Good morning! It’s Tuesday, May 14, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Tesla Is Using Ad Money To Secure Musk’s $55 Billion Pay Pack
For some reason, Elon Musk decided that his work at Tesla was worth an eye-watering $55 billion in a move that would see him become one of the best-paid executives across the auto industry. However, the pay pack was blocked by the courts last year and since then Musk has been doing everything he can to try and get it approved, including using Tesla’s advertising budget to promote it.
Tesla has reportedly funneled funding that should be used to promote its cars to buy adverts that aim to encourage shareholders to vote in favor of Musk’s pay packet, reports Electrek. The adverts have so far run on platforms including X, which Musk also owns, and promote moving Tesla’s HQ to Texas and approving the $55 billion pay. As Electrek reports:
In a new filing with the SEC, Tesla confirmed that it is now buying ad spaces to encourage shareholders to vote for these items.
Tesla has to file with the SEC all the “communications” it has with shareholders regarding the vote and this time, the communications are listed as “sponsored” on Google – meaning that Tesla bought Google ads for it.
The automaker even spent money on Elon Musk’s pockets by buying ads on X with the post listed as “promoted”.
Shareholders, who have until June to cast their votes on the issues, could have seen the adverts running online. Each one encourages them to vote in favor of moving Tesla’s state of incorporation out of Delaware and into Texas, which was a move Musk promised after Delaware judges blocked the $55 billion pay. The ads also ask shareholders to vote in favor of having the final say on any compensation offered to Musk.
The spending on such adverts would be suspicious at any time, but it also comes amid falling profits and massive job cuts across the EV maker. Musk has pledged to cut roughly 10 percent of Tesla’s workforce, including across its Supercharger team, workers at its California base and even its interns.
2nd Gear: Uber And Lyft Are In Court Over Driver Benefits
There’s no denying it, rideshare services like Uber and Lyft have changed the way we get around town, but despite thousands of drivers across America operating rides for apps like this, the companies behind them still refuse to treat them as regular employees.
Now, the state of Massachusetts is taking Uber and Lyft to court over its treatment of people driving for the apps, reports Reuters. The lawsuit urges them to treat drivers as it treats its full-time employees, offering proper pay and benefits. As Reuters explains:
Massachusetts Attorney General Andrea Joy Campbell, a Democrat, is asking a judge to conclude that drivers for Uber and Lyft are employees under state law and therefore entitled to benefits such as a minimum wage, overtime and earned sick time.
Studies have shown that using contractors can cost companies as much as 30% less than employees.
Assistant Attorney General Douglas Martland in his opening statement said the companies’ algorithms, pricing policies and operating standards gave them a level of control over their drivers that belied any claim that they work independently.
The case, which will be heard in a non-jury trial, argues that because of the control Uber and Lyft have over drivers on their network, they should be treated to the same conditions as its contracted employees. It argues that conditions such as a 15-second window to accept rides and the fact that drivers often won’t know how much they will be paid for a trip mean that they should be privy to the same pay and benefits as salaried workers.
However, Uber and Lyft don’t believe this. Instead, they argue that the only full-time employees it needs are data scientists and developers who can fine-tune the app and make sure drivers are being connected with the right rides for them. This, they argue, is better for drivers than, oh I don’t know, holiday pay, healthcare and set hours.
3rd Gear: Tesla Settles Sexual Harrasment Case
Tesla is being put through the wringer these days, with slowing sales hitting its profits, boss Elon Musk cutting staff left, right and center, and its flagship Cybertruck electric pickup falling apart in customers hands. Now, the electric vehicle maker has settled a sexual harassment case brought by a former factory worker.
A factory worker at Tesla’s flagship Fremont, California, assembly plant sued the EV maker after claiming that they were dismissed from their role after complaining about sexual harassment in the workplace, reports Reuters. Now, the Cybertruck maker has reached an agreement with Tyonna Turner out of court. As Reuters explains:
Turner worked at Tesla’s flagship Fremont, California, assembly plant, where the company is accused in a number of lawsuits of failing to address rampant harassment of Black and female workers. The settlement appears to be the first in a series of sexual harassment cases filed against Tesla since 2021.
Tesla, which has denied wrongdoing in those cases, and lawyers for Turner did not immediately respond to requests for comment.
Turner in the lawsuit alleged that in the nearly two years she worked at the Fremont plant she was harassed about 100 times, including by a male coworker who followed her around the factory and stalked her.
The lawsuit is remarkably similar to several other cases that Tesla is currently facing. In fact, Turner’s allegations against the company are similar to “those in at least six other cases,” reports Reuters. Tesla is also facing lawsuits alleging that it tolerated “widespread racial discrimination” across its factories.
4th Gear: Mercedes Cancels Next-Gen Luxury EV Platform Over Slow Sales
There seems to be a never-ending stream of automakers canceling and delaying electric vehicle projects these days. First there were delays to GM’s electric switch, then Tesla canceled and un-canceled its affordable EV project, and now Mercedes has put its plans for next-generation luxury EVs on ice.
The German automaker has reportedly canned a new electric car platform that would form the underpinnings to next-generation EQS and EQE eclectic models, reports British outlet Autocar. The move is apparently due to slowing sales for Mercedes’ flagship EVs, as the site explains:
As first reported by Handelsblatt, development of the MB.EA Large platform has been canceled. The German financial publication says the decision has been made due to poor sales of the existing EQE and EQS models, citing information provided by four separate insiders.
The investment savings brought by halting the development and infrastructure changes at its production sites to accommodate the new platform are estimated to be between €4 billion and €6 billion (roughly £3.44bn and £5.16bn).
The updated large EV platform was set to join a medium iteration of the MB.EA platform that would have been used on new EQC sedan and SUV models. The larger platform had been earmarked for more luxurious offerings.
The move away from a luxury platform will free up funds and resources for new EV architecture that could underpin new electric compact models, sports cars and even commercial vehicles.