fortune--2020-08-03--TikTok tit-for-tat? Beijing has no obvious answer to Trump’s app ban

Tit-for-tat retaliation has colored the U.S.-China feud in recent years. The U.S. closes a Chinese consulate? Beijing can do that, too. The Trump administration cracks down on employees of China’s state-run media and Beijing expels U.S. journalists from the mainland. The trade war was a months-long exercise in the two superpowers hurling tariffs back and forth. But when it comes to the U.S.’s potential ban of Chinese-owned TikTok, Beijing is running low on means of payback.
On Friday, U.S. President Donald Trump said the U.S. would “immediately” ban the video sharing app TikTok from the U.S. due to data security concerns. The U.S. argues that TikTok presents a national security risk because it could funnel American user data directly to the Chinese government, an allegation that TikTok and its Beijing-based owner ByteDance deny.
Over the weekend, the Trump administration appeared to walk back the threat of a ban, as top government officials met with Microsoft as Microsoft considered a takeover of TikTok. At the same time, U.S. Secretary of State Mike Pompeo said on Sunday that a potential ban could extend to other Chinese apps like WeChat, the messaging app owned by Chinese tech giant Tencent.
On Monday, ByteDance CEO Zhang Yiming said in a leaked email to his employees that ByteDance was involved in “preliminary discussions with a tech company” in the U.S. but didn’t know “exact details” of the potential “end solution.”
At this point, TikTok seems destined for ownership by a U.S. company or to be subject to an outright U.S. ban. Either way, the Trump administration’s action against the company marks an escalation in already deteriorating U.S.-China relations. Ordinarily, Beijing has met such measures with an equal, proportionate response. But China’s ‘Great Firewall’ already blocks nearly all American social media platforms from operating on the mainland’s Internet, meaning Beijing has a limited arsenal as it considers how to retaliate.
Tit-for-tat relations
In its souring relations with the U.S., “China has a clear strategic line of resistance without escalation—as long as that remains possible,” said Greg Austin, a senior fellow for cyber, space, and future conflict at the International Institute for Strategic Studies in Singapore.
The trade war, for example, began in July 2018 when the U.S. placed 25% tariffs on $34 billion worth of Chinese imports. Beijing immediately responded with its own 25% tariffs on $34 billion worth of American imports. More recently, Beijing responded to U.S. sanctions against Chinese officials alleged to have committed human rights violations with its own sanctions against several prominent U.S. lawmakers.
But with tech, and especially a social media platform like TikTok, Beijing seems to have few options for a proportionate response because it’s long banned major U.S. social media platforms like Facebook, Twitter, and Instagram from operating within its borders.
“China frankly has limited firepower in its response [to the TikTok ban] economically,” said Shaun Rein, managing director of China Market Research Group in Beijing.
Some American tech companies like Apple and Microsoft derive some revenue from the Chinese market. Apple, for example, relies on China to both make and sell its computers and iPhones. Microsoft’s LinkedIn is one of the few America social media platforms that is not banned in China since its site there is separate from its U.S. platform; it operates as a separate joint-venture company called LinkedIn China.
Rein doesn’t expect Beijing to go after Apple or Microsoft because “the leadership of both companies have followed the law and been respectful of the government.”
He said that Beijing’s response to a TikTok ban could instead target the operations of tech firms like Google, Amazon, eBay, or Cisco that have relatively small operations in China.
Google’s platform, for example, is blocked in China, but the company still operates research and data centers in China, and Chinese companies advertise on its platform abroad. And while Amazon recently shut down its marketplace to third-party Chinese sellers, the company still has a website in China that allows Chinese consumers to purchase goods from abroad.
At least in the short term, Beijing is focused on its economic recovery from the coronavirus pandemic and “wants to show it is still open for investment from American firms,” Rein said. In fact, China’s vice president for commerce last week reassured U.S. companies that they are still welcome in China. “China doesn’t want to punish American companies,” Rein said, but it “won’t back down” from the U.S. either.
Under the surface
Ultimately, Beijing could deliver its reprisal by accelerating its shift away from American tech, an initiative that’s already underway.
Austin says firms like Microsoft and IBM “occupy a central place” in China’s tech infrastructure. He says that U.S. backlash against Chinese tech has already prompted China to speed up efforts to reduce its reliance on these firms over the last six months. The TikTok episode could further incentivize Beijing to pursue technological independence. That, in and of itself, could “hurt the ability of U.S. tech companies to sell into China,” Rein said.


fortune--2020-08-03--Private equity wields a lot of power to promote diversity. Here’s how Carlyle is upping its efforts

Warning : This malware is tied to the Chinese government , U.S. says

Happy Monday, Term Sheet readers. Finance reporter Anne Sraders here, filling in for Lucinda.
Corporate America has undergone a reckoning in the past few months following the police killing of George Floyd. Even the world of private equity has added its voice to those condemning racism (and, for some, looked inward at their own diversity). Yet private equity has long been a laggard in inclusion for women and underrepresented minorities.
The Carlyle Group, with its mostly white and male leadership, just announced new commitments to diversity not only within its own ranks, but also for the boards of its portfolio companies: The firm declared a goal late last week to have 30% of all board directors in its portfolio companies globally represent women and minorities by 2023. Carlyle commands a heavy-hitting portfolio, recently taking ZoomInfo public.
PE firms, with their coffers chock full of cash, have a big opportunity to influence diversity in the companies they own.
“That’s why we’ve set this new goal—because the board has the opportunity to significantly shape an organization,” Carlyle’s head of diversity and inclusion, Kara Helander, told Term Sheet. From conversations she’s having with investors and the firm’s portfolio companies, “There’s a tremendous desire to understand what are the most effective things companies can do. I can tell you that management teams and CEOs are thinking about, ‘How do we lead in the most effective way around this?’”
Back in 2016, Carlyle committed to ensuring portfolio companies in the U.S. have at least one board member from an underrepresented group within two years of the firm’s ownership. Helander tells Term Sheet that Carlyle just received word that 100% of its companies in U.S. Buyout, the firm’s largest fund, have reached that goal. When it was set four years ago, only 38% of companies in U.S. corporate private equity met the target.
At the end of 2019, 37% of the firm’s employees in the U.S. were ethnic minorities, and almost half of investment professionals hired in the U.S. last year were female, Black, or Latinx. As part of its new goals, Carlyle is now committing to interview at least one Black, Latinx, Pacific Islander, or Native American candidate for each open role at the firm. Helander says the firm has “this notion that [diversity] has to be embedded in what we do as a business, and when we do that, it returns value.” Carlyle is also making diversity and inclusion a core part of assessments and incentives for rewards and promotions, Helander tells Term Sheet, and starting in 2021, the firm will be asking employees to set personal goals related to diversity and inclusion.
The news comes as others in the industry have been seeking to up their diversity efforts, such as Blackstone, which is starting to look to historically Black colleges and universities for recruiting. And even before Floyd’s death, there’s been pressure for companies to up the ante to diversify on the exit side. In February, Goldman Sachs announced that the firm won’t take any company public unless it has at least one diverse board member.
Private equity’s historically glacial pace at improving diversity will leave many skeptical—but Helander, for one, thinks those in her industry are now understanding these issues better.
“Look, I’m hopeful. I am an optimist,” she says.
Anne Sraders
Twitter: @AnneSraders
Email: anne.sraders@fortune.com
VENTURE DEALS
-Volante Technologies , a Jersey City, New Jersey-based cloud-based payments and financial messaging provider, raised $35 million in funding. Wavecrest Growth Partners led the round, and was joined by investors including BNY Mellon, Citi Ventures, PostePay and Visa Inc.
- Palmetto, a Charleston, S.C.-based provider of software to manage solar energy, raised $29 million in Series B funding from investors including Evergy Ventures, Arctern Ventures, Shell Ventures, Greycroft, Lerer Hippeau, Box Group, Falkon Ventures and the Leto Family Office.
-Ecoplant, an Israel-based software platform to optimisize compressed air systems, raised $8 million in Series A funding from Ecolab. Read more.
-Trobix Bio, an Israel-based biotech focused on fighting antimicrobial resistance, raised $3 Million in Series A funding led by Chartered Opus.
PRIVATE EQUITY
-thyssenkrupp, a Germany-based industrial engineering conglomerate, closed the sale of its elevator business to a consortium of private equity investors including Advent International, Cinven, and RAG Foundation, for €17.2 billion ($20.3 billion). Read more.
-Paya, an Atlanta-based ecommerce payments solutions provider owned by GTCR, will go public via blank-check company FinTech Acquisition Corp III. The merger values Paya at around $1.3 billion. Read more.
-TerSera Therapeutics, owned by GTCR, agreed to acquire product Xermelo (telotristat ethyl) from Lexicon Pharmaceuticals (NASDAQ: LXRX), a Woodlands, Texas-based biopharmaceutical company, for $159 million in an upfront payment.
-PAI Partners is in exclusive negotiations to acquire a majority stake in Amplitude Surgical, a France-based orthopedic products developer, for €2.15 ($2.53) per share, from Apax Partners. Read more.
-KKR agreed to acquire a majority stake in MasterD, a Zaragoza, Spain-based company that provides vocational training and educational services. Financial terms were not disclosed.
OTHERS
-Microsoft is in talks to buy TikTok, the video sharing app owned by Chinese internet company ByteDance and popularized by Gen Z users, as President Trump has considered banning the app, outlets including The New York Times report citing sources. Microsoft confirmed in a statement that the company will pursue the acquisition and will complete talks by September 15. Other investors may join Microsoft in the deal, the company said. Read more.
-Seven & i Holdings Co., the parent of 7-Eleven, will acquire Speedway, an Enon, Ohio-based convenience store and gas station chain, from Marathon Petroleum (NYSE: MPC) for $21 billion in cash.
-Siemens Healthineers AG agreed to acquire Varian, a Palo Alto, Calif.-based cancer treatment software and devices developer, for $16.4 billion in all-cash. Read more.
-Metro Bank agreed to acquire RateSetter, a London-based peer-to-peer platform that connects investors with borrowers, for an initial payment of £2.5 million ($3.3 million).
-Google (NASDAQ: GOOG) agreed to acquire a 6.6% stake in ADT, a Boca Raton, Fla.-based home security services provider, for $450 million.
-Mitratech acquired Tracker Corp, a San Francisco-based Form I-9 immigration compliance management software provider. Financial terms were not disclosed.
-Royal Dutch Shell’s Australia unit will acquire Select Carbon, an Australia-based carbon farming company that partners with farmers and landowners. Financial terms were not disclosed. Read more.
BREAKUPS, HANGUPS, AND BANKRUPTCIES
-Noble Corp, a London-based offshore oil-and-gas rigs contractor, filed for bankruptcy protection.
-Mood Media, an Austin-based provider of multi-media, scents, and music for businesses including hotels and retailers, filed for bankruptcy protection.
-Denbury Resources, a Plano, Texas-based oil and natural gas company, filed for bankruptcy protection.
-Lord & Taylor, the storied luxury department store, filed for bankruptcy protection. Read more.
-Tailored Brands, the Houston-based parent of men’s clothing stores Jos. A. Bank and Men’s Wearhouse, filed for bankruptcy protection.
IPOS
-Burgundy Technology Acquisition, a Cayman Islands-based blank check company led by former CEO of HP Leo Apotheker, plans to raise up to $400 million in an IPO. It is targeting investments in technology companies in Europe, Israel, and the U.S. It plans to list on the Nasdaq as “BTAQU”. Read more.
-Star Peak Energy Transition, a Evanston, Ill.-based blank check company formed by Magnetar Capital, plans to raise up to $350 million in an IPO. It is targeting investments in the sustainable energy industry. It plans to list on the NYSE as “STPK.U”. Read more.
-CSR Acquisition, a Wilmington, Del.-based blank check company led by Blue Harbour Group founder and CEO Clifton Robbins, plans to raise up to $300 million in an IPO. It is targeting investments with strong growth prospects and high barriers to entry, among other criteria. It plans to list on the NYSE as “CSRA.U”. Read more.
-BCTG Acquisition, a San Diego, Calif.-based blank check company formed by Boxer Capital, plans to raise up to $125 million in an IPO. It is targeting investments in the biotechnology industry. It plans to list on the Nasdaq as “BCTG”. Read more.
-Kymera Therapeutics, a Watertown, Mass.-based preclinical biotech developing protein degradation technology, plans to raise up to $100 million in an IPO. Atlas Venture Partners (26.8% pre-offering), Lilly Ventures Fund I, the venture arm spun out from Eli Lilly (6.5%), and Pzifer (5.2%) are among the company’s backers. It plans to list on the Nasdaq but has not yet chosen a symbol. Read more.
-Checkmate Pharmaceuticals, a Cambridge, Mass.-based clinical stage biotech working on therapies for immunity to fight cancer, plans to raise $75 million in an IPO by offering 5 million shares priced between $14 and $16. It plans to list on the plans to list on the Nasdaq as “CMPI”. Read more.
F+FS
-Greycroft, a New York City-based venture capital firm, is raising $300 million for its sixth fund. Read more.
PEOPLE
-Sequoia Capital added George Robson as a partner in Europe. Robson was previously a product lead at Revolut. Read more.


