antibody therapies to treat COVID-19 to vaccines which leverage messenger RNA. Some of the most prominent storylines include Johnson & Johnson's Wednesday announcement that it's accelerating its vaccine candidate into early-stage human clinical trials; Moderna's plans to launch a phase 3 clinical trial for its own vaccine, in July, with a dose set at 100 micrograms (for more on that, head over here); GlaxoSmithKline, per a company spokesperson, is advancing a treatment called otilimab to see whether it can block an overreaction of the body's immune system to a COVID-19 case; Regeneron announced Thursday morning that its own combination of two antibody drugs is now in human trials.
THE BIG PICTURE
IMF: The world will need to spend much more to address the pandemic. The International Monetary Fund (IMF) says that countries around the world have already spent $10 trillion combating the coronavirus pandemic and its downstream economic effects—but that isn't nearly enough, per the organization. The group's managing director Kristalina Georgieva says that significant investments will need to be made in order to assist an estimated 100 million people who might be pushed into "extreme poverty" as a result of COVID. (Reuters)
America's Surgeon General: 'George Floyd could have been me.' Surgeon General Jerome Adams, one of the nation's top public health authorities and a black man, tells Politico that the police killing of George Floyd hits home. "I really do think that could have been me," he said. "That could be me who is just seen as a black man and not as the surgeon general of the United States—especially if I'm not wearing a uniform, but I'm casually dressed in my hoodie and tennis shoes and athletic apparel—and that could be me on the side of a road with a knee in my neck." (Politico)
REQUIRED READING
How racism, COVID-19, and air pollution reveal striking patterns of inequality, by Katherine Dunn & Eamon Barrett
More than 44.2 million Americans have filed for unemployment amid the pandemic, by Lance Lambert
How one company manages supply chains for every 'essential' industry, by Emma Hinchliffe
Sign up for other Fortune newsletters.


fortune--2020-06-11--‘Personnel overhang’: All the job cuts each airline has announced so far

Germany’s Lufthansa Group—which also owns major airlines in Austria, Switzerland, and Belgium—has just announced up to 22,000 job cuts.
By Fortune’s calculation, the news takes the total number of announced major-airline job cuts up to around 70,000—and more will surely come. Taking into account looming cuts at suppliers such as Boeing, the coronavirus pandemic now seems set to claim many more than 100,000 jobs in the sector. One caveat: For the U.S. carriers on this list, the cuts cannot take place before the end of September, due to the terms of the airlines’ federal coronavirus payroll support deals.
Lufthansa’s move comes weeks after the group agreed to a $9.8 billion bailout with the German government that will see the government take a 20% stake in the company—shareholders and the European Commission still need to sign off on this. The Austrian government has also given the carrier group $510 million, and the Swiss government has given it $1.35 billion in loan guarantees.
Lufthansa CEO Carsten Spohr said last week that “far-reaching restructuring measures” and asset sales would be needed to repay the German bailout.
And the first wave is here.
“Without a significant reduction in personnel costs during the crisis, we will miss the opportunity of a better restart from the crisis and risk that the Lufthansa Group will emerge considerably weakened after it,” said Lufthansa human resources chief Michael Niggemann in a statement. “In addition, personnel overhang is likely to become even larger, so that a reduction of personnel overhang by implementing unilateral measures would be inevitable. We want to avoid this scenario.”
It is two months since Lufthansa said it would be cutting the size of its 763-strong fleet by around a tenth—it now expects the fleet to come out of the crisis having shrunk by around 100 planes. Even before the pandemic, the legacy carrier group was looking to consolidate its operations to stay competitive; COVID-19’s extreme impact on the sector just “accelerated” those plans, the company claimed in April.
Lufthansa Group employs over 135,000 people, half in Germany—where half the cuts will take place, many in administration and the group’s third-party services business.
Lufthansa’s looming headcount reduction (which is still the subject of negotiations with unions) is the largest announced so far in the current aviation crisis. But many carriers are being forced, or taking the opportunity, to downsize—and pretty much everyone expects the sector to take several years to recover.
Here’s a quick rundown of the most significant announcements of cuts made by carriers in the past couple of months. Not included are cuts at their suppliers, such as Boeing (nearly 13,000 jobs), Airbus (reportedly up to 10,000) and engine-maker Rolls-Royce (9,000), not to mention a host of smaller firms. In the U.K. alone, researchers are forecasting the loss of 124,000 jobs in the sector unless the British government extends additional help to aviation industry workers.
British Airways
BA said at the end of April that it would cut up to 12,000 jobs—as the IAG subsidiary employs around 42,000 people, that’s a higher proportion than Lufthansa is planning to shed, albeit a smaller overall number.
Emirates Group
The Emirates Group might end up with the heftiest cuts of all, as Bloomberg has reported a likely reduction in the order of 30,000. However, the Dubai flag carrier, which employs around 105,000 people around the world, has been vague about totals. So far, Emirates has reportedly laid off more than 7,200 cabin crew, pilots, and engineers.
American Airlines
American, which has almost 129,000 employees, said late May that it would be cutting roughly 30% of its management and support services. That means roughly 5,000 jobs will go, though the cuts cannot take place before the end of September because of the airlines’ federal bailout stipulations.
SAS
Scandinavian Airlines, the joint flag carrier for Denmark, Norway, and Sweden, said late April that it could cut up to 5,000 jobs, or almost half its workforce.
Norwegian Air
SAS rival Norwegian saw four of its Swedish and Danish subsidiaries file for bankruptcy in late April. It also ended a range of staffing contracts in the U.S. and Europe. Altogether, 4,700 jobs are at risk.
EasyJet
The British low-cost airline EasyJet is cutting around 4,500 jobs, or 30% of its workforce—and it’s warning of even more if the British government maintains two-week-quarantine requirement for people arriving in the U.K.
United Airlines
A report in early May, based on an internal memo, suggested United was planning to lay off 30% of its managerial and administrative workforce—that would mean around 3,500 lost jobs. However, new CEO Scott Kirby subsequently said he wants to avoid the measure if possible.
Virgin Atlantic
Virgin Atlantic said in early May that 3,150 jobs would be cut, so the airline could “return to profitability in 2021.”
Ryanair
EasyJet competitor Ryanair (also a vocal opponent of the U.K.’s quarantine requirements) said at the start of May that it would shed around 3,000 jobs, or 15% of its workforce.
Alaska Airlines
Alaska Airlines, which employs around 23,000 people, said Wednesday that it will shed up to 3,000 jobs.
Virgin Australia
Virgin Australia filed for bankruptcy protection in late April. Having met with bidders, unions now fear as many as 2,000 jobs could be cut.


