C2 THURSDAY, OCTOBER 31, 2019 LATIMES.COM/BUSINESS
BUSINESS BEAT
Tesla Inc. Chief Execu-
tive Elon Musk said he
shifted resources from the
solar company he bought
three years ago to save his
electric-car company from
bankruptcy while it was
ramping up production of
the Model 3.
Musk made the admis-
sion as part of a lawsuit filed
by Tesla investors over the
company’s 2016 buyout of
SolarCity, a solar panel in-
staller. Disgruntled share-
holders contend Tesla direc-
tors rolled over when Musk
pushed to buy the renew-
able-energy company. Musk
was SolarCity’s chairman
and largest shareholder at
the time and his cousin was
the chief executive.
“If I did not take everyone
off of solar and focus them on
the Model 3 program to the
detriment of solar, then
Tesla would have gone bank-
rupt,” Musk said in a June
pretrial deposition made
public in state court in Dela-
ware. “So I took everyone
from solar, and said: ‘instead
of working on solar, you need
to work on the Model 3 pro-
gram.’ And as a result, solar
suffered, as you would ex-
pect.”
Pension funds opposing
the SolarCity buyout say in
court papers that Musk
should have told them that
Tesla was in no condition in
2016 to buy a $2-billion
company and that it would
be forced to rely on that
firm’s manpower to keep
Tesla afloat.
Tesla now has roughly
400,000 solar customers, one
of the nation’s biggest re-
newable-energy portfolios.
But Walmart Inc. sued Tesla
in August, saying the com-
pany’s rooftop systems
caused fires at its stores and
warehouses. Tesla has also
reached out to homeowners
across the U.S. to tell them
their solar systems need pre-
ventive maintenance.
Tesla’s rooftop solar
business rose for the first
time in a year, the company
said during its earnings re-
port Oct. 23. Tesla deployed
43 megawatts of solar in the
third quarter, up 48% from
the previous three months.
In its earnings report last
week, the electric-car maker
said it earned $1.86 a share,
surprising Wall Street. Musk
delivered several positive
updates: The company’s
new factory in China is on
track and the Model Y cross-
over SUV will launch earlier
than expected. Tesla shares,
which had languished for
much of 2019, closed Tuesday
at $316.22 and are down just
3.5% for the year.
Musk acknowledged in
the June 1 deposition — un-
sealed Friday — that he
probably wouldn’t support
the SolarCity acquisition
again given the stress Tesla
faced from the Model 3 push.
“At the time I thought it
made strategic sense forTesla and SolarCity to com-
bine. Hindsight is 20/20,” he
said. “And if I could wind
back the clock, you know, I
would say probably would
have let SolarCity execute by
itself; would have let Tesla
execute by itself.”
“But I just didn’t realize
how difficult it would be to
do the Model 3 program,”
Musk added. “And so that
was just a big distraction
and sort of offset a lot of
things by more than a year,
year and a half maybe.”
To deal with that internal
stress, Musk said, scores of
SolarCity employees — from
engineering, management,
sales and service — were
transferred to the Model 3,
the first electric car Tesla
sought to produce in high
volume. Some of the So-
larCity workers were de-
ployed to Tesla’s retail
stores and delivered cars to
customers, according to
Musk’s deposition.
Tesla delivered a record
97,000 vehicles in the third
quarter and the company’s
surprise profit gives the
company some breathing
room. Executives have be-
gun talking up the energyside of its business again.
On Friday, Musk held a
conference call focused on
“Version 3” of the company’s
solar roof product, which
was first revealed three
years ago. “It’s been quite
hard,” Musk said. “Roofs
need to last a long time.
When you add electrification
to the roof, it’s a fair bit of
complexity.”
The 48-year-old Musk,
who has had his share of run-
ins with lawyers over the
years, got combative with
Randy Baron, a California-
based lawyer for Tesla
shareholders challenging
the wisdom of the SolarCity
acquisition. They’ve sued
the company’s board in Del-
aware Chancery Court.
At one point, Musk called
Baron “reprehensible” be-
cause the lawyer — accord-
ing to the Tesla CEO — ques-
tioned whether SolarCity
was a viable entity and the
validity of sustainable ener-
gy as a whole.
“You seem like a very,
very bad person,” Musk said
in the deposition.Feeley and Hull write for
Bloomberg.Solar staff diverted to save Tesla
“IF I DIDnot take everyone off of solar and focus them on the Model 3 program
to the detriment of solar, then Tesla would have gone bankrupt,” Tesla’s CEO said.Robert GourleyLos Angeles TimesMusk shifted firm’s
resources to avoid
bankruptcy, he says.
By Jef Feeley
and Dana Hull
Faced with layoffs and
damaged morale over the
handling of the network’s re-
porting on Harvey Wein-
stein, NBC News Digital em-
ployees have agreed to
unionize.
About 150 editorial em-
ployees within the compa-
ny’s digital unit announced
Wednesday that they had
joined the NewsGuild of New
York, which represents
nearly 3,500 media profes-
sionals in the New York City
area. The unit is part of the
larger 20,000-member News-
Guild-CWA, which repre-
sents news professionals
across the U.S. and Canada,
including the Los Angeles
Times.
The union organization
effort has been underway at
NBC News Digital for more
than a year as employees
have sought to address is-
sues of staffing, diversity
and job protections. NBC
News Digital employees
learned Tuesday that about
a dozen employees in the
area’s production studio
would be laid off as part of a
restructuring. The company
is adding 70 digital employ-
ees overall in the restructur-
ing plan as the streaming vi-
deo service NBC News Now
expands.
Chris Berend, executive
vice president of digital for
NBC News Group, said in a
memo that the request to
recognize the union would
be addressed quickly.