fortune--2020-08-03--Italy blocks Carnival’s attempt to restart its AIDA cruises this week

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Carnival Corp.’s efforts to woo passengers back to its cruise ships have hit another snag.
The world’s largest cruise company canceled two of the three cruises planned for its AIDA line this month, after failing to get regulatory approval from the Italian government to set sail.
“Contrary to our expectations, the final formal approval for the start of the short trips from August 5, 2020 by our flag state Italy is still pending,” Carnival said in a press release Monday. “Unfortunately, we therefore have to cancel the planned short trips with AIDAperla and AIDAmar with departure dates between August 5 and 12, 2020.”
The announcement demonstrates the complicated and global regulatory landscape that Carnival and its largest competitors, Royal Caribbean Group and Norwegian Cruise Line Holdings, must navigate in order to restart cruising while the pandemic still rages. Carnival, which keeps its corporate headquarters in Miami but its place of incorporation in Panama, operates its AIDA brand out of Rostock, Germany. But the three AIDA ships that it planned to start sailing again this month are “flagged” or registered out of Italy, meaning that country has the final say on whether or not the ships can bring customers back aboard.
Carnival has not yet canceled its third planned AIDA cruise this month, which is supposed to set sail on August 16. “We assume that we will receive the last formal approval by the flag state Italy in a timely manner,” the company said in its release.
But the cancellations of the first two AIDA trips do not bode well for Carnival’s plans to get its ships back in operation this summer, as it fights to recover from the sweeping effects of the COVID-19 pandemic on its industry. The coronavirus effectively shut down cruising in March and has since launched dozens of lawsuits over how Carnival handled COVID-19 outbreaks on its ships early this year.
Now Carnival and its competitors are trying to convince both passengers and international government officials that it’s safe to resume cruising—with limited and apparently diminishing success. Last month, the U.S. Centers for Disease Control and Prevention extended its “no sail” order for a second time, barring ships from resuming passenger operations in U.S. waters until at least September 30.
Whenever cruising does resume, it will be a much smaller industry. Carnival, which reported a $4.4 billion loss for the three months ended May 31, last week also said it was getting rid of two more cruise ships from a fleet that numbered 104 at the end of 2019. So far Carnival has announced plans to sell or scrap 15 of its ships this year, and is delaying the delivery of new ships it had previously ordered.


fortune--2020-08-03--Men’s Wearhouse and Jos. A. Bank parent company is the latest retailer to seek bankruptcy protection

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The ranks of retailers seeking relief from their mountains of debt during lean times rose again late Sunday when Tailored Brands, the owner of the Men’s Wearhouse and Jos. A. Bank chains, sought Chapter 11 bankruptcy protection.
The retailer had been facing big challenges before the COVID-19 pandemic, with men increasingly opting for more casual clothing at work and the rising popularity of newer brands and services like Suit Supply. Store closings during lockdowns and millions of men not needing new suits because they’re working from home for now pushed Tailored over the edge. In its most recent quarter, sales fell 60.4% to $287 million.
The company is not alone in facing that problem: Brooks Brothers Group, Ascena Retail Group, the owner of Ann Taylor, and Neiman Marcus have all filed for bankruptcy protection in recent months Nordstrom, a much healthier company financially, has also focused much of its men’s merchandise on casual clothing in the last few years.
Tailored Brands said that its restructuring deal with more than three-fourths of its senior lenders will slash at least $630 million in debt. The company will get $500 million in bankruptcy financing to keep operating during the chapter 11 case.
Men’s Wearhouse bought Jos. A. Bank in 2014 in a bitter battle with its smaller rival, which had tried to buy it earlier as it hoped to gain a stronghold on men’s suit stores. But Jos. A. Bank’s problems proved very hard for the company to fix: Jos. A. Bank’s famous “Buy 1 Suit, Get 3 Free” not only decimated profits but also the brand’s aura, something nearly impossible to reverse. The company later changed its name to Tailored Brands to reflect its status as a portfolio company.
The company had previously warned it could file for bankruptcy protection and last month said it would lay off 20% of its corporate staff and close as many as 500 retail locations.
Department store chain Lord & Taylor also filed for Chapter 11 protection on Sunday. According to BankruptcyData.com, some 20 large private and public retailers have declared bankruptcy this year. Those have included J.C. Penney and J.Crew among others.


fortune--2020-08-03--Johnson & Johnson antidepressant spray approved for treating those at risk of suicide

Johnson & Johnson’s Spravato has been approved as the first antidepressant for actively suicidal people, as doctors are becoming increasingly concerned about COVID-19’s effect on the mental health of Americans.
The Food and Drug Administration approval means the quick-acting nasal spray will be available to people with suicidal thoughts and a plan to put them into action, said Michelle Kramer, vice president of J&J’s U.S. neuroscience medical-affairs unit. That constitutes 11% to 12% of as many as 17 million Americans who have major depressive disorder.
Spravato has been used by about 6,000 people for treatment-resistant depression since its approval in March 2019, Kramer said. J&J’s decision to study it in depressed people actively contemplating suicide bucks a trend among drugmakers who routinely exclude such patients from trials.
Part of the thinking behind the decision was that Spravato’s ability to act quickly could mean it works differently than older antidepressants that can take weeks to kick in, Kramer said. In its studies, J&J found those who got the drug had a rapid reduction in the severity of their thinking, although the results didn’t differ in a statistically significant way from patients given a placebo.
America has been in the throes of a suicide crisis even before the pandemic, with the rate rising 30% from 1999 to 2016. COVID-19 closures limited the number of people given the spray as a depression treatment in-person at specified centers.
Ultimately, though, the numbers improved as patients and centers adapted and concerns grew within the mental health community that physical distancing and social isolation of quarantine may exacerbate people’s existing problems or introduce new ones.
Numbers stabilized
“Relatively rapidly within a few weeks we saw the numbers stabilize, which was pretty interesting for us and validating in the sense that clinic and patients alike were continuing to make this available,” Kramer said. “We certainly see more and more sites sign on and more and more patients are treated.”
Spravato is a close chemical cousin of the anesthetic ketamine, which differs from existing antidepressants because it acts on the glutamate system in the brain rather than on seratonin or norepinepherine. Scientists have been working to better understand how the drug helps patients and why it works so quickly.
The drug’s approval last year marked the first major breakthrough for depression since 1987. President Donald Trump has since trumpeted the drug as having the potential to curb veteran suicides, but a Veterans Affairs medical panel only approved the drug’s use on a limited basis.


fortune--2020-08-03--COVID-19 is causing a backslide in workplace gender equality. Here’s how to stop it