fortune--2020-06-11--Country group Lady Antebellum changes name due to slavery connotations

Lady Antebellum, the seven-time Grammy award–winning country band, is no more—at least by that name. Now, they will go by Lady A.
The group known for the single “Need You Now” announced the change on Thursday, citing “the associations that weigh down this word [antebellum] referring to the period of history before the Civil War, which includes slavery.” The move comes as the nation continues to experience widespread protests over police brutality against black Americans, following the police killing of George Floyd.
Lady A, formed in Nashville in 2006, said the group made the decision “after much personal reflection, band discussion, prayer, and many honest conversations with some of our closest black friends and colleagues.” The band said the initial name chosen 14 years ago was named after a Southern “antebellum”-style home where the group took its first photos.
“We are deeply sorry for the hurt this has caused and for anyone who has felt unsafe, unseen, or undervalued,” the band said, adding that “we can make no excuse for our lateness to this realization. What we can do is acknowledge it, turn from it, and take action.”
The band says it now feels “awakened” and pledged to make a donation to the Equal Justice Initiative.
“We will continue to educate ourselves, have hard conversations, and search the parts of our hearts that need pruning,” the band wrote in an Instagram post. “To grow into better humans, better neighbors.”


fortune--2020-06-11--Snap wants machine learning experts to make more animated messages

Snap is calling on outside artificial intelligence experts to create silly effects for its popular Snapchat messaging service.
The company debuted a new service on Thursday that data scientists can use to import machine learning models into Snapchat to create more compelling Lenses, or special effects that tap augmented reality technology. That technology superimposes digital animations on videos, such as windshield wipers on an individual’s glasses, among other feats.
Eitan Pilipski, senior vice president of Snap’s camera platform, said the new service, Snap ML, is intended to build a bridge between machine learning engineers, a typically serious bunch, and Snap’s outside community of creative animators and content creators.
The idea is that A.I. engineers will train deep learning models to do things like recognize hand gestures, Pilipski explained. They can then import those hand-gesture models and create features using augmented reality.
During a videoconference call, for example, Pilipski used his fingers to make a peace sign, which caused him to digitally sprout long hair, glasses, and a tie-dye headband, as if he were in a Cheech & Chong movie.
But Pilipski, who previously spent 16 years as a technology executive at Qualcomm, also pitched Snap ML as more than fun. He described it as tool for companies to advertise their services to Snapchat users.
Wannaby, a startup that makes augmented reality apps for fashion companies like Gucci, has used Snap ML to create a Lens that superimposes digital shoes on people’s feet when they point their smartphone’s camera at them. Wannaby’s Lens can seemingly change the materials or colors of the shoes, so shoppers can see what they look like.
For Wannaby CEO Sergey Arkhangelskiy, having access to Snapchat’s big user base is more important than Snap’s underlying technology. Snap said it had 229 million daily active users in the first quarter of 2020. Arkhangelskiy said his company’s own augmented reality app is still “better” than Snapchat’s because he has more control over the underlying technology, letting him create more powerful features.
Pilipski conceded that Snap has put limits on the size of Lenses outsiders can create, but that’s because the technology must work for millions of users who have different kinds of smartphones.
Still, Arkhangelskiy said Snap’s new ML service and Lens tools enable him to make more compelling augmented reality features for his customers than Snap rival Instagram. Instagram’s technology is “mostly about faces,” said Arkhangelskiy, and the tools the company offers are generally designed for creating filters on people’s visages, rather than Snap’s software, which can accommodate a variety of body parts.
Instagram, which is owned by Facebook, has also been courting businesses and has debuted features to help companies sell their products. Google and Apple have created similar technology that others can use to build augmented reality apps.


fortune--2020-06-11--How the pandemic has transformed the telehealth industry forever

A wide-ranging group of health care experts on Wednesday joined a kickoff call for Fortune‘s Brainstorm Health conference in the lead up to our virtual event which will be held on July 7 and 8.
The conversation featured thoughts from prominent leaders including New York Presbyterian president and CEO Dr. Steven Corwin, Verily Life Sciences president of health platforms Dr. Vivian Lee, Komodo Health CEO and co-founder Dr. Arif Nathoo, and others on the ripple effects of the coronavirus pandemic across the American health care system.
One are of clear consensus among the participants? Telehealth use has skyrocketed during the outbreak—and the trend is probably here to stay.
A pandemic of this scope naturally strains hospital capacity, and people with chronic conditions such as heart problems and diabetes likely don’t want to go into a hospital setting where they put themselves at risk. That’s where telemedicine, virtual doctor visits, and other digital health technologies play a critical role, says Lee.
“It’s great that you can see doctor virtually,” she says—but even more importantly, advances such as digital diabetes care platforms “have enabled people to care for themselves in even better ways.”
Those sorts of platforms were initially slow to take off in large part because they weren’t reimbursed to the extent they should have been, according to Lee. Now, however, large health programs such as Medicare have begun to cover technologies such as continuous glucose monitors and digital diabetes coaching which can inform patients in real time about which behaviors affect their blood sugar levels.
Demand for telehealth has surged in some of the nation’s most prominent health systems. For instance, before the pandemic began, New York Presbyterian’s Corwin says that about 4% of outpatient visits were telehealth visits. “During the crisis, it’s 85%, and 95% of our outpatient psychiatry visits are now telemedicine,” he notes. “Physicians have now basically crossed the rubicon.”
That new digital paradigm extends to COVID-19 as well. For instance, says Corwin, patients who have COVID-19 but aren’t sick enough to require hospitalization are now being monitored remotely in their own homes.
Long-term changes wrought by the pandemic will only keep the trend going. “You can’t have 30 people in a waiting room or 15 people in an elevator anymore. This has all changed dramatically and there’s no going back on that.”
But despite the opportunity, challenges remain. For instance, should rural communities which already have a shortage of hospitals turn to telemedicine, the broadband infrastructure to support virtual visits must be built.
Ultimately, however, Corwin and multiple other participants believe “the horse is out of the barn” on digital health.


fortune--2020-06-11--Turning ‘ESG’ into ‘ESGD’: How investors can support diversity with their dollars