“We are deeply commit-
ted to a fair and healthy
workplace for all our em-
ployees,” Berend said. “We
welcome this dialogue from
within our digital organiza-
tion, and any constructive
conversation aimed at
building the future of NBC
News Digital and ensuring
that we’re the best we can
be.”
In his note, Berend did
not comment on the mission
statement released by the
employees, which cites the
issues raised in former NBC
News correspondent Ronan
Farrow’s book “Catch and
Kill” regarding the network’s
decision not to run his re-
porting on alleged sexual as-
sault and harassment by
Weinstein. The book asserts
that the story, which went on
to win a Pulitzer Prize for
Farrow, was held back at
NBC because news division
executives feared that har-
assment issues regarding
former “Today” co-host
Matt Lauer would be ex-
posed.
“Recent weeks have high-
lighted serious questions as
to how NBC News has han-
dled incidents of sexual mis-conduct in the workplace as
well as the opaque processes
and procedures for report-
ing on and exposing power-
ful predators,” the state-
ment read. “NBC News re-
peatedly refused calls for an
independent review on both
counts despite numerous
such requests from staff.
This lack of transparency
and NBC News’ troubling
trend of passing on stories
which investigate the power-
ful ultimately harm our cred-
ibility as journalists.”
NBC News has denied
Farrow’s allegations regard-
ing his Weinstein reporting,
saying his story did not air
because he failed to get a vic-
tim or witness on the record.
Farrow took his reporting to
the New Yorker, where it was
published in October 2017.
Farrow’s book revealed
that Brooke Nevils, the for-mer “Today” employee who
filed the complaint that led
to the November 2017 firing
of Lauer, said she was raped
by the star anchor when they
worked together at the 2014
Winter Olympics in Sochi,
Russia. NBC News execu-
tives have been under fire for
not revealing the charge to
staff when Lauer was fired.
NBC News also has main-
tained that no formal har-
assment complaints were
filed against Lauer before
Nevils contacted human re-
sources. Lauer, the biggest
star at NBC News at the
time, was terminated im-
mediately.
Following Lauer’s firing,
NBC News conducted an in-
ternal investigation and
stated a commitment to im-
prove the mechanisms for
reporting sexual harass-
ment within the company.The company has been criti-
cized for not using outside
counsel to review the matter,
as CBS and Fox did when
dealing with their harass-
ment scandals.
While NBC News execu-
tives have disputed Farrow’s
book, which it has described
as a “smear,” the issues
raised have caused a genera-
tional divide within the divi-
sion, creating an ongoing
public relations headache
for the network.
Younger staff members
— who make up the vast ma-
jority of the staff in NBC
News Digital — are said to be
angry with NBC News Presi-
dent Noah Oppenheim, who
is portrayed in the book as
discouraging Farrow’s ef-
forts to report the Weinstein
story.
Senior staff members —
including many veteran fe-male anchors and executive
producers at NBC News —
have been supportive of Op-
penheim. He also has the
backing of NBCUniversal
President Steve Burke.
On Friday, NBC News
executives were subjected to
criticism from MSNBC an-
chor Rachael Maddow, who
had Farrow on her program
to discuss the book.
“The allegations about
the behavior of Harvey We-
instein and Matt Lauer are
gut-wrenching at baseline,
no matter who you are or
what your connection is to
this story,” Maddow told
viewers. “But accusations
that people in positions of
authority in this building
may have been complicit in
some way of shielding those
guys from accountability,
those accusations are very,
very hard to stomach.”NBC News unit’s workers unionize
NBC NEWShas denied claims that it blocked a story on Harvey Weinstein over concerns about “Today” show co-host Matt Lauer.Mary AltafferAssociated PressThe digital division’s
move comes amid
layoffs and a hit to
morale over handling
of Weinstein story.
By Stephen Battaglio
A Juul Labs executive
who was fired this year is al-
leging that the vaping com-
pany knowingly shipped 1
million tainted nicotine
pods to customers.
The allegation comes in a
lawsuit filed Tuesday by law-
yers representing Siddharth
Breja, a former finance exe-
cutive at the e-cigarette gi-
ant. The suit claims that
Breja was terminated after
opposing company prac-
tices such as shipping con-
taminated flavored pods
and not listing expiration
dates on Juul products.
The lawsuit does not
specify the contamination
issue or how it occurred.
Lawyers for Breja declined
to elaborate on the issue
Wednesday.
A Juul spokesman said in
a statement that the claims
are “baseless” and that
Breja was terminated be-
cause he failed to “demon-
strate the leadership quali-
ties” required for the job.
Juul, the top-selling e-cigarette brand in the
United States, has been be-
sieged by criticism amid an
explosion of underage vap-
ing. The company faces mul-
tiple investigations by fed-
eral and state officials as well
as lawsuits by families of
teenagers who say they be-
came hooked on nicotine
through the company’s
vapes.
Breja worked in Juul’s
global finance department
less than 10 months. The
lawsuit, filed in the Northern
District of California, seeks
damages for lost salary, bo-
nuses and Juul stock, which
it values at more than $
million.
BuzzFeed News first re-
ported on the lawsuit.
Breja describes a “reck-
less” and “win-at-all-costs”
culture at Juul, primarily
driven by the company’s for-
mer chief executive, Kevin
Burns, who was replaced in a
management shake-up in
September.
Breja says he learned in
March that some batches of
nicotine solution used in the
company’s mint-flavored
pods had been contam-
inated. Breja claims that
company management
shipped roughly 1 million
pods affected by the issue
and failed to issue a recall or
public announcement.Juul pods tainted,
fired exec alleges
THE FIRED executive said some batches of nicotine
solution in mint pods had been contaminated.Scott OlsonGetty ImagesA lawsuit says the
company knowingly
shipped 1 million
contaminated units.
associated press