Women are in the fight of their lives as we run the risk of unraveling decades of progress. Stopping the dramatic COVID-19 backslide in workplace equality requires immediate action.
Women and minorities are disproportionately impacted by the coronavirus pandemic—in the job types and industries affected as well as in the increased demands they face as primary caretakers at home, exacerbated by the current and not-fully-understood childcare crisis. UN Secretary-General Antonio Guterres has acknowledged the pandemic “is having devastating social and economic consequences for women and girls.”
The economic impact of working moms’ coronavirus-related juggling act has been estimated at $341 billion. Not only are women and working moms balancing a plethora of responsibilities as the lines between career and parenthood are indefinitely blurred with shelter-in-place, they are also fearing for their jobs—approximately 60% of the jobs eliminated in the first wave of pandemic-induced layoffs were held by women. Single moms have been particularly hard hit by the crisis, losing jobs at a far higher rate than other families with children.
Because of this, the female labor force participation rate dipped below 55% (54.7%) in April 2020 for the first time since February 1986, when it was at 54.8%.
The accommodations and food service industry, as well as the healthcare and social assistance industry, have unsurprisingly been some of the hardest-hit employers. Women of color make up a disproportionate share of workers in both industries, at 24.3% and 30.3%, respectively. Not only are they losing their jobs, but returning to the workforce is harder for women of color, who frequently experience higher unemployment rates than their white counterparts.
We are living in a moment in history unlike any in our lifetimes, with an unstable confluence of factors triggering the loss of a generation of progress in workplace equality—a lost generation of professional, predominantly millennial women.
Not since 9/11 have Americans experienced a defining event that so fundamentally and immediately changed our day-to-day lives.
WerkLabs, the data and insights division of The Mom Project, recently completed a 2,000-person study on COVID-19’s present and future impacts. The findings are alarming. While the majority of those surveyed reported being adversely affected professionally by COVID-19, self-reported job satisfaction scores for women are 27% lower than those for men when considering employee experience and socio-emotional factors.
While both women and men anticipate staying in the workforce at similar levels over the next three months, women are nearly twice as likely as their male counterparts to leave their employer within a year.
For employers, the time to act is now. Business leaders have a unique opportunity to enact change that will keep diverse talent in the workplace while creating a culture where they can grow and thrive. Here’s what we recommend:
Embrace and implement flexibility
The shift to more progressive work policies should not be limited to Bay Area tech companies; all companies will benefit from a more flexible workplace. Among other things, they should:
Embrace remote. Professionals who are limited by rigid in-office requirements can thrive in a remote work environment. Remote work improves employee engagement and significantly expands your candidate pool, allowing you to reach the best talent.
Revisit job structures and innovate beyond the 40-hour work week. Consider four-day work weeks and 30-hour schedules, which are shown to improve productivity.
Consider what’s best by team and department. What’s right for sales might not fit for engineers. Get a pulse from your leaders and employees to find a plan that is optimal by team case.
Lead with compassion
As the world has shifted overnight, our teams need us to lead with respect and compassion, and we must gain their trust that we are there on a human level. We should:
Train managers on how to support teams who are juggling the ever-evolving challenges of work, family, anxiety and isolation. Consider offering new benefits that will help employees combat these challenges.
Increase frequency of communication touch points from leadership and provide more informal settings for team members to ask questions and let their voices be heard.
Lead by example. Show your team you’re committed to building a more human-centric workplace by taking days off and assuring them they’re supported in bringing their whole self to work.
Invest in inclusion & diversity
Expand, don’t pause or restrict, inclusion and diversity initiatives and hiring. More diverse and inclusive companies are better positioned to create more effective and adaptive teams.
Act now. Seizing the moment to reaffirm your commitment to I&D will position your business to win the talent war, improve the quality of decision making, increase insight and innovation, drive employee engagement, and strengthen reputation.
Stay flexible. Be cognizant of how your internal stakeholder groups’ needs differ, and the extent to which business critical decisions impact diverse employee groups differently.
As leaders, what we do in the coming months could define our legacy. Let’s not squander this once-in-a-lifetime opportunity. Let’s leave the world and workplace in a better, more inclusive place than when we arrived.
Allison Robinson is the CEO and founder of The Mom Project, a leader in helping businesses attract and retain female talent.


fortune--2020-08-03--Next Clorox boss will bring the number of Fortune 500 women CEOs to 38, highest yet

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The Clorox Company said on Monday that its president and the key architect of its long term growth plan would take the reins of the household goods company next month, setting a new record for the number of women CEOs at the helm of a Fortune 500 company.
Once Linda Rendle, an executive at Clorox since 2003, takes the corner office on September 14, the number of female chief executives leading a Fortune 500 company will rise to an all-time high of 38 women.
Rendle will replace Clorox’s CEO of nearly six years, Benno Dorer, who will continue to chair the company’s board. Rendle, named president in May in a move that telegraphed her ascent to the CEO job, has held several major roles at Clorox over the years that have given her a deep understanding of the company’s inner workings, including leading global operations for its cleaning business. She started at Clorox in sales for the company’s charcoal and insecticides businesses. Before that, Rendle had worked for Procter & Gamble in different sales jobs.
Last year, the 42-year-old oversaw the drafting of Clorox’s IGNITE strategy, an initiative aimed at deepening the company’s presence in newer areas like wellness and nutraceuticals, drawing in more online sales, and spurring more innovation. The company has long wanted to be less reliant on its namesake cleaning products, whose sales have been stratospheric during the pandemic, and has been moving into environmentally friendly spaces with products like compostable cleaning wipes.
“We continue to have a significant role supporting public health, given the ongoing needs and changing behaviors of our consumers and communities,” Rendle said in a statement.
She will take over a company in very good shape. In its fiscal fourth quarter, revenue rose by a third at Clorox’s health and wellness division, which generates more than 40% of total sales and includes cleaning products and supplements. What’s more, sales gains were strong in most categories: Beyond its famous bleach, Clorox’s portfolio of products includes Pine-Sol, Liquid-Plumr, Fresh Step kitty litter, Glad garbage bags, Kingsford charcoal, and Hidden Valley salad dressing. Total company revenues last year came to $6.7 billion.


fortune--2020-08-03--She could be the first Afro-Latina in Congress

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Good morning, Broadsheet readers! Mary Barra and Cathy Zoi team up on electric vehicle charging, TikTok’s U.S. GM responds to President Trump’s threat of a ban, and Candace Valenzuela could be the first Afro-Latina in Congress. Have a productive Monday.
– Milestone win. Last month, Candace Valenzuela won her Democratic primary runoff for Texas’s 24th district. The potential impact of that victory goes beyond her Dallas-Forth Worth area constituents: If she wins the general election in November, Valenzuela will become the first Afro-Latina in Congress.
The former school board member’s primary win caught broader attention following the June victory in New York’s 15th district of Ritchie Torres, who is all but assured to head to Congress in the fall. Torres, who is Afro-Latino, wrote an op-ed shining a light on the fact that, based on current Congressional rules, he would not be allowed to join both the Congressional Black Caucus and the Congressional Hispanic Caucus—an indication of just how antiquated the government can be on issues of race and ethnicity.
Valenzuela still has a general election to win, but she would face the same outdated restriction if she gets to Washington. “We’re all bound to each other. Our fortunes, our futures come together,” she says of the ties between the Black and Latino communities.
I spoke to her last month about what her milestone election would mean to her—she says it’s arriving “far too late”—and the other issues she has highlighted throughout her campaign: homelessness, domestic abuse, and motherhood.
“People need to have a way to understand homelessness,” Valenzuela told me, explaining why she decided to share her family’s history with homelessness and domestic violence. The issues are all interconnected, with violence at home leading Valenzuela and her mother to end up without a roof over their heads. I highly recommend watching her powerful campaign ad for more of her story.
Read the rest of our Q+A here. And keep an eye out for Valenzuela’s election results in November—and what they mean for another kind of representation in Congress.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Overdue donations. Two of the many labs and companies that use HeLa cells—the cancer cells taken from Henrietta Lacks without her permission in 1951—are making donations to a foundation in her name. Neither Lacks nor her family received any compensation for her cells, which became crucial to medical research. Abcam and a lab led by Samara Reck-Peterson at the Howard Hughes Medical Institute are making the donations to the Henrietta Lacks Foundation. Wall Street Journal
- Tick tock, TikTok. After President Trump said he planned to ban the shortform video app TikTok, U.S. general manager Vanessa Pappas was the one to respond on behalf of the company. "We're not planning on going anywhere," she said in a video message on the app. TechCrunch
- Electric power duo. GM is tripling the size of its charging network for electric vehicles, adding 2,700 fast chargers over the next five years. The commitment is a partnership between the automaker led by CEO Mary Barra and EVgo, led by CEO Cathy Zoi. CNN
MOVERS AND SHAKERS: The National Geographic Society named former Colorado College president Jill Tiefenthaler CEO. Notarize hired Santander's Wendy Ivanoski as VP of enterprise strategy. CT3, a teacher training and education leadership organization, promoted Nataki Gregory to CEO.
IN CASE YOU MISSED IT
- Work/life balance. Laura Vanderkam, author of The New Corner Office: How the Most Successful People Work From Home, weighs in on how virtual offices can eat away at employees' mental health in a Fortune op-ed. She has found that people with children—while facing many of the associated pressures—are actually better at putting a hard stop to their workday. Managers should encourage employees without kids to find similar end-of-day commitments to help them log off. Fortune
- Tang's Taiwan. Audrey Tang is the digital minister for Taiwan's government. In February, Tang—a trans woman and the youngest minister in Taiwan's cabinet—developed a system to solve the government's problem distributing masks. Wired
- Ellen's apology. After a BuzzFeed investigation into a reportedly toxic work environment at the daytime talk show Ellen—and a follow-up piece alleging sexual misconduct by executive producers (the subjects of those allegations denied the claims)—Ellen DeGeneres apologized to her staff for failing to live up to a promise to treat everyone "with respect." Fortune
ON MY RADAR
What Beyoncé tells us without saying a word Vulture
Women in hip-hop cannot thrive while misogynoir exists Harper's Bazaar
Last week, Pramila Jayapal became our eviscerator-in-chief Slate
Stacey McGill, the girl who lived Elle
PARTING WORDS
"It's such a neat sisterhood to get into."
-Latosha Stone, founder of Proper Gnar, the first Black woman-owned skateboard company, on the skating community


fortune--2020-08-03--Parents and students plan to spend more on back-to-school shopping this year, according to PayPal