As environmental consciousness has risen, as social movements like #MeToo have found a greater audience, and as corporate boards are being held more accountable for how businesses are run, investment leaders are increasingly using their position of influence to allocate capital at scale for a higher purpose. This effort is often formalized as “ESG investing”—a strategy that involves weighing the environmental, social, and good governance impacts of investments when making key business decisions.
Many investors already think about a whole range of ESG issues when they’re considering how to deploy their funds—from how corporations respond to climate change, to how they manage energy and natural resources, to how they approach health and safety policies or worker protections.
In the aftermath of George Floyd’s death, as widespread protests have swept across the country and a vital and urgent conversation about systemic racism has broken through the national consciousness, it has become obvious that our society has much more progress still to make. Prioritizing environmental, social, and governance considerations in investing is not enough. If we truly want to change the systems that drive systemic inequities in our country, we need to proactively add considerations of race and diversity to all areas of our lives, including in the way we invest.
That will require adding a “D” to ESG—prioritizing diversity and justice in order to foster and protect a more inclusive society.
The need for this kind of action is clear. Five decades after landmark legislation like the Civil Rights Act and the Fair Housing Act, Black Americans face a wealth gap that is even larger in percentage terms than it was in 1968. While the median weekly pay for white men is $1,096, Black men earn a full 25% less. Job applicants with “Black-sounding” names are less likely to be called for a job interview than applicants with “white-sounding” names, and Black Americans who are hired are more likely than white Americans to face discrimination in the workplace.
Statistics in education, health care, and criminal justice all tell the same story: The Black experience in America remains fundamentally separate and profoundly unequal.
Our approach to the “D” in ESGD doesn’t have to be one-size-fits-all. Nor does it imply that “D” stands alone and separate from the “E,” “S,” or “G.” Having top-line billing for diversity is important so that diversity doesn’t just get measured by numbers in the workforce, but rather is integrated specifically as a lens to look at the “E” (think of the water crisis in Flint, Mich.), or the “S” (zeroing in on the social impacts of businesses on black communities), and the “G” (promoting people of color for corporate boards). Some investors might consider prioritizing investments in Black-owned businesses. Others might invest in companies that serve primarily Black communities. Still others might focus on companies that commit to anti-racism policies—from racial equity training, to pay equity, to lobbying for criminal justice reform, to ensuring Black Americans have a voice in democracy by making Election Day a paid company holiday.
A specific focus on diversity could also help to increase the number of women, LGBTQ Americans, and people of color within the corporate world—groups that are still too often left out at the leadership level. Investing with an eye toward diversity, and encouraging companies to engage more purposefully with underrepresented populations in general, could persuade them to take action, whether by adjusting the way they recruit new employees, or prioritizing mentorship opportunities, or simply conducting internal conversations about how to better support and celebrate diversity within the organization. Elevating diversity will increase the accountability that has been missing from investors’ calculations to affect diversity and justice.
ESGD investing, like ESG investing today, also doesn’t mean sacrificing financial gains to serve moral purposes. A more equitable society naturally means a better flow of capital, and more opportunity means greater innovation. McKinsey among many others have reported that diverse organizations perform better. Dismantling systemic racism and generating opportunities for underrepresented populations would promote health, education, and economic success across the country, creating benefits for communities nationwide.
Using investment resources to reduce barriers for underrepresented people isn’t only the right thing to do, it also makes good business sense, creates more sustainable markets, and leads to better outcomes for society as a whole.
The bottom line is that it’s not enough to assume that race and diversity are included in larger social considerations, or to voice support for Black and other underrepresented communities as part of a greater social effort. We need to make diversity and equal justice an active part of our conversation and a core component of the way we do good in the United States and around the world.
That means making ESGD investing a national norm.
Alan H.H. Fleischmann is the founder, chairman, and CEO of Laurel Strategies, Inc.


fortune--2020-06-11--A black partner’s perspective on why law firms are failing at diversity

