Los Angeles Times - 07.03.2020

C2 SATURDAY, MARCH 7, 2020 LATIMES.COM/BUSINESS

BUSINESS BEAT

For years, Tesla Inc. has
rebutted concerns about
worker safety at its main as-
sembly plant by describing
reviews from a California
regulator as vindication.
But new documents and
statements from the agency
contradict those claims.
Tesla omitted hundreds of
injuries that the electric-car
maker listed in logs at its fac-
tory from annual summary
data that the company
sends to the government, ac-
cording to a memorandum
the state’s workplace-safety
agency sent in December.
The California Division of
Occupational Safety and
Health, or Cal/OSHA, also
hit Tesla with a citation that
month for failing to properly
record other injuries in its
logs since 2015.
The documents, some of
which were obtained
through a public records re-
quest, undermine state-
ments Tesla executives have
made about its plant in Fre-
mont in the San Francisco
Bay Area.
Chief Executive Elon
Musk dedicated a portion of
an October 2018 earnings call
to briefing investors about
workplace safety efforts. He
said Cal/OSHA had investi-

gated the company and con-

cluded it had not been

underreporting injuries.

Last month, Tesla said a re-

view by the agency showed

that the company’s record

keeping was 99% accurate.

But Cal/OSHA wasn’t fo-

cused on verifying the over-

all accuracy of Tesla’s injury

record-keeping when it in-

spected the company in 2018,

according to spokesman

Frank Polizzi. The agency

also can’t verify the claim

that Laurie Shelby, Tesla’s

environmental, health and

safety vice president, made

in the February blog post.

Tesla didn’t respond to

requests for comment.

Workplace safety at Tesla

faded from the headlines as

the company emerged from

“production hell,” Musk par-

lance for the period when he

struggled to ramp up manu-

facturing of the Model 3

sedan. But the Cal/OSHA

documents suggest the car-

maker overstated the

strides it was making in im-

proving injury rates after re-

ports by the Center for In-

vestigative Reporting and

others called attention to

the issue.

Government officials rely

on accurate summary data

from companies to deter-

mine which workplaces need

the closest scrutiny, said

Deborah Berkowitz, the for-

mer chief of staff for the U.S.

Occupational Safety and

Health Administration.

“If companies don’t re-

port accurately, it has really

an impact on where the

agency ends up using its

scarce resources,” said

Berkowitz, who directs the

worker safety and health

program at the National

Employment Law Project, a

pro-labor nonprofit. “It’s

very important to the

agency that the summary

data be accurate so that it

doesn’t portray a workplace

that’s safer than it really is.”

In retrospect, Tesla’s

handling of the workplace

safety scrutiny appears sim-

ilar to how it dealt with a Na-

tional Highway Traffic Safe-

ty Administration investiga-

tion into its Autopilot fea-

ture in 2017. The agency

concluded that the driver-

assistance system wasn’t

defective and didn’t need to

be recalled — partly based

on a finding that Teslas with

Autopilot installed were

crashing 40% less than Tes-

las without it.

But a study last year con-

cluded that the data Tesla

handed over to NHTSA were

incomplete or contradictory.

The agency has said it

stands by the finding.

In its December memo-

randum, Cal/OSHA said the

2018 summary data Tesla

provided to the government

was missing roughly three

dozen incidents that were

listed in its logs, or 4% of the

total. For 2016, 44% of the in-

cidents weren’t included.

The $400 citation Cal/

OSHA issued that month

was for 14 injuries or illnesses

that the agency said Tesla

failed to properly record in

its logs. Four of those oc-

curred in 2019, and the others

were between 2015 and 2018.

Tesla is appealing the cita-

tion, and the agency said it’s

reviewing additional evi-

dence the company has pro-

vided.

Cal/OSHA said in its De-

cember memorandum that

disparities sometimes arise

when companies learn

about incidents and add

them to their injury logs af-

ter they’ve sent their sum-

mary to the government.

But the agency said that

when there are “significant

numerical disparities,” a

company should consider

whether its processes are

“adequate to verify accu-

racy.”

The government uses the

annual summary logs to cal-

culate total work-related in-

jury and illness rates, mea-

sured as the number of inci-

dents per year per 100 full-

time employees.

For 2018, the Bureau of

Labor Statistics said the

overall rate for automobile

manufacturing was 6.1. The

figures Tesla reported on its

summary log for 2018 add up

to a rate of 6.2. Including the

additional 36 incidents that

Cal/OSHA says were omit-

ted would raise Tesla’s rate

to 6.5.

Tesla’s Fremont plant

produces the Model S, X and

3 vehicles and is starting to

build the crossover Model Y.