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The upcoming school year—for everyone from preschool through university and graduate programs—is still a top conundrum for government officials, teachers, parents, and students. Approximately only 55% of U.S. K-12 schools and 65% of U.S. colleges having provided tentative reentry plans for the 2020-2021 school year, and many other families are navigating other options, including homeschooling and “pandemic pods” with private tutors.
Exactly what reopening schools is going to look like will vary greatly based on location, class size, and many socio-economic factors. And whatever choice officials or parents make, they’re going to have to spend a lot of money to make it work. Back-to-school shopping has always been a lucrative time of year for retailers, but budgets and necessities are extremely different this fall. The uncertainty around the new school year has parents and students looking for the best ways to prepare for both virtual at-home and in-classroom learning scenarios, which is manifesting itself in several new shopping behaviors.
“Given the uncertainty today, shoppers are planning for the different scenarios: going back to physical classrooms, remote learning, or a mixture of both,” said Susan Schmidt, vice president of PayPal Credit. “This means they are planning to spend money on the usual back-to-school items—apparel, books, school supplies—but also nontraditional back-to-school items, like safety equipment for in-school learning (masks, hand sanitizers, gloves, etc.), as well as more remote learning equipment like printers, laptops, and desks.”
Nearly 70% of U.S. students take out loans to go to college, yet college students are spending nearly double than K-12 parents, according to a new report from PayPal. Courtesy of PayPal
New research from PayPal finds that 40% of parents and 35% college students actually plan to spend more on back-to-school shopping this year. First-year college students, especially, plan to spend 39% more ($732) than the average K-12 parent ($444) on back-to-school shopping this year. But moving to college often requires a lot more equipment and new supplies, from toiletries to technology.
Published Monday, PayPal’s report is based on data collected using an online survey among 1,800 online shoppers across the U.S. in July 2020, including 1,200 parents of K-12 students (600 elementary school; 300 middle school; 300 high school) and 600 college students. The financial services company said quotas were applied to ensure an equal gender split and representation across states.
But everyone will be investing heavily in a new category, at least for students: safety gear. Over 80% of both parents and college students are planning to spend more than they did last year on safety equipment to prepare for school this year. At the same time, both groups plan to spend significantly more on remote learning furniture and home goods as well.
Unsurprisingly, hand sanitizer and disinfecting wipes were the most desired safety items for people surveyed, although wearable gear like face shields didn’t rank as high on back-to-school shopping lists.
Additionally, parents in cities plan to spend more on safety items and remote learning tools than parents in rural areas, indicating that the wider spread of COVID-19 in major cities has a lot to do with their purchasing decisions.
Credit cards are the most preferred payment method for parents who are buying back-to-school items online, but 30% of students are interested in buy now, pay later, or other flexible options. Courtesy of PayPal
Given the ongoing need to social distance as well as economic shutdowns still in place in many regions to combat recent surges of COVID-19 cases this summer, most parents and students are going to be doing their back-to-school shopping online rather than in big box stores that typically cater to this demographic. Approximately 73% of students and 65% of parents anticipate shopping online for their back-to-school needs.
Schmidt pointed toward a July 2020 McKinsey report, which found that 70% of consumers are not comfortable going back to “regular” out-of-home activities. “Shopping is clearly a ‘regular’ out-of-home activity, so parents and students are increasingly shopping online and looking for ways to get creative about budgeting, while retailers seek to come back from slowed sales,” she explained.
One especially interesting finding: PayPal says fathers expect to spend significantly more than mothers ($571 vs. $320, respectively) on their child’s back-to-school shopping. Women are widely identified by retailers for driving greater consumer purchasing power within households. But women —especially women of color—are also being disproportionally affected by the pandemic, from increased responsibilities at home while juggling childcare and virtual learning as well as their own careers at work.
With both parents planning for more at-home learning scenarios, Schmidt explained this meant that dads said they expected to spend more on certain items, with a focus on sports equipment and technology: “This means dads are preparing themselves to make larger ticket item purchases that moms previously may not have focused on.”


fortune--2020-08-04--A running list of companies that have filed for bankruptcy during the coronavirus pandemic

How to safely go to the laundromat during the coronavirus pandemic

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For some, the pandemic was a chance to open a new chapter. But for many businesses, the swift and stark economic shutdown led straight to Chapter 11.
“We are seeing an acceleration in bankruptcies that is unprecedented,” James Hammond, CEO of New Generation Research, which runs BankruptcyData, previously told Fortune.
For 2020, he says, “I’m pretty confident we will see more bankruptcies than in any businessperson’s lifetime.” Ranked by assets alone, says Hammond, the magnitude of bankruptcies this year has already surpassed that of 2008.
Below is a running list of companies that have filed for bankruptcy during the pandemic. We’ll add to this list as more Chapter 11 filings are announced.
Ruby Tuesday
On October 7th the fast casual chain—which has been around since 1972—announced it had filed a voluntary petition for bankruptcy under Chapter 11 of the bankruptcy code. A company press release said that all locations would stay open, and gift cards would remain valid. This announcement does not mean ‘Goodbye, Ruby Tuesday’ but ‘Hello, to a stronger Ruby Tuesday’ the release read.
Sizzler
Marking it’s second tour through Chapter 11, Sizzler filed for bankruptcy on September 21st. In a statement, Sizzler said that “The filing is a direct result of the financial impact the COVID-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement.” Sizzler was originally founded in 1958 by Del and Helen Johnson as the “Sizzler Family Steakhouse” in Culver City, CA. The idea was to bring a fancy steak dinner to the masses at an affordable price (which was, back then, $0.99).
Stein Mart
The off-price retailer never thrived like peers TJX Cos and Ross Stores have, and Stein Mart filed for Chapter 11 protection in August, suggesting it did not have the money to do anything but liquidate entirely.
Virgin Atlantic
Richard Branson’s Virgin Atlantic—which is 49% owned by Delta—filed for Chapter 15 protection in New York on August 4th. Chapter 15 is a slightly different form of bankruptcy protection designed for companies that operate in multiple countries. Though the airline had previously tried to obtain a British government bailout, as well as put together a private rescue package, those efforts were not enough to save the company from bankruptcy.
Lord & Taylor
Though the storied department store traced its roots back to 1826 when its founders launched a dry good store on New York’s Lower East Side, it could not survive the financial strain of COVID. The chain—and its owner, clothing rental startup LeTote—both filed for bankruptcy protection on August 2.
Tailored Brands
The parent company of the Men’s Warehouse and Jos. A. Bank chains filed for Chapter 11 on August 2. As Fortune reported: “The retailer had been facing big challenges before the COVID-19 pandemic, with men increasingly opting for more casual clothing at work and the rising popularity of newer brands and services like Suit Supply. Store closings during lockdowns and millions of men not needing new suits because they’re working from home for now pushed Tailored over the edge. In its most recent quarter, sales fell 60.4% to $287 million.”
Muji U.S.
On July 10, the U.S. subsidiary of Japanese retailer Muji, operated by Ryohin Keikaku Co., announced it would file for Chapter 11 bankruptcy protection. In a statement, the company said it will remain open for business on its website and currently operating retail locations as it begins “constructive discussions with its lenders and other stakeholders regarding the terms of a financial restructuring plan.”
Sur La Table
On July 9, the Seattle company Sur La Table announced that it had filed for bankruptcy and had a buyout offer from Fortress Investment Group LLC. The chain said it planned to sell 70 stores to Fortress, close another 51, and keep operating cooking classes and its web business.
Brooks Brothers
When the world is working from home wearing athleisure, it’s no time to be running an upscale prepster emporium. The storied purveyor of blue blazers and tasteful cardigans—in business since 1818—filed for bankruptcy protection in mid July.
Hertz
The largest Chapter 11 bankruptcy so far has been that of car-rental company Hertz. Unable to hold on after the travel industry effectively hit the brakes, the company is now selling off much of its fleet in a bid to meet demands from creditors.
Chesapeake Energy
On June 28, the huge energy company based in Oklahoma City filed for Chapter 11, a victim of the staggering reduction in demand amidst the global shutdown. The company reported assets and liabilities in the range of $10 billion and $50 billion and more than 100,000 creditors.
NPC International Inc.
The largest franchisee of Pizza Hut restaurants declared bankruptcy on July 1. NPC opened its first Pizza Hut restaurant in 1962 and operates more than 1,225 Pizza Hut and more than 385 Wendy’s stores across the U.S.
Le Pain Quotidien, U.S. arm
Mon dieu! Despite legions of loyal fans who loved the chain’s bread and pricey salads, a prolonged shutdown took a great toll on the company affectionally referred to as “Le Pain Q.” According to Bloomberg, the chain’s sales were already slipping pre-pandemic, with the U.S. arm reporting a nearly $17 million loss on $153 million in sales last year: “The Chapter 11 petition allows Le Pain Quotidien to rework its debts and carry out a sale to Aurify Brands LLC, which requires court approval. Without the sale, the company would’ve had to liquidate its 98 U.S. stores, proposed Chief Restructuring Officer Steven Fleming said in a court declaration.”
GNC
The supplement chain filed for bankruptcy on June 23. As Fortune‘s Phil Wahba wrote, GNC was slammed by yearslong sales declines that made it impossible to meet enormous debt obligations coming due this year.” Indeed, “GNC’s case is the classic tale of a brick-and-mortar retailer getting its e-commerce business going too late. Online sales rose 25% last quarter but were too small of a business to make up for the huge declines in-store.” Oddly, traders still managed to have a field day dodging in and out of shares of the bankrupt company.
Neiman Marcus
On May 7, as Fortune wrote, “the storied Dallas-based luxe purveyor, which also owns New York’s Bergdorf Goodman emporium, filed for Chapter 11 bankruptcy protection in a pre-packaged arrangement with creditors that will significantly lower its debt load. The arrangement should give it more breathing room to weather the global pandemic and rebuild its business.”
J.C. Penney
COVID proved a knockout blow to the chain that was once rivaled only by Sears in terms of size and importance in U.S. retailing. According to Fortune‘s Phil Wahba: “While the company has been struggling for years—net sales in 2019 were $10.7 billion, down from $19.9 billion in 2007—and has failed to reinvent itself enough to keep shoppers despite many turnaround attempts in the last decade, chief executive Jill Soltau suggested the COVID-19 outbreak pushed it over the edge.” In addition to the mid-May filing, Penney said in a news release that it would explore a number of options including selling the company.
J.Crew
Though the beloved purveyor of preppy gear started the year off on a high note with a new CEO and talk of spinning off the well-regarded Madewell brand, it hit a wall as the pandemic descended. As Fortune‘s Phil Wahba wrote, “the mass store closings that the pandemic imposed on mall-based chains like J.Crew and Madewell pushed the highly indebted private-equity owned company over the edge financially.” The company’s May Chapter 11 filing, “will remove the debt albatross from J.Crew Group’s neck by turning it into equity, and give the troubled but still beloved company something it really needs: a clean slate to reinvent itself after years of turmoil.”
CEC Entertainment
What a difference a year makes. Last April, CEC, the parent company of Chuck E. Cheese, was prepping for an IPO. Instead, at the end of June, they entered bankruptcy protection. At the time, the company did not announce plans to close any of the 612 Chuck E. Cheese locations or 122 Peter Piper Pizza restaurants and said that half of its locations had been reopened for dine-in, delivery, carry-out, or parties during certain hours.