I knew that I was going to be pulled over and that part of the encounter was entirely appropriate. I was speeding early one morning on a two-lane highway near my home when a highway patrolman passed me in a curve traveling in the opposite direction. He quickly disappeared over a hill and had not activated his blue lights. Just the same, I steered my late model luxury car onto the side of the highway, put it in park, retrieved my driver’s license and registration, and waited. Soon, the white law enforcement officer reappeared and pulled his cruiser in behind my car. I had already lowered my driver’s window as he approached.
He dispensed with the pleasantries: “Whose car is this?” I’m sure that I sighed and shook my head ever so slightly. I then said, “It’s mine.” I stretched out my arm and said, “And here are my license and registration.”
He left me hanging. He asked, “What’s the make and model?” A lump formed in my throat, and I hesitated momentarily while trying to process what was happening. Then, even though I didn’t want to, I described my car to him. Since my arm was still resting on the windowsill, I again said, “Here are my license and registration.” This time he took them and returned to his cruiser. He issued a ticket and told me to have a good day.
At the time of that stop, I was on my way to a case management conference in federal court. I was wearing a starched white shirt, dark suit pants, and a silk tie. My suit coat was in plain view in the back seat of the car. So too was a case file. And sitting atop the file was a copy of the federal rules of civil procedure. When I responded to the patrolman’s questions, I did so through very recent and relatively expensive dental work.
Upon arriving at the conference, I told counsel opposite, who is white, about the stop. He was incredulous. He told me that he was certain that if he had been stopped and was wearing jeans and a T-shirt, he would not have been asked those questions. So I was not delusional, and my feelings weren’t misplaced. Despite the indicators that I was employed as a lawyer (or perhaps a judge), the patrolman, who was also employed in the legal system and had surely interacted with lawyers, only saw a person of color. For him, that fact was enough to ignore objective indicia related to my profession and, instead, caused him to default to a negative assessment.
I won’t recount all the thoughts and emotions I have had about that incident. But it was clearer to me than ever before that what might be acceptable for white lawyers to do, or not do, and still be accorded due recognition and respect as a professional does not apply to me. Women and nonwhite lawyers face the constant specter of being minimized. I believe that for the diverse lawyer, this situation requires strict adherence to professionalism in every meaning of the word. While it may not seem like much, I resist casual Friday. And for law firms, every effort must be made to promote a welcoming environment of opportunity and inclusivity.
This year marks my 30th year in the practice of law. My experience includes a judicial clerkship, service as a Marine Corps Judge Advocate, criminal cases as a prosecutor and defense attorney, civil law practice representing defendants and plaintiffs, working for a small black-owned firm, being a partner in a small plaintiffs practice, and, for most of my career, being a partner in a top 150 law firm.
It was 25 years ago that another black lawyer and I became the first black lawyers at my firm, which was, at the time, solely based in Mississippi. We were part of the first real push for diversity in large majority practices. Soon I was the only black lawyer at the firm. I, too, left but ultimately returned and have been back for more than a decade. The firm now has offices nationwide and internationally. Our number of black lawyers is 7% today. I am optimistic regarding our progress and am determined that we do much better in the future.
But this problem is even worse nationally. According to the most recent data from the Vault/Minority Corporate Counsel Association Law Firm Diversity Survey, just 2% of law firm partners are black. These numbers have been largely consistent over the last decade.
My practice is complex litigation, which is national in scope. This affords me the opportunity to work closely with lawyers of every conceivable background from large majority law firms. Moreover, here at Butler Snow, I have been elected to firm management, held administrative positions, and been involved in the hiring process. These experiences have left me with certain impressions regarding the development of diversity and inclusion initiatives and, in particular, the retention and advancement of black lawyers.
The comments below address three issues from among the many that I believe contribute to a law firm environment where diverse lawyers are minimized and their ultimate departure is inevitable.
First, diverse lawyers do not enjoy a presumption of competence like others do. Despite thoughtful diversity initiatives and aggressive recruitment efforts, many lawyers of color find themselves in an environment that does not see them in the same way as it does other lawyers. This is known as confirmation bias, a mental shortcut that makes one actively seek information, interpretation, and memory only to acknowledge that which affirms established beliefs, while missing data that contradicts established beliefs.
The potential effects of confirmation bias are obvious. Assignments find their way to other lawyers, and fewer meaningful opportunities find their way to the lawyer of color. Even worse, confirmation bias leads to a suggestion of incompetence for lawyers of color and a presumption of competence for others. Eventually, the handwriting is on the wall, and a departure may be the most reasonable response by the lawyer of color.
Second, the notion exists at many firms that any woman or nonwhite lawyer will do. Women and nonwhite lawyers are dismayed at having their pictures emblazoned on glossy responses to RFPs or being asked to dutifully participate in pitch meetings, only to be omitted later from any meaningful participation on the file. The only sin worse than not being considered is not being utilized.
This misguided approach to diversity can have effects beyond the law firm environment and the issue of retention. Unbelievably, there is a practice of adding a diverse lawyer to a trial team solely for optics. This transparent act will not go unnoticed by judges nor jurors, and it is clients who may suffer the consequences.
Third, lawyers who are women or people of color are routinely introduced or approached last. I recall being at a professional meeting and standing with a group of six or seven colleagues from various firms. I was the only lawyer of color in the group and clearly the oldest. Another lawyer who knew some, but not all, of the others walked up and engaged in small talk. Introductions were made, and hands were shaken. When he finally got to me, he asked, “What do you do? Are you on the discovery team?” I replied, “No. I’m national lead trial counsel.” He said, “Oh, you’re Rod Richmond. Pleased to meet you. I’ve been reading your work.” Even though he was familiar with my name and my role, upon seeing me, he had assigned a different responsibility to me in his mind.
On numerous occasions and in different settings over my career, someone initiates a conversation with a white male who is with me, only to be told that I am the person they should talk to or who knows the subject matter. I have seen it happen with others as well. This is another weighty straw that can push a diverse lawyer in the direction of other employment.
The issues I’ve raised here are serious and systemic. But all is not lost. In a column tomorrow, I will look at some ways that large law firms can not only build a diverse work force, but retain it.
Orlando R. Richmond Sr. is a partner at Butler Snow LLP.


fortune--2020-06-11--Walmart will stop locking up beauty products for black consumers

Walmart will stop locking up black beauty and hair care products in glass anti-theft cases in the wake of criticism that the practice was discriminatory.
Retailers, notably mass-merchandise stores and drugstores, often lock up items they deem at high risk of shoplifting such as razor blades and cosmetics, requiring customers to have a store employee unlock the cases.
Walmart drew ire from some customers following a television report about a store in Denver that had similar products for nonblack hair openly on its shelves. So the company, which has pledged to be a leader in fighting racism in the wake of recent nationwide protests against police brutality, said it is ending the practice.
“We serve millions of customers every day from diverse backgrounds. We have made the decision to discontinue placing multicultural hair care and beauty products in locked cases,” the company tweeted on Wednesday.
We serve millions of customers every day from diverse backgrounds. We have made the decision to discontinue placing multicultural hair care and beauty products in locked cases. This practice was recently in place in about a dozen of our 4,700 stores nationwide. — Walmart (@Walmart) June 10, 2020
The end of the practice comes at a time when Walmart, the largest private U.S. employer, is trying to take the lead in how corporate America addresses inequity and racial discrimination in the workplace, from recruitment and career advancement to training and board representation, among other critical issues. Last week, Walmart CEO Doug McMillon said the company and the Walmart Foundation will commit $100 million over five years to create a new center on racial equity.
That center “will seek to advance economic opportunity and healthier living, including issues surrounding the social determinants of health, strengthening workforce development and related educational systems, and support criminal justice reform with an emphasis on examining barriers to opportunity faced by those exiting the system.”
While many retailers have pledged monetary contributions to fight racism and injustice, they have also been criticized for discriminatory practices over the years or falling short in efforts to fight inequality. Macy’s, which a few years ago was sued for alleged racial profiling of shoppers in its anti-shoplifting procedures but is also a longtime proponent of diversity, could and will do more, the department store’s CEO Jeff Gennette said earlier this week. And as Bloomberg reported last week, Target, also an active proponent of diversity, has very few black executives in its leadership ranks.


fortune--2020-06-11--What’s going on at The Wing: Audrey Gelman steps down as CEO