The company also has a fac-

tory near Shanghai.

Eidelson and Hull write for

Bloomberg.

EMPLOYEESKenneth Reed II and Erik Garcia work on a Model 3 in Tesla’s Fremont, Calif., plant in 2018.

Mason TrincaFor the Washington Post

Tesla’s safety data in doubt

Some work injuries

were omitted from

reports sent to state.

By Josh Eidelson
and Dana Hull

The Chinese owner of

Grindr, the world’s most

popular gay dating app, has

reached a deal to sell the

platform a year after U.S.

regulators forced the com-

pany into a disposal because

of national security con-

cerns.

Beijing Kunlun Tech, a

gaming company, an-

nounced on Friday in a stock

exchange filing that it had

agreed to sell Grindr to San

Vicente Acquisition for

about $608.5 million.

The deal brings to an end

a year of uncertainty over

the ownership of Grindr and

highlights U.S. concern over

the threat of Beijing using

sensitive data harvested by

its tech companies against

U.S. citizens. U.S. regulators

are still investigating Tik-

Tok, the Chinese short-vi-

deo app, on similar grounds.

After acquiring the plat-

form in a series of purchases

starting in 2016, Kunlun an-

nounced a plan to list the

unit in 2018. But that was

scuppered by the Commit-

tee on Foreign Investment in

the United States, the gov-

ernment’s investment

watchdog, which last year

forced Kunlun to sell Grindr.

Kunlun said it signed a “na-

tional security agreement”

with CFIUS to dispose of the

unit by the end of June 2020.

The watchdog feared the

Chinese government could

use personal data given to

the app by its 3.3 million

users to blackmail U.S. citi-

zens — for example, over

their sexual orientation or

HIV status. Grindr’s users

may include U.S. officials

and military personnel. In

response, Kunlun had prom-

ised it would not transfer

sensitive data from Grindr

to China and that it would

stop its operations there,

keeping its headquarters in

the U.S.

Last year, Kunlun looked

set to revisit its old plans to

list the company after

CFIUS dropped its opposi-

tion. The agency’s interven-

tion in 2019 was a rare in-

stance of a retrospective

veto of a deal that had been

completed, coming three

years after Kunlun had first

acquired its majority stake

in Grindr.

The valuation of the dat-

ing app has quadrupled in

the last four years, from the

$151 million implied by Kun-

lun’s first purchase of a

61.53% stake in the company

in 2016.

The sale of Grindr has the

blessing of CFIUS, accord-

ing to two people briefed

about the matter, and

should be considered a done

deal, although it will still

need to be technically as-

sessed by the committee.

It took months to get the

U.S. government agencies

that constitute CFIUS,

which include the Treasury

and the departments of De-

fense, State, Commerce and

Homeland Security, to agree

to the terms of the deal.

Several members of Con-

gress, from both the Repub-

lican and Democratic sides,

also put pressure on the for-

eign investment committee

to make sure that adequate

guarantees had been made

as part of the sale.

© The Financial Times Ltd.

2020. All rights reserved. FT
      and Financial Times are
      trademarks of the Financial
      Times Ltd. Not to be
      redistributed, copied or
      modified in any way.

Chinese owner to

sell gay dating app

U.S. had cited security

issues in demanding

the sale of Grindr.

By Yuan Yang and

James Fontanella-Khan

GRINDR is being sold because of U.S. concerns that

Beijing could use its sensitive data to blackmail users.

Tyler O’NeillDreamstime

Hiring in the United
States jumped in February
as employers added 273,
positions, evidence that the
job market was in strong
shape before the co-
ronavirus outbreak began to
sweep through the nation.
The Labor Department
said Friday that the unem-
ployment rate fell to 3.5%
last month, matching a 50-
year low, down from 3.6% in
January.
The monthly job gain
comes from a survey of pay-
rolls done the second week of
February, before the viral
outbreak gained momen-
tum in the U.S. Still, many
economists were encour-
aged by the message that
the jobs report sent about
the economy’s health before
the disease.
“The U.S. economy
clearly approached the
COVID-19 shock with a head
of steam, which is good
news,” said Neil Dutta, an
economist at investment
strategy firm Renaissance
Macro Research.
“You want to be in a posi-
tion of strength when a crisis
hits.”
So far, there are few signs
that the job market has been
affected by the disease, but
most economists expect hir-
ing to slow in the coming

months.

Companies are restric-

ting business travel, facto-

ries are facing supply

disruptions from manufac-

turing shutdowns in China,

and some Americans are de-

laying vacations.