fortune--2020-08-04--How Workday made its employees its top priority in the pandemic

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Good morning.
If you want to judge the true tenor of a company, survey its employees. Do that at Workday, and you’ll find a truly exceptional organization. Year after year, the enthusiasm of employees at the cloud-based software company earn it a spot near the top of Fortune’s 100 Best Companies to Work For.
Credit goes to CEO and co-founder Aneel Bhusri, who is this week’s guest on our podcast, Leadership Next (Apple/Spotify). A sign of his approach to business came shortly after the coronavirus hit. Workday was one of the first to send workers home, but it also gave them each a bonus equal to two weeks’ pay, to help deal with extraordinary expenses. “In a crisis, the first thing you do is fall back on core values,” Bhusri says. “And we’ve always had employees as number one.”
Bhusri is a strong advocate of the stakeholder approach to business. “Companies should have a soul,” he says. “I believe in this environment, companies are stepping up to do the right thing”–for employees, for shareholders, for customers, and for their communities. “Companies should have a soul and need to step up in tough times…You see business leaders taking on things that historically governments took on, and they are being quite effective.”
Separately, I’ve written before that one of the heroes of the pandemic is a man who habitually avoids claiming credit–Fed Chairman Jerome Powell. A Wall Street Journal story published yesterday shows his efforts have not only supported the U.S. economy, but the global economy as well. “During two critical mid-March weeks, [the Fed] bought a record $450 billion in Treasuries from investors desperate to raise dollars,” the Journal reported. “By April, the Fed had lent another nearly half a trillion dollars to counterparts overseas.” The little-noticed actions helped ease a global dollar shortage and establish the U.S. central bank as the world’s “lender of last resort.”
While many have commented on the declining influence of the U.S. in the world, when it comes to the world financial system, the U.S.–and the dollar–still reign supreme.
Other news below, including the latest in the battle over TikTok.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
H-1B clampdown
President Trump has signed an executive order barring workers on H-1B visas from replacing American workers on federal contracts. The move marks an escalation of Trump's assault on the program that's designed to bring in high-skilled foreign workers, mostly from India. Fortune
TikTok review
A British lawmaker has called for TikTok to undergo a security review before owner ByteDance can set up a new global headquarters in London, as the Chinese company is rumored to intend (officially, it says only that it's looking for a site outside the U.S.) Neil O'Brien, who co-founded the hawkish China Research Group of Conservative parliamentarians, wants British intelligence to do a "deep dive" into TikTok's code. PS: Beijing is threatening retaliation against Washington if ByteDance is forced to sell TikTok's U.S. operations to Microsoft—a deal which President Trump says he'll approve if the U.S. government gets "a lot of money" from the sale proceeds. BBC
BP loss
BP reported an astonishing, by one measure, $17.7 billion loss for Q2, and has halved its dividend–though it says it will return at least 60% of its spare cash once its balance sheet is back on track. The British energy giant has also fleshed out its net-zero strategy by promising a 40% hydrocarbon production decline by 2030. Wall Street Journal
EasyJet rebound
EasyJet's share price (and that of rival Ryanair) has popped following better-than-expected passenger demand last month. There's context, though: EasyJet ramped up its capacity more slowly than its regional rivals did, so that might partly explain why it found it easier to fill seats. Fortune
AROUND THE WATER COOLER
Fiscal policy
U.S. central bankers have called for increased government intervention to support households and businesses during the pandemic. Chicago Fed president Charles Evans: "The ball is in Congress’ court. Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely." Reuters
Twitter fine
Twitter has warned investors that it could face an up-to-$250 million FTC fine for using people's phone numbers and email addresses–submitted to the company for security purposes–to target ads at them. CNN
Visa insights
Visa CEO Al Kelly says the pandemic has slashed credit-card usage, but debit cards are still holding up. The decline in spending seems to come mostly from higher-income households. Other insights: working from home has gone well for Visa; and digital commerce is good for the company. Fortune
Spanish unemployment
Spain's unemployment figures have dropped (by 2.33%) for the first time since February. That still leaved 3.77 million people out of work, and July's jobless figure was 761,601 higher than a year previously, but the shift nonetheless indicated "a strong recovery in activity," said Labor Minister Yolanda Diaz. Reuters
This edition of CEO Daily was edited by David Meyer.


fortune--2020-08-04--Lost in the mail: How to redesign an election for the pandemic

A running list of companies that have filed for bankruptcy during the coronavirus pandemic

This is the web version of Business By Design, a weekly newsletter exploring design’s transformative influence on industry and enterprise. Sign up to get it delivered free to your inbox.
Good morning, Eamon Barrett here, filling in for Clay Chandler today.
Last Thursday, U.S. President Donald Trump suggested the November election should be postponed until after the pandemic, claiming that an increase in mail-in voting would lead to an increase in voter fraud. There’s no evidence to support Trump’s claim, but there is evidence that an increase in vote-by-mail will strain a system ill-equipped to handle it, creating a new imperative for designers to rethink how the U.S. casts its ballots.
The modern push for electoral redesign arguably began after the 2000 vote and the infamous Floridian “butterfly ballot,” where the names of candidates aligned with the wrong checkbox. Some blame the confusing ballot design for costing Al Gore the election.
The controversy prompted the University of Illinois at Chicago to launch the Voting Experience Redesign Initiative (VERI), which produced new design standards for ballots and voting stations. Since then, other design labs, such as IDEO, have tackled the issue of electoral design too, while the work of VERI, now known as AIGA’s Design for Democracy initiative, continues.
Ballot layouts and booth design are issues of voting apparatus; the pandemic has highlighted problems with the voting process. In the era of social distancing, mail-in voting has become an obvious alternative to standing in line at polling places. In primaries across 16 states since the end of April, mail-in ballots counted for 80% of voter turnout, compared to 12% in 2016.
According to research published last month by MIT, mail-in ballots have a higher likelihood of being unfairly discounted due to errors in processing. In 2016, the report says, 4% of all mail-in ballots for the national election were unfairly excluded, or “lost.”
The report warns that as more states engage in vote-by-mail, the percentage will likely increase as administrators struggle to implement effective systems. New York, for example, allowed votes in its disastrous June primary to be counted so long as the postmark on the returning envelope was dated before the election deadline. The state had issued ballots with prepaid return envelopes—good. However, the postal service usually doesn’t postmark prepaid envelopes and, according to a lawsuit against the primary, thousands of votes in prepaid envelopes were “lost” because they didn’t have a postmark.
That’s just one hitch in vote-by-mail that needs to be ironed out. (Speaking of, in 2008, California delayed its vote count because tens of thousands of postal votes literally needed ironing out—they had been crumpled in the mail and had to be flattened before being fed into the tabulator.)
If the upswing in vote-by-mail continues as expected in November, there are doubts the U.S. postal service and state electoral officials are equipped for the challenge. Preparing them requires funding—to the tune of about $1 billion—as well as effective and efficient system management.
A week from today, on August 11, the Brennan Center For Justice is hosting a talk entitled Bad Ballots and Lost Vote: The Path to Better Ballot Design, that will likely address a lot of these issues. It should be worth tuning into.
More below.
Eamon Barrett
eamon.barrett@fortune.com
NEWS BY DESIGN
In you we trust
Mississippi has received some 3,000 submissions from the public for its new state flag, which you can view here. The commission to redesign the flag will now shortlist a maximum of 225 by August 7, and rank their top ten choices, narrowing it down to a top five by August 14.
GTA
Renault has hired former Peugeot design director Gilles Vidal, likely placing him in charge of managing the automaker’s branding. It’s the second design steal in a week for Renault, which also hired SEAT design director Alejandro Mesonero-Romanos last week.
Doublecheck
WhatsApp is piloting a new feature that allows users to fact check chain messages. As of today, a magnifying glass icon should appear next to messages that have been forward through five or more people. Tapping the icon will prompt WhatsApp to search the web for news related to the message content—the idea being it will snuff out any common conspiracy theories or misleading information.
Space
The U.S. Space Force launched (pun intended) its official logo, which looks like an embossed arrow head with a star in the center. The final design is a reduction of one unveiled by President Trump in late January. The logo has its critics, some of whom compare the design to badges warn by the space crew in Star Trek.
Make happy
Here’s more insight on the trend towards joy in design, which looks primarily at what one U.K. designer has dubbed New London Fabulous—“design and architecture as a visual and cultural pursuit, which is a highly aesthetic, sensual and celebratory of mixed cultures.”
Kansai Yamamoto
Japanese fashion designer Kansai Yamamoto died on July 21 at the age of 76. The designer created stage costumes for megastars Elton John, Lady Gaga and, perhaps most famously, David Bowie, whom Yamamoto outfitted as Aladdin Sane in 1973.
EVENTS BY DESIGN
August
Web design conference Beyond Tellerrand has rescheduled its August event in Berlin to September next year. However, organizers hope their event in Düsseldorf will continue as re-scheduled in November
Copenhagen’s NordDesign festival, with its focus on industrial and product design, will be online this year, August 12-24
The 6th International Conference on Design Creativity will continue as scheduled August 26-28, but will be online rather than in Finland, as initially planned.
September
London Design Festival has decided to go ahead September 12-20, with a stripped-down offline program that will target Londoners much more than international visitors. Other events will be online. The organizers are still figuring out how exactly to proceed.
Design Matters in Copenhagen appears to be carrying on, too, September 23-24, although it is now selling tickets to view a livestream of the event.
QUOTED BY DESIGN
“Being an innovator means that you try things and fail, but you learn and adjust. Our Houses of Innovation try to delve into that commitment that we have.”
Nike’s chief design officer John Hoke discusses the ideal behind the brand’s new flagship store, which opened in Paris last week. The House of Innovation 002 (oddly, Nike’s third House of Innovation) is in a 100-year old building on the prim Champs-Elyseés. The new store is reportedly powered by renewable energy and contains some 85,000 kilograms of “sustainable material.” Flexing Nike’s green credentials, Hoke says 'form follows function' isn’t enough anymore. “Where I’m going is ‘form and function follows footprint’," he says.