After a rocky several months that included a business model decimated by the coronavirus pandemic, mass layoffs, and employees speaking up about a disconnect between the company’s feminist branding and treatment of female staff, Audrey Gelman is stepping down as CEO of The Wing, the women’s coworking business she cofounded in 2016. The Wing confirmed her departure from the role to Fortune.
Gelman, a former staffer in New York politics, was a high-profile chief executive who frequently represented her company in the media, while cofounder and chief operating officer Lauren Kassan more often worked behind the scenes. Kassan will step into a newly created “Office of the CEO” along with senior vice president of operations Ashley Peterson and senior vice president of marketing Celestine Maddy, reporting to the company’s board of directors, The Wing confirmed.
“The Wing remains a vital resource for thousands of women navigating their path to success,” the company said in a statement to Fortune. “But the moment calls for a rethinking of how we meet their needs moving forward and for new leadership that can guide The Wing into the future.”
“My hope is that this accelerated transition will help rebuild trust, restore faith, and remake The Wing into something we can all feel proud of,” Gelman reportedly wrote in an email to The Wing’s staff Thursday morning.
Staffers began tweeting on Thursday morning the phrase “Audrey Gelman’s resignation is not enough” and said they had presented a list of demands to company leadership intended to correct the fact that “The Wing doesn’t practice the intersectional feminism that it preaches.”
The Wing launched in 2016 as a physical space that would serve as a pit stop for women between “work and werk,” but transitioned to serve primarily as a community-based membership platform that members could use as a physical workspace. While the startup initially limited membership—and guests—to women, after encountering legal hurdles, it redefined its membership criteria as open to anyone advocating its mission to support women.
The coronavirus pandemic, however, upended The Wing’s business. As its dozen physical spaces closed (the startup has opened branches in six U.S. cities and London and, before the pandemic, had plans to open nine more in 2020), The Wing saw “95% of our revenue disappear overnight,” Gelman said in April. The company began offering its programming—member meet-ups and talks by prominent women—online. However, it couldn’t transition the part of its membership that justified $2,700 annual membership fees—its physical spaces—to remote work.
The company laid off half its headquarters staff and almost all teams that had worked at its physical spaces in early April.
The Wing’s mission and branding both center on the ideals and language of feminism, from Gelman’s appearance while pregnant on the cover of the magazine Inc., a milestone for the business press, to the investors it courted: soccer players from the U.S. Women’s National Team and Hollywood figures like Kerry Washington involved in the anti–sexual harassment organization Time’s Up. But in March, the New York Times published an investigation into The Wing’s culture, in which employees said that leadership didn’t live up to those feminist ideals when it came to their own female workers. Several of the criticisms focused on Gelman specifically. That piece was followed by a Wall Street Journal investigation featuring similar claims in April. Criticism in both pieces highlighted that especially women of color who worked for The Wing were mistreated.
Journalist Kara Swisher reported that Gelman would retain her seat on The Wing’s board of directors, which the company has not yet confirmed. Members of The Wing’s board include GV general partner Jessica Verrilli, who replaced WeWork chief legal officer Jennifer Berrent after WeWork exited its stake in The Wing amid the collapse of its own coworking business and a pregnancy discrimination lawsuit against WeWork, and Sequoia Capital partner Jess Lee.


fortune--2020-06-11--Buzzy research lab OpenAI debuts first product as it tries to live up to the hype

Artificial intelligence research lab OpenAI is taking its first step into the corporate world.
The buzzy organization, which has both a nonprofit and for-profit arm, on Thursday debuted its first commercial product: technology that helps developers create apps that understand human language.
OpenAI was founded in 2015 with investments from tech luminaries including Tesla CEO Elon Musk and LinkedIn cofounder Reid Hoffman. It originally focused on developing cutting-edge A.I. technologies “to benefit humanity as a whole, unconstrained by a need to generate financial return,” but more recently it has said it would create software to sell.
Last year, OpenAI formed a for-profit arm intended to help it raise more money, which the firm’s CEO Sam Altman, a former president of startup incubator Y Combinator, said was needed in order to pay the enormous computing bills required for big A.I. projects. Around the same time, Microsoft invested $1 billion in the organization and became its “preferred partner for commercializing new A.I. technologies.”
For now, Microsoft is not helping OpenAI sell or market the new tool, which is being tested by a legal technology company Casetext, Reddit, Middlebury College, and video-game maker Latitude, which makes the niche game AI Dungeon. But Altman said he hopes that will change and that Microsoft, with its big sales staff, will eventually partner with OpenAI on the new product.
OpenAI’s new service is based on its previous research into deep learning and natural language processing, a subset of A.I. that enables computers to respond to human language.
One such tool the organization has developed, GPT-3, can answer trivia questions and perform basic arithmetic based on queries typed by humans. The GPT-3 language model has 175 billion parameters, making it 18 times as large as the Blender chatbot from Facebook that also mimics human dialogue.
Greg Brockman, an OpenAI cofounder and chief technology officer, said that OpenAI’s GPT-3 language model is one of the core technologies powering the new commercial product. But while developers using GPT-3 must have proficiency using complex A.I. tools, those using the new product need “no machine learning expertise,” Brockman said.
Similar to other natural language processing services sold by companies like Amazon and Google, OpenAI’s service is available through an application programming interface, or API. In response to fears about the use of A.I. for nefarious purposes, Brockman said OpenAI will not sell its service to organizations to use in ways that violate OpenAI’s ethics code, which prohibits generating spam messages and harassment.
OpenAI faces many challenges in commercializing its language technology. Tech giants like Google, IBM, and Microsoft already sell language processing services to developers. Additionally, many smaller companies already sell language services that are tailored to individual industries like finance and health care, which have their own lingo, explained Forrester analyst Boris Evelson.
While A.I. researchers may be aware of OpenAI or the complex language models being developed by companies like Facebook, he said that universe is still very small. For OpenAI to stand out, its technology must be superior to what’s offered by rivals and be easy enough for non-tech-whizzes to use.
By selling enterprise products, OpenAI also risks damaging its reputation among A.I. researchers, who could frown upon the idea of “selling out” to commercial interests. OpenAI has already come under fire from A.I. critics who accuse the firm of overhyping its technology.
But Altman said that OpenAI is still pursuing its original goal of creating A.I. that benefits humanity, and that selling commercial software will be a way the organization can better understand the usefulness of its technology. Merely beating academic benchmarks or tests to prove the capabilities of its technology “was never what we cared about,” Altman said.
He mentioned a Walt Disney quote, “We don’t make movies to make money, we make money to make more movies,” as a sort of OpenAI axiom.
“I don’t think we could succeed in our mission without doing things like this along the way,” Altman said.


fortune--2020-06-11--Amazon’s crackdown on price-gouging of cleaning supplies made shortages worse