“The outbreak will likely

lead [businesses] to post-

pone some hiring plans or

even shed jobs if the situa-

tion worsens,” said Lydia

Boussour, senior U.S. econo-

mist at Oxford Economics.

Wage growth slowed

slightly in February, rising

3% compared with a year

earlier, down from a 3.1%

year-over-year average gain

in January. Paychecks have

grown at a 3% pace or higher

for more than a year-and-a-

half but have slowed since

reaching a 3.5% pace last

summer.

The government on Fri-

day also upgraded its esti-

mate of job growth in De-

cember and January by a

combined 85,000 more than

it had previously reported.

Over the last three months,

U.S. employers have added

243,000 jobs — the best quar-

terly pace since September

2 016.

Unseasonably warm

weather in February likely

boosted hiring in the con-

struction industry, which

gained 42,000 jobs, and ho-

tels and restaurants, which

gained nearly 50,000.

Manufacturing added

15,000, reversing a sharp loss

in January. The gain might

not be replicated in the com-

ing months because of sup-

ply-chain disruptions in

China. Last month’s totals

include 7,000 temporary

Census jobs that were cre-

ated to help compile the 2020

count.

Tom Gimbel, chief execu-

tive of the LaSalle Network,

a Chicago-based employ-

ment agency, said that so far,

his clients haven’t cut back

on hiring. Nor are they can-

celing job interviews, he

said, as some did in the run-

up to past recessions.

“Some clients got a little

nervous and moved to video

interviews, but job candi-

dates were still willing to

come in face to face,” he said.

If employers were to start

slashing jobs as a conse-

quence of the virus, it could

significantly escalate the

economic damage. For that

reason, a range of job market

barometers will provide

some of the most vital sig-

nals about how the economy

is withstanding the virus’

impact.

Widespread layoffs can

transform slowdowns in just

one or two sectors — the

travel industry, say, or man-

ufacturing — into a full-

blown downturn for the

overall economy.

When workers lose jobs

and pay, they typically cut

spending.

Their friends and rela-

tives who are still employed

grow anxious about their

own jobs and wary of spend-

ing freely, a cycle that can

trigger further job cuts.

So long as monthly job

gains remain above 100,

or so, the unemployment

rate should stay low and the

economy may be able to

avoid a downturn.

If the monthly pace sinks

below that level for a sus-

tained period, joblessness

would likely rise.

Pre-virus job market is strong

ECONOMISTS were encouraged by the message

that the jobs report sent about the economy’s health.

Wilfredo LeeAssociated Press

February figures are

from before outbreak

gained momentum.

associated press

The federal government

looks increasingly likely to

take over the United Auto

Workers, with the U.S. attor-

ney leading a years-long

criminal investigation of the

union citing “systemic”

corruption and one of its top

leaders sounding resigned

to the prospect.

Hours after filing crimi-

nal charges against Gary

Jones, who stepped down as

UAW president after being

implicated in the scandal,

U.S. Atty. Matt Schneider re-

iterated that federal over-

sight of the union is a pos-

sibility.

Federal prosecutors only

recently stepped aside after

being involved in managing

the International Brother-

hood of Teamsters for 30

years.

“We have a systemic

problem within the union,”

Schneider said of the UAW.

“We have systemic corrup-

tion within the union and

that is why we aren’t taking

oversight off the table. If it

worked for the Teamsters,

maybe it could work here.”

Cindy Estrada, a UAW

vice president, countered

that the union has taken

measures to prevent abuses,

such as adding an ombuds-

man and ethics officer. When

asked about the prospect of

prolonged government over-

sight, she said that decision

was out of the union’s hands.

Prosecutors charged

Jones on Thursday with con-

spiring with other union offi-

cers to embezzle more than

$1 million that they spent on

lavish vacations, high-end li-

quor and cigars.

He resigned in Novem-

ber, months after federal

agents raided his Detroit-

area home, and is now the

most prominent figure to go

down in a scandal that has

resulted in more than a doz-

en convictions of UAW or De-

troit automaker leaders.

A lawyer for Jones de-

clined to comment.

The union announced a

seven-point plan of ethics re-

forms after Jones stepped

down, but prosecutors

panned the move as inade-

quate. The UAW then said it

would eliminate the regional

office that Jones headed be-

fore becoming president and

that is alleged by prose-

cutors to have been the epi-

center of schemes involving

bribery, misuse of funds and

kickbacks.

Federal officials have not

specified what actions they

seek from the UAW but have

hinted they may charge the

union with violating the

Racketeer Influenced and

Corrupt Organizations Act.

Coppola and Welch write for

Bloomberg.

Embezzling scandal

could steer UAW

into a U.S. takeover

By Gabrielle Coppola

and David Welch