fortune--2020-08-04--EasyJet increases flights as passenger demand returns earlier than expected, sending shares skyward

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The aviation sector could use some good news, so here’s a sliver: EasyJet said Tuesday that it saw “higher than expected levels of demand” last month, with 84% of its seats filled. Now it’s planning to further ramp up capacity to 40% this quarter.
The news needs to be seen in context, though: EasyJet—Europe’s fourth-largest airline by passenger numbers—has been more cautious in returning to the skies than other low-cost European airlines, such as Ryanair and Wizz Air, have been.
EasyJet only ramped up to 30% of its total capacity during July, focusing on its most profitable routes. It carried just over 2 million passengers during the month, on 147 routes.
Ryanair, meanwhile, already got back up to 40% capacity during the same month, which may partly explain why it only filled 72% of its seats. Wizz Air also revved up its engines more aggressively, and ended up with a load factor of 60.5%.
Nonetheless, it does seem demand is returning more swiftly than anticipated. (Whether that demand could be called “healthy” is another matter, given how Europeans’ willingness to go abroad for their summer vacations appears to be fueling new COVID-19 surges across the region.)
“I am really encouraged that we have seen higher than expected levels of demand with load factor of 84% in July with destinations like Faro and Nice remaining popular with customers,” said CEO Johan Lundgren in a statement. “Our bookings for the remainder of the summer are performing better than expected and as a result we have decided to expand our schedule over the [current] quarter to fly circa 40% of capacity.”
EasyJet’s share price popped more than 10% on the news, and even Ryanair’s was lifted by 7.3%.
“It’s worth noting that approximately four months ago, there were genuine fears the aviation sector could be out of commission for much of 2020, so the change in sentiment is remarkable,” wrote CMC Markets analyst David Madden in a Tuesday post.
The previous quarter was, of course, not great. EasyJet’s fleet was entirely grounded from the end of March to mid-June, so the only action took place in the last couple weeks of June: 117,000 passengers were carried on a mere 10 planes that had a total capacity of 132,000 seats, creating an impressive-if-not-for-the-context 88.9% load factor.
On the plus side, EasyJet said its customer satisfaction level was up to 80%, which is 13 points above the same period last year. It said this was down to its enhanced bio-security measures, such as disinfecting its craft each day and requiring everyone to weak masks.


fortune--2020-08-04--Workday CEO Aneel Bhusri on wanting workers back in person, and needing to hire more than 3% Black e

Workday CEO Aneel Bhusri on wanting workers back in person, and needing to hire more than 3% Black employees

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The COVID-19 pandemic has caused some big tech companies to embrace remote work permanently. But Workday CEO Aneel Bhusri is eager to get his employees back to the physical office.
“I’m not a believer that having a significant population work from home forever is a great idea. You can’t really develop a great culture,” Bhusri, chief executive and cofounder of the enterprise software company, says on the latest episode of Fortune‘s podcast “Leadership Next.”
“You can execute well, during this time, but you really can’t collaborate and innovate in the same way,” he tells Fortune‘s Alan Murray. “It’s really important that we come up with a model that works for our culture, but also gives some flexibility if people want to work a couple of days a week from home.”
Workday, which makes cloud-based software used by other companies’ human resources and accounting departments, is hoping it can start bringing employees back to its offices in January. That’s a more optimistic outlook than at Google, which last week told employees that they would be working remotely until at least July 2021. But Bhusri acknowledges “if there’s not a viable vaccine by January, we might be very well be in the same position as Google.”
In the remainder of the interview, Murray asks Bhusri about the impact of the ongoing COVID-19 pandemic on Workday’s business and on its stakeholder capitalism. “Companies need to have a soul and need to step up in tough times,” says Bhusri, a member of the Business Roundtable and whose company is ranked fifth on Fortune‘s 2020 list of the 100 Best Companies to Work For.
He also discusses why tech companies—including Workday, where less than 3% of employees are Black—have failed for so long to hire and retain more diverse workforces and how to change that status quo.
“I think in the Bay Area, we all think the world is a meritocracy, and I think there’s some truth to it. I don’t think that’s actually how the rest of the world works out,” Bhusri says. “You really do have to lean in … to really create great career paths for everybody, not just for a few.”


fortune--2020-08-04--Investors catch TikTok mania as global markets climb

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. Strong U.S. manufacturing data and gains in tech stocks on Monday are lifting the global markets today.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are in the green with Japan’s Nikkei up 1.7% .
are in the green with Japan’s Nikkei up . President Trump says TikTok will have to shut down its U.S. operations by Sept. 15 if it doesn’t find a buyer. But he laid down an unusual condition: he wants the U.S. Treasury to get “a substantial” cut from any such deal. Is that how free-market capitalism works?
will have to shut down its U.S. operations by Sept. 15 if it doesn’t find a buyer. But he laid down an unusual condition: he wants the U.S. Treasury to get from any such deal. Is that how free-market capitalism works? Don’t be fooled, says UBS economist Paul Donovan. Paying the government is called—wait for it—a tax. “The random nature of the tax,” he says, “applied almost at whim, adds a risk premium to doing business in the U.S. “
“ Meanwhile, Chinese state media is not happy its beloved TikTok could be be sold to an American tech giant. It’s like “forcibly taking the child out of [TikTok owner] ByteDance’s arms,” one editorial screamed.
Europe
The European bourses were broadly higher with the benchmark Stoxx Europe 600 up 0.7% at the open, before falling.
were broadly higher with the benchmark up at the open, before falling. Shares in BP were up 2% at the open after the energy giant reported a better-than-expected $6.7 billion second quarter loss , and that it would halve its dividend.
at the open after the energy giant reported a better-than-expected , and that it would halve its dividend. EasyJet shares were up 2.8% after the budget airline said it’s seeing brisk air-passenger demand. An impressive 84% of seats were full in July. The news is lifting airline stocks this morning.
U.S.
U.S. futures point to another strong open. That’s after all three indexes started the month in the green.
point to another strong open. That’s after all three indexes started the month in the green. Microsoft‘s shares popped more than 5.6% on Monday as investors got excited about the potential for a Big Tech M&A deal .
on Monday as investors got excited about the potential for a . Investor exuberance over TikTok is doing a good job of distracting away from the impasse in Washington over a stimulus deal. After all, that’s what TikTok is good for: a nice distraction.
is doing a good job of distracting away from the impasse in Washington over After all, that’s what TikTok is good for: a nice distraction. U.S. factory data came in above expectations yesterday showing U.S. manufacturing has been surprisingly resilient in the early stages of the pandemic.
Elsewhere
Gold is up again, hovering around $2,000.
is up again, hovering around $2,000. The dollar is down .
. Energy stocks are trading higher in Europe this morning, but that’s not helping crude. Brent and WTI are in the red.
***
Near-perfect indicator
Wall Street loves esoteric data points, particularly ones that reveal something about investor sentiment. One such indicator is BofA Global Research’s Sell-Side Indicator.
The Sell-Side Indicator is one of five inputs BofA uses to calculate its year-end S&P 500 target. And right now the Sell-Side Indicator is flashing green. By the way, BofA sees the benchmark index climbing roughly another 10% to 3,638 over the next 12 months. So, there’s plenty of legs left in this rally, its equities analysts say.
In fact, the Sell-Side Indicator says equities could climb even higher than 10%. “Historically, when the Sell-Side Indicator has been this low or lower, total returns over the subsequent 12 months have been positive 94% of the time, with median 12-month returns of +20%,” the BofA analysts write.
That’s great news. But what in the blazes is this Sell-Side Indicator?
It’s a gauge that’s contrarian in nature. It measures sentiment from sell-side analysts that tip off when the market is about to go up or down. When the Sell-Side Indicator number drops below a certain level, it usually—and by “usually,” they mean 94% of the time—indicates investors are about to pour into equities and the indexes are set to take off. That 94% track record is why it’s often called a near-perfect indicator.
And this is one of those moments when the indicator is heralding a bullish view on equities. BofA sees this as an opportune time to load up on stocks and hold off on bonds. Why’s that?
“Equity income,” they say, is pretty cheap, “especially relative to bonds. The yield of the S&P 500 is near a 70-yr record multiple of bond yields, and we believe that the bulk of dividend cuts are behind us.”
Not everyone shares this level of bullishness about equities. My inbox is full of warnings from markets pros about a pending lull triggered by cyclical headwinds—namely, traditionally low volumes in August and, further on, Election Day jitters—and worrying COVID data.
So far, the markets of 2020 have told us that the more bullish indicators are the ones that get it right the majority of the time. Yesterday was further proof of that.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Tracking credit in a pandemic. My colleague Adam Lashinsky spoke to Visa CEO Al Kelly, who, were it not for COVID, would have been in Tokyo for the start of the Summer Games right now. Kelly had some interesting observations about the incredible shift in credit/debit spending since the outbreak, with cross-border transactions dropping off a cliff. "Travel is stopped," he noted. And, he says, most of the decline in spending comes from high-income households. There's a lot of interesting data points. You can read more here.
Cuppa joe. Coffee futures linked to Arabica and Robusta beans have fallen precipitously this year as work-from-home ravages demand. According to the Wall Street Journal, this will be the first year of declining coffee consumption since 2011, with a slight rebound next year. Making this commodity trade even worse: a bumper crop of beans this year.
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Market candy
Three out of every four
Mika Manninen, co-founder of dairy-free yogurt brand Hälsa Foods, calculates he's been on the road about 75% of the time in 2020. He's taken 33 flights and has spent 160 nights in hotels in places like Helsinki,London and Los Angeles. So far, no COVID. How does he do it? He gives CNBC an incredibly detailed breakdown of his routine: at the hotel, at the airport, in the plane, in the rental car. Interestingly, he feels safer in a plane than in the airport terminal.