When Americans couldn’t find hand sanitizer, toilet paper and disinfecting wipes on Amazon.com Inc., many assumed the products had run out thanks to surging demand from home-bound shoppers. In fact, in some cases the products were available, but merchants had pulled them to avoid getting caught up in Amazon’s price-gouging crackdown—even though they weren’t raising prices.
Amazon began issuing vague warnings about price policy violations in March that extended through April, threatening to kick merchants off the site. The automated warnings followed glaring headlines about greedy opportunists, like the merchant trying to sell a two-pack of Purell hand sanitizer for $400. But Amazon’s warnings didn’t specify prices the company deemed fair. That left merchants playing a guessing game as they tried to determine if they could sell the items and still make a profit after accounting for their own costs, shipping and Amazon’s commission, which typically runs about 15%.
Merchants had access to these products and knew Amazon shoppers wanted them, but they deliberately pulled them because the rules about selling them weren’t clear and the consequences for violations could be devastating. In a heavily automated system with little contact between merchants and Amazon employees, it can take weeks or months to reinstate suspended accounts. As a result, merchants do whatever they can to avoid being exiled—even if it means forfeiting sales of popular products. All of this was happening at a time when Amazon was prioritizing essential household items, such as cleaning supplies.
It’s unclear how many merchants yanked their products and how much doing so exacerbated shortages that were also fueled by supply-chain disruptions. But consultants who help merchants avoid suspensions say they were inundated with calls from clients during the price-gouging crackdown. One of them, a former Amazonian named Chris McCabe, says he heard from hundreds of merchants and advised dozens of them to stop selling products because the rules were unclear. “Amazon just did a giant sweep and they really scared a lot of people away from selling wipes and toilet paper,” he says.
Amazon, through a spokeswoman, said the company’s policies have always prohbited price gouging.
“Our objective is to protect customers from clearly egregious price increases,” she said. “If a seller believes we’ve made an error, we encourage them to reach out to us directly and we will investigate the matter.”
The Covid-19 outbreak roiled Amazon’s online marketplace, where millions of merchants sell hundreds of millions of products. Amazon differs from major retailers like Walmart Inc. and Target Corp. that buy most of their inventory wholesale and then sell it in their stores at a markup. Most of the products sold on Amazon come from independent merchants who set their own prices. In ordinary circumstances, the marketplace uses technology to efficiently match supply and demand. Amazon releases data about the products customers are looking for on the site, which signals the merchants what’s in demand.
The pandemic prompted governors around the country to declare states of emergency—which in many cases triggered price-gouging laws enacted to protect consumers from price spikes following disasters. But precisely what constitutes price gouging and which products are protected varies from state to state. It’s a difficult phenomenon for Amazon to manage since the marketplace can match buyers and sellers from different states.
While the company uses complex algorithms to monitor prices, whether or not a merchant is in violation depends on where the customer lives. Some states set specific thresholds for price gouging, such as 10% above typical prices. Other states define it vaguely with words like “unconscionable.” Amazon merchants offer the same prices nationally and don’t know in advance where their customers live. All of this makes it difficult for Amazon to manage with clear rules, making merchants suspect the company got too aggressive in trying to prevent price-gouging violations with algorithms.
Amazon hasweathered price-gouging complaintsin the aftermath of hurricanes and other natural disasters where the state of emergency is limited geographically. The coronavirus outbreak swept the entire nationand has lasted for months, so price-gouging concerns took on greater prominence. Several lawmakers proposed federal legislation to prevent it, and Amazon in May also advocated for a federal solution, highlighting the difficulties of addressing the phenomenon on its own despite having a team devoted to watching for price gouging and technology designed to spot it on its web store.
“The disparate standards among states present a significant challenge for retailers working to assist law enforcement, protect consumers, and comply with the law,” Brian Huseman, a former Federal Trade Commssion attorney who now oversees Amazon’s public policy team in Washington, D.C., wrote in a May blog post supporting federal legislation.
Amazon is eager to be seen by regulators as an ally in fighting price gouging, not a perpetrator. The company says it removed more than 500,000 offers from its site and suspended 6,000 accountsfor violating price policies since the pandemic started. The company has been cooperating with attorneys general in several states by sharing information about sellers accused of improperly jacking up prices.
Who is responsible for price-gouging violations has already becomea new area of dispute between Amazon and its merchant partners, which have also sparred over who bears responsibility for policing counterfeits on the marketplace or collecting sales taxes. The Online Merchants Guild, an industry group representing e-commerce sellers, in May filed a lawsuit seeking to prevent Kentucky Attorney General Daniel Cameron from imposing state price control laws on Amazon merchants. Instead, the attorney general should enforce the laws against Amazon, the lawsuit states.
In the meantime, merchants say the fact that they received automated warnings despite not raising prices shows that Amazon’s crackdown went too far.One merchant who has been selling products on the site for six years says she eliminated about 100 items, including hand sanitizer and toilet paper, after receiving warnings in March about price gouging. The merchant, who gets the inventory from the same manufacturers and distributors that supply pharmacies and supermarkets, says she hadn’t raised prices at all on most of the products in 2020.
Another long-time Amazon merchant who has been selling office supplies on the site, including hand sanitizer and cleaning products, says he received two email warnings in March about potential price violations that didn’t even specify which of the thousands of products he sells were in question. He spoke with a representative in Amazon’s seller support department who identified several products raising alarms, including plastic food containers, toilet paper and a body wipe. The rep wouldn’t say how much the merchant would be allowed to charge, so he stopped selling products likely to trigger a violation.
Even Amazon merchants who raised prices significantly during the pandemic can show regulators that the hikes were not exploitative, says CJ Rosenbaum, a New York attorney who represents Amazon merchants. Many Amazon sellers use software to set prices, which automatically shoot up when inventory is low. This is done to protect merchants’ reputation on Amazon, which uses algorithms to monitor their performance and punishes them for running out of stock. That software can also add extra shipping costs, which some state price-gouging laws allow. Still, the cost of hiring lawyers to fend off regulators and the risk of losing an Amazon business isn’t worth it for many merchants to sell the products Amazon started aggressively monitoring, Rosenbaum says.
“There was no clarity on what pricing was fair,” he says, adding that dozens of his clients deliberately avoided certain in-demand products to avoid suspensions. “Amazon treated sellers very poorly.”


fortune--2020-06-11--Jittery traders send stocks plunging on fears of a ‘second wave’