fortune--2020-08-04--Looking for a job in finance? These Fortune 500 banks have the most job openings

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Deutsche Bank is slashing 18,000 jobs, while HSBC will let go of up to 35,000. employees. And Wells Fargo is looking into cost-cutting and layoffs.
Those banks were in trouble before the crisis, so it makes sense they’d be the first to cut during the pandemic. But it’s not all gloom and doom and Wall Street. In fact, many financial firms are still hiring. Which ones? To see where the jobs are, Fortune analyzed job postings for 20 Fortune 500 commercial banks via their LinkedIn profiles.
It turns out Citigroup, ranked No. 31 on the Fortune 500, has the most openings at 4,127. That’s more than JPMorgan Chase (2,048) and Bank of America (1,204), which ranked higher on the Fortune 500 at No. 17 and No. 25, respectively.
Citigroup has faired better than some of its peers during the crisis. Earlier this month it posted better earnings than expected, with its 50 cents earnings per share almost double the anticipated 28 cents. That was driven in a large part by Citigroup’s 68% growth in year-over-year fixed income trading revenue.
Citi is currently in the process of hiring up to 500 high tech workers in the Tampa, FL metro area. And Fortune reported recently that despite the pandemic, the firm plans to offer the majority of its 1,500 interns full-time positions at the end of the summer.
At Wells Fargo (No. 30 on the Fortune 500), while the company plans to trim its 260,000 workforce and reduce its dividend, it is also seeking applications for 2,488 open positions.
How are banks with looming layoffs still hiring?
“They need people in the areas of distressed securities, turnarounds, and bankruptcy,” said Roy Cohen, career coach and author of The Wall Street Professional’s Survival Guide. “That’s where the economy is headed. Banks are hiring for need and anticipated need: Lord & Taylor just declared bankruptcy and retail in general is very fragile … many businesses are teetering on bankruptcy because of the pandemic.”
Cohen has two suggestions for job seekers: First, that they consider looking outside legacy bank roles, and gravitate towards openings that have long-term growth potential, like high-speed algorithmic trading. Secondly, if their resumes have holes, there’s no time like a pandemic to build out one’s resume with in-demand skills such as programming in R or Python.


fortune--2020-08-04--A new executive order escalates Trump’s attack on H-1B visas for foreign workers

Lost in the mail : How to redesign an election for the pandemic

On Monday, U.S. President Donald Trump signed an executive order barring workers on H-1B visas from replacing American workers on federal contracts.
The executive order makes it harder for federal agencies to hire workers in the U.S. on H-1B visas, requiring employers to prove they are not replacing qualified American workers with people from other countries and preventing federal contractors from shifting H-1B workers to other job sites in a manner that would “displace American workers.”
The new order does not represent a significant policy shift but rather escalates Trump’s assault on the U.S.’s H-1B visa program for high-skilled foreign workers, the vast majority of whom are from India. The president has ramped up his criticism of the H-1B program in recent months as the coronavirus pandemic has led to widespread joblessness and decimated the economy on which he’d hung his reelection bid. In June, he ordered a temporarily halt to visas for foreign workers through the end of the year, a moratorium that targeted the H-1B and H-4 visas issued to workers in the tech industry and their families. Monday’s order also made an example of a single organization, the Tennessee Valley Authority or TVA, which had planned to outsource some of its technology contracts to companies with foreign workers.
“H-1Bs should be used for top, highly paid talent to create American jobs, not as inexpensive labor program to destroy American jobs,” Trump said on Monday.
The Tennessee Valley Authority
Monday’s order pilloried the TVA, a federally-owned corporation that generates electricity, aids in flood control efforts, and provides economic development in the southeastern United States. In introducing the new hiring directives, the order cited the TVA’s recent decision to lay off dozens of workers and outsource 20% of its technology jobs to companies based outside the U.S., using H-1B visas
On Monday, Trump fired TVA chairman Skip Thompson, whom Trump appointed to the job, and another member of the TVA board, referencing TVA’s plans. Trump said he was made aware of the TVA case after seeing an ad aired on Fox News by the U.S. Tech Workers, an organization that advocates for U.S. limits on visas for foreign technology workers.
At the White House on Monday, Trump said TVA chief executive Jeff Lyash called to tell him that it had a “strong willingness to reverse course” in its decision to outsource the technology work.
Later, in a statement on Tuesday, the TVA said, it “understands and supports” Trump’s order, and that “all jobs related to TVA’s Information Technology department must be performed in the U.S. by individuals who may legally work in this country.”
Tennessee Sen. Lamar Alexander, a Republican, came to TVA’s defense following Trump’s announcement.
“TVA may have shown poor judgment hiring foreign companies during a pandemic, but, on most counts, it does a very good job of producing large amounts of low-cost, reliable electricity,” Alexander said.
H-1B visas
The U.S.’s H-1B visa program provides a pathway for foreign workers with specialized knowledge to work and reside in the U.S.; it’s favored by U.S. tech giants. In 2019, the U.S. had nearly 400,000 H-1B visa holders and they were predominantly made up of tech workers and Indian citizens. Of the visa holders, 72% were from India and 65% worked in ‘computer-related’ occupations, according to the United States Citizenship and Immigration Services.
Compared to high-tech private employers, the U.S. government is a small beneficiary of H-1B visas but it does still rely on the program. Following a Trump executive order in 2017 to ‘hire American,’ the U.S. Department of Labor conducted a review of private companies and federal contractors to assess their dependence on H-1B visa holders. In 2019, it found that the DOL had issued 2,000 H-1B visas for federal contract work in the first nine months of the year, according to a Bloomberg review of DOL data.
More changes may soon be in the pipeline for the H-1B visa program. Last week, Trump said the White House is working on a merit-based immigration bill. According to new federal proposals, potential changes to the H-1B visa program may include wage requirements for applicants and restricting the ability of visa holders’ spouses to work in the U.S.


fortune--2020-08-04--Beijing says it won’t accept a Microsoft acquisition of TikTok’s U.S. business

China’s government won’t accept an acquisition of TikTok’s U.S. operations by Microsoft Corp. and may take action against Washington if a sale is forced, the Beijing-backed China Daily said in its Tuesday editorial.
It’s Beijing’s strongest defense so far of ByteDance Ltd. and its viral video phenom, which President Donald Trump threatened to ban unless a deal is struck by Sept. 15 to sell TikTok’s U.S. business to Microsoft or another U.S. entity. That process is tantamount to officially sanctioned theft, the Communist Party mouthpiece wrote, echoing prominent Beijing-backed media like the Global Times.
“China will by no means accept the ‘theft’ of a Chinese technology company, and it has plenty of ways to respond if the administration carries out its planned smash and grab,” it said, without specifying options. “With competitiveness now dependent on the ability to collect and use data, it offers an either-or choice of submission or mortal combat in the tech realm.”
ByteDance became the world’s largest startup thanks to the success abroad of TikTok, which American lawmakers accuse of posing a threat to national security by vacuuming up data. Trump now has the power to potentially cripple ByteDance’s prized asset by adding TikTok to the U.S. entity list, which would compel American companies such as Apple Inc. and Alphabet Inc.’s Google to drop the service from their app stores.
The U.S. crackdown has split many in the industry: Some decry the betrayal of values like free speech and capitalism, while others advocate doing whatever it takes to subdue a geopolitical rival and its pivotal tech industry.
Trump repeatedly insisted on Monday that any sale of TikTok’s U.S. operations would have to include a substantial payment to the U.S. That was “open robbery,” tweeted Hu Xijin, editor-in-chief of the Global Times, a tabloid run by the Party’s flagship People’s Daily.
It’s unclear what regulatory measures China could take. The Global Times wrote China has a “limited ability” to protect its companies since the U.S. still enjoys technological superiority. China’s Ministry of Foreign Affairs has previously criticized Washington for employing double standards in trying to ban TikTok. But asked about the latest developments at a regular press briefing Monday, a spokesperson said: “We also don’t comment on the specific business activity of the relevant companies.”


fortune--2020-08-05--The victims of the El Paso terror attack deserve to be remembered

Here ’ s what TikTok may look like if Microsoft buys it

To be on the race beat is to be surrounded by ghosts.
I’ve been thinking a lot about that lately. I’ve been thinking about in the long national conversation we’re now having about talent—about how to hire, keep, and grow the people we need to make sure our companies represent the world—we never mention the ghosts.
They’re everywhere.
The road to the executive suite starts at birth, and that’s exactly when people start dropping out of the pipeline. Maternal and infant health disparities. Unsafe and unhealthy neighborhoods. Inadequate schools and disproportionate treatment of students of color. Inadequate access to health care. Under-resourced and underemployed families. Police violence.
And sometimes, future leaders, creators, innovators, and CEOs get shot dead in a Walmart in El Paso, Texas by a man who hates them just because. Like 15-year-old Javier Rodriguez, a good student who loved soccer. And Jordan Anchondo, 25, and her husband, Andre, who were parents of three children. He owned a small business; they were shopping for school supplies.
I’ve been thinking about all the people who are not being remembered this week, and how quickly they’ve all become ghosts.
The coronavirus pandemic, in its own way, has robbed the El Paso community, Latinx people, and allies around the world of the opportunity to gather in tribute to the 23 people killed and over two dozen injured last year by a man who drove 700 miles out of his way to commit his act of terror.
The City of El Paso had planned a series of memorial events, including hashtag tributes and digital photo walls, but it all seemed to come and go with little mainstream notice.
Of course, it’s also worth noting that the person who made a memorial necessary has also been largely forgotten. He hated immigrants. He feared for the future of the European identity, whatever that is. At the time, experts cited the type of screed he posted online as similar enough to that of other mass murder events—like one left by the man who gunned down 51 people in a mosque in Christchurch, New Zealand—to be evidence of “cascading terrorism.”
Don’t hear much about that these days, either. As long as hate continues to cascade, which it will, we can expect more ghosts.
And shame on us.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On point
SurveyMonkey takes a stand for diversity in their supplier networks This open letter links SurveyMonkey in common cause with companies like 23andMe, Box, and Zoom to spend their money with vendors and professional services providers who take diversity, inclusion, and equity seriously. (Remember, these kind of investments can make a difference.) I’m looking forward to the details, but the intent is on point. “I am looking forward to personally contacting our 20 largest vendors to inform them that investing in diversity, equity, and inclusion will be a requirement for doing business with us,” says SurveyMonkey CEO Zander Lurie in the letter. All vendors will be asked to take a workplace diversity survey, and be asked to commit to benchmarks and improvements. Curious about what you think. SurveyMonkey
Michele Meyer-Shipp is MLB’s new chief people and culture officer I say this unreservedly: Meyer-Shipp, most recently KPMG’s diversity chief, is one of the most dedicated and impactful diversity professionals I’ve ever observed in the field. And now, she’s in an even bigger league. Her new role encompasses all of human resources, from talent to culture. Baseball has a vital place in popular culture, and I expect her influence to be felt in the lives of fans, alumni, and communities big and small. Root, root, rooting for you, Ms. Meyer-Shipp.
CNBC
Will Silicon Valley ever think differently about diversity? Bloomberg’s Shelly Banjo and Dina Bass start this piece with the single most vexing issue about the enduring whiteness of tech: They espoused utopia, inherited none of the built-in barriers about race and status, and yet...here we are: They've just built a bigger version of the same systemic trap, at scale. What follows is the story of that failure, with up-to-date numbers and fresh anecdotes about lack of advancement, biased cultures and the growing problem of Black and Latinx attrition. And the latest twist—global crisis. Will the pandemic put diversity efforts on hold? Aubrey Blanche, the former diversity head at Atlassian Corp, sums up the tension. “They’re trying to solve 400 years of structural oppression and, ‘Oh, by the way, they need to hit their target at the end of the quarter.’”
Bloomberg
On background
World, meet Linda Diaz This song will set you right. Diaz is a Brooklyn-based (LES-raised) singer-songwriter who is getting a well-deserved moment in the spotlight as the winner of NPR Music’s 2020 Tiny Desk Contest. She won for her song “Green Tea Ice Cream,” in which she celebrates the moments that bring her joy in a world that is too much grind and too few tender moments. “Do you even know what you’re working toward?” she asks. “Slow down…you’re burning out.” Congrats to Diaz and her most excellent band. Enjoy.
NPR
Can a curriculum save the community? I stumbled on the Chicago Unheard blog, written by teachers, parents, students and anyone with a stake in the success of the Chicago Public School system. In one essay, Ashley McCall asked a series of questions that stoked my own imagination: What if Chicago designed a school year specifically to address the recovery? What if CPS “courageously liberated itself from narrow and rigid quantitative measures of intelligence that have colonized the education space for generations, and instead blazed a trail for reimagining what qualifies as valuable knowledge?” And that’s where things got interesting. Anyone worried about students or school systems, this one’s for you. (That probably should be everybody.)
Chicago Unheard
Remembering Operation Wetback Yes, that was its real name. It was the response to a guest worker program gone wrong, a product of the Eisenhower administration’s attempt to bring some sort of relief to the abuse experienced by Mexican farm laborers, which included mass deportations and mob violence throughout the Great Depression. By the 1950s, Anti-Mexican sentiment and violence grew to a fever pitch, fueled in part by fears that every laborer was a Communist in disguise. In the go-to book on the operation, Impossible Subjects, historian Mae Ngai describes deportation ships that were later compared in Congressional reports to “eighteenth century slave ship[s]” and “penal hell ship[s].” It was horrific. “Some 88 ‘braceros’ died of sun stroke as a result of a round-up that had taken place in 112-degree heat,” she writes.
Fortune
This edition of raceAhead was edited by Karen Yuan.
Today's mood board
Maybe hats will come back, too. (Mood board courtesy of Jessica Helfand.)


fortune--2020-08-04--Ex-Uber exec gets 18-month prison term for trade theft from Google

Autonomous driving engineer Anthony Levandowski was ordered to spend 18 months prison for stealing trade secrets from Google as he defected to Uber Technologies Inc., in one of the highest-profile criminal cases to hit Silicon Valley.
U.S. District Judge William Alsup in San Francisco imposed the sentence Tuesday after Levandowski pleaded for mercy and prosecutors urged jail time as a deterrent for “brazen and shocking” conduct.
The engineer’s downfall is a saga of avarice and betrayal that left all involved looking bad.
“This was the most-watched, highest-visibility trade secrets case in a long, long time,” said Jim Pooley, a dean of trade secrets law in the Valley.
It was compelling, he said, because as a leader of cutting-edge technology, Levandowski moved between powerful competitors “in a way that was both spectacular and secretive at the same time,” and “with hundreds of millions of dollars being thrown around.”
“Nobody came out of this looking especially terrific,” Pooley said.
The engineer’s guilty plea leaves him a bankrupted convicted felon. His last few years of courtroom battles, he said in a letter to Alsup, have been a “grueling lesson in humility.” Levandowski had asked for a sentence of home confinement due to Covid-19 infections in prisons that he said could amount to a “death sentence.”
Alsup oversaw the civil suit that Alphabet Inc.’s driverless car unit, Waymo, brought against Uber in 2017 alleging the ride-hailing company profited from Levandowski’s theft of secrets when it recruited him away from Alphabet’s Google a year earlier. Almost a full year before the suit settled at trial, Alsup recommended prosecutors criminally investigate Levandowski. He was indicted a year ago.
During Levandowski’s years at Google, the company heaped unprecedented sums on the engineer, including a $120 million bonus –- only to claw it all back, and more, in a bruising civil arbitration over his defection that drove him into bankruptcy.
Waymo’s civil suit produced evidence that Uber’s shunned former chief Travis Kalanick duped his company’s board in order to lure Levandowski away from Google with a $680 million acquisition of his company, Ottomotto. The stock-based deal never paid out, and the cloak-and-dagger move detailed in emails and testimony ultimately ended with Uber firing Levandowski and later abandoning the legal cover it promised him against Google’s anticipated reprisal.
Levandowski, in a court filing, urged the judge to resist the “sinister narrative” that he stole secrets worth billions of dollars to enrich himself and Uber –- for which he was pilloried in the media.
Of the 33 counts he was charged with, Levandowski argued his sentencing should be narrowly focused on the single trade-secret theft count to which he pleaded guilty: downloading Google files that included details about its driverless program’s goals, metrics, and challenges the company faced and overcame.
The U.S. argued Levandowski’s negotiations with Uber and his defection from Google provide important context. Prosecutors are saying “all these other things were dubious if not outright criminal as well,” said Eric Goldman, a professor at Santa Clara University’s law school. “The government’s position is that’s absolutely fair game to show this is his nature.”
“In the abstract, I think it’s unconscionable that Levandowski doesn’t serve prison time for what he did — he created so many challenges for so many people because of his own self-interest,” Goldman said. But the professor also expressed sympathy for Levandowski’s concerns about the coronavirus threat in prison. “He shouldn’t suffer a major health crisis, or death, from the virus as part of the punishment –- that’s not proportionate to his crime.”
When Waymo sued Uber more than three years ago, both sides pounded the courtroom podium with urgent arguments about how Levandowski might propel or hobble their position in the nascent driverless car market. Today, the only paid-for driverless rides in the U.S. are in Waymo cars in Phoenix. Uber’s driverless unit, Advanced Technologies Group, hasn’t set a date for providing self-driving cars on its network.
Levandowski, meanwhile, has started a new company, Pronto, which makes safety systems for trucks -– without relying on lidar, the technology at issue in Waymo’s suit against Uber that helps autonomous vehicles see their surroundings. In his letter to Alsup, the engineer asked for a sentence that would help him continue “advancing the world through technology.”
“We’ve seen so many people in Silicon Valley resurrect their reputation after what we thought would be career-ending moves,” Goldman said. “It might take him a little time, but the Valley has a short memory of prior sins for people who can deliver high value.”