Stocks are opening sharply lower on Wall Street as investors turn jittery once again in the face of rising numbers of coronavirus infections in many U.S. states and countries. The S&P 500 was down 2.5% in early trading Thursday. Stocks have been rallying over the past two months at a rate that many skeptics said was unsustainable and that didn’t reflect the dire condition of the economy. The Federal Reserve warned a day earlier that the road to recovery would be long. European and Asian markets also fell. Bond yields fell. The price of crude oil dropped 7%.
Global stock markets tumbled Thursday after the Federal Reserve signaled a long path to recovery from the devastation of the coronavirus pandemic and amid reports of rising numbers of coronavirus infections in many countries.
In the U.S., Texas and Florida were among the states reporting jumps in the number of coronavirus cases after precautions were relaxed last month. The total number of U.S. cases has surpassed 2 million.
Globally, India reported a record number of nearly 10,000 new coronavirus cases over the past 24 hours with health services in the worst-hit cities of Mumbai, New Delhi and Chennai becoming swamped by the rising infections.
In South Korea, the latest 45 new cases came in a weekslong resurgence that health authorities said they fear might develop into a massive wave.
Such developments have raised alarm, said Stephen Innes of AxiCorp.
“After all, a secondary outbreak is nothing to sneeze at as traders remain in a state of risk limbo watching risk assets for signs of continuation or stall,” Innes said in a commentary.
In Europe, France’s CAC 40 was 2.6% lower at 4,923 and Germany’s DAX dropped 2.6% to 12,203. Britain’s FTSE 100 fell 2.4% to 6,179.
Japan’s benchmark Nikkei 225 sank 2.8% to close at 22,472.91, while Australia’s S&P/ASX 200 skidded 3.1% to 5,960.60.
South Korea’s Kospi dropped 0.9% to 2,176.78 and Hong Kong’s Hang Seng slipped 2.3% to 24,480.15. The Shanghai Composite shed 0.8% to 2,920.90.
The outlook for a recovery from the worst downturn in decades is uncertain as states and countries push ahead with reopenings from pandemic shutdowns.
Brazil, Mexico, South Africa, India and Pakistan are among countries easing tight restrictions before their first outbreaks have peaked and before establishing detailed surveillance and testing systems to keep the virus under control.
Health experts have warned that could ultimately have devastating consequences.
The Federal Reserve emphasized Wednesday that the central bank will keep providing support to the economy by buying bonds to maintain low borrowing rates.
It forecast no rate hike through 2022, which could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.
In other trading, benchmark U.S. crude oil dropped $1.68 to $37.92 a barrel. Brent crude, the international standard, fell $1.45 to $40.28 a barrel.
The dollar was trading at 107.10 Japanese yen, down slightly from 107.12 yen late Wednesday. The euro inched down to $1.1359 from $1.1377.


fortune--2020-06-11--Uber CEO Dara Khosrowshahi is an adept dealmaker. But Grubhub has eluded him

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Uber CEO Dara Khosrowshahi is known for being an adept dealmaker, building travel company Expedia with a series of acquisitions to fend off competitors. But a deal that could have been his largest yet fell apart.
Late Wednesday, Amsterdam-based food delivery company Just Eat Takeaway.com confirmed plans to merge with Grubhub in a $7.3 billion all-stock deal—beating out Uber who had been in courting its U.S. food-delivery peer for far longer in a deal that could have created the largest U.S. food-delivery firm.
In comparison, Just Eat Takeaway.com has no operations in the U.S., and appears to offer a higher price: 0.671 shares of Just Eat Takeaway for each share of Grubhub, implying a value of about $75.15 for each share and valuing Grubhub at about $7.3 billion. Reports suggest that Uber had also offered stock, though the trade valued shares of Grubhub closer to $70 apiece.
The Uber negotiations were clouded with concerns about antitrust scrutiny. Unable to come to an agreement on how to handle potential regulatory issues, Uber reportedly bowed out, and left a rather salty message about the negotiations as well.
“Like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants,” an Uber spokesperson said in a statement. “That doesn’t mean we are interested in doing any deal, at any price, with any player.”
Will Uber seek to snap up another food-delivery company? The antitrust concerns are certainly a headache—but Khosrowshahi is also known for his proclivity toward dealmaking. The chief executive tacked on the likes of Homeaway (acquired for $3.9 billion) and Orbitz ($1.6 billion) to build out Expedia. In negotiations with Grubhub, Uber has also shown its willingness to shell out shares worth billions for a tie up. Before talks broke down, the duo reportedly settled on a deal that, at current prices, would value Grubhub at around $5.9 billion.
And though Just Eat Takeaway has no U.S. presence, analysts believe the tie up will only galvanize the food-delivery wars, pressuring prices at a time when regulatory pressures around delivery fees are already hounding the industry.
Perhaps U.S.-based food delivery companies will also have time to figure out their own strategy, as Just Eat Takeaway handles two mega mergers at once: The company’s own name-making £6.2 billion ($7.7 billion) combination between Takeaway.com and U.K.’s Just Eat only received approval from U.K. antitrust authorities in April.
China-listings FOMO: Scrutiny over Chinese listings in the U.S. has been fueled in no small part by the Luckin Coffee scandal and current geopolitical tensions. But that also means U.S. investors could miss out as some Chinese companies self-select out. Here’s my colleague Grady McGregor on the Hong Kong IPO of gaming company Netease, which raised $2.7 billion:
“The Hong Kong IPO represents Netease ‘returning to a market in which we share a closer mutual understanding,’ said CEO William Ding. The comment was perhaps swipe at the U.S.’s Nasdaq, where Netease has traded since 2000 and where skepticism of Chinese companies is growing.”
VENTURE DEALS
- Postman, a San Francisco-based platform for API development, raised $150 million in Series C funding. Insight Partners led the round and was joined by investors including CRV and Nexus Venture Partners.
- Checkmate Pharmaceuticals, a Cambridge, Mass.-based clinical stage biotech focused on cancer immunotherapy, raised $85 million in Series C funding. Longitude Capital and Novo Holdings led the round and were joined by investors including Medixci, Omega Funds, Clough Capital Partners, Sectoral Asset Management and BrightEdge.
- Transcend, a San Francisco-based data privacy infrastructure company, raised $25 million in Series A funding. Index Ventures led the round alongside Accel, and was joined by investors including South Park Commons, Phil Venables (Board Member and former CISO, Goldman Sachs), and Dylan Field (CEO, Figma).
- Alkemics, a Paris-based platform for brands to launch products with retailers, raised €21 million ($24 million) in Series C funding. Highland Europe, Cathay Innovation, Index Ventures, SEB Alliance and Serena Capital invested.
- Ontruck, a European l road freight platform, has secured an investment round of €17 million ($19.3 million) led by OGCI Climate Investments. Cathay Innovation, Atomico, Idinvest Partners, Total Carbon Neutrality Ventures, and Endeavor Catalyst also participated.
- Neptune Networks, a London-based fixed income pre-trade market utility, raised $15 million across two-tranches. Investors included Bank of America, Barclays, BBVA, BNP Paribas, Citi, Crédit Agricole CIB, Credit Suisse, Deutsche Bank, Goldman Sachs, ING, J.P. Morgan, Morgan Stanley and UBS.
- Ocient, a Chicago-based provider of data analytics solutions for datasets, raised $15 million. OCA Ventures led the round and was joined by investors including In-Q-Tel.
- Ethyca, a New York-based global data privacy solution, raised $13.5 million in Series A funding, PayPal cofounder Max Levchin invested. Read more.
- Binah.ai, a Tel Aviv, Israel-based provider of general health and wellness video-based monitoring tools, raised $13.5 million in Series B funding. Maverick Ventures Israel led the round, and was joined by investors including Esplanade Ventures, Sompo International, GiTV, and iAngels.
- Conversa Health, a Portland-based virtual care and communication platform, raised $12 million in Series B funding. Builders VC and Northwell Ventures coled.
- Ula!, a Jakarta-based wholesale e-commerce marketplace, raised $10.5 million in seed funding. Investors include Sequoia India, Lightspeed India, SMDV, Quona Capital, Saison Capital, and Alter Global.
- Lane, a Toronto-based workplace platform,raised $10 million in Series A round funding. Round13 Capital led the round, and was joined by investors including Alate Partners and Panache Ventures.
- CareAcademy, a Boston, Mass.-based home care workforce skilling platform, raised $9.5 million in funding led by Impact America Fund (IAF).
- OPORA, a cybersecurity firm, raised $7 million led by Jerusalem Venture Partners.
- Protera, a Santiago, Chile-based startup developing new proteins for sustainable solutions, raised $5.6 million in Series A funding. Sofinnova Partners led the round.
- Wellsheet, a Newark, NJ-based healthcare records company, raised $3.8 million in Series A funding. SpringTide Investments led the round, and was joined by investors including BioAdvance and Newark Venture Partners.
- Vectice, the San Francisco-based cloud-based platform, raised $3 million in seed funding. Spider Capital and Crosslink Capital led the round and was joined by investors including Global Founders Capital,.
- Scope, a San Francisco-based implementation platform, raised $1 million in seed funding. Craft Ventures led the round and was joined by investors including Plaid Co-Founder William Hockey.
- Axio, a New York-based cyber risk management company, raised an undisclosed amount of funding. Fin Venture Capital IA Capital Group co-led the round, and were joined by investors including NFP Ventures.
PRIVATE EQUITY
- Fidelis, an insurer and reinsurer, raised $500 million in funding from existing investors. Backers include Crestview Partners, CVC Capital Partners and Pine Brook.
- Francisco Partners invested $30 million in Kyruus, a provider search and scheduling solutions for health systems.
- A consortium of investors led by BlackRock invested in Trustly, a Swedish bank transfer platform. Financial terms weren't disclosed.
- Fortress Investment Group agreed to acquire Finjan Holdings (NASDAQ: FNJN), an East Palo Alto-based cybersecurity company for roughly $43.9 million.
- VertiGIS, backed by Battery Ventures, acquired Mapcom Systems, a Richmond, Va.-based telecommunications software and services provider. Financial terms weren't disclosed.
- Axios Industrial Group, backed by White Deer Energy, agreed to merge with A&L Industrial Services, backed by Hastings Equity Partners. Financial terms weren't disclosed.
OTHERS
- DSM is among the final candidates to buy Erber Group, an Austrian animal feed additives maker. The deal has an estimated value of 1 billion euros ($1.14 billion) after EQT withdrew its bid, per Reuters. Read more.
- Ningbo Shanshan Co. signed a conditional contract to acquire most of LG Chem’s LCD polarizer business for $1.1 billion. Read more.
BREAKUPS, HANGUPS, AND BANKRUPTCIES
- Simon Property Group canceled its $3.6 billion deal to acquire Taubman Centers, a rival shopping mall operator.
IPOS
- JD.com, the Chinese retailer, raised HK$30.1 billion ($3.9 billion) in its Hong Kong share sale, per Bloomberg. Read more.
F+FS
- Apollo Global Management Inc. is seeking to start its own credit investment business in India, ending a joint venture with ICICI Bank, per Bloomberg. Read more.
PEOPLE
- Verizon Ventures added Tammy Mahn as a Managing Director based out of Tel Aviv.


fortune--2020-06-11--‘Live PD’ is canceled by A&E amid protests and a reportedly filmed police custody death

A&E Network has canceled the police reality series “Live PD” following weeks of protests inspired by the death of George Floyd and a report that a crew from the show filmed the arrest of a black man who died after he was restrained by police.
The cable network announced the move Wednesday, a day after the similar show “Cops,” on the air for 33 seasons, was dropped by the Paramount Network.
“This is a critical time in our nation’s history and we have made the decision to cease production on Live PD,” A&E said in a statement. “Going forward, we will determine if there is a clear pathway to tell the stories of both the community and the police officers whose role it is to serve them. And with that, we will be meeting with community and civil rights leaders as well as police departments.”
The cancellation also comes a day after a reports from the Austin American-Statesman and KVUE-TV that 40-year-old Javier Ambler, who was black, died in Texas last year after sheriff’s deputies repeatedly used stun guns on him, despite his cries for help and pleas that he was sick and couldn’t breathe.
Prosecutors who are investigating Ambler’s death said the presence of the “Live PD” crew made the arrest, which was captured on police body-camera video obtained by the news outlets, particularly troubling.
A&E said in a previous statement that its video never aired because of a policy against showing a death, and it did not keep the footage after it was informed the initial investigation had closed. A&E said neither the network nor the show’s producers “were asked for the footage or an interview by investigators from law enforcement or the District Attorney’s office.”
Just as Paramount Network did with “Cops,” A&E had already ceased airing episodes of “Live PD” before announcing Wednesday that it was dropping the show altogether.
“Live PD,” which had been on the air since 2016, had a more news documentary approach than “Cops,” which let police speak almost entirely for themselves.
“Shocked & beyond disappointed about this,” the show’s host, veteran journalist Dan Abrams, said on Twitter. “To the loyal #LivePDNation please know I, we, did everything we could to fight for you, and for our continuing effort at transparency in policing. I was convinced the show would go on.”