Good morning.
Ford Motor Co. plans to cut its salaried work force by 10% in order to boost profits and a slumping stock price, according to The Wall Street Journal. The move comes as U.S. vehicle sales have slowed, following seven years of growth.
CEO Mark Fields had said in a conference call April 27 that the company planned to cut $3 billion in costs this year. “The reason for that is not only mindful of the current environment we’re in, but also I think preparing us even more for a downturn scenario.”
Separately, Fortune hosted its annual Most Powerful Women dinner in New York last night, featuring former Fox News host Gretchen Carlson, whose sexual harassment suit against network Chairman Roger Ailes led to his resignation. Carlson can’t talk about what happened at Fox or her settlement, but she has taken aim at a common business practice that she believes helps shield sexual predators: forced arbitration.
“You are giving up your seventh amendment right for a jury trial” when you sign contracts with such clauses, she said. “The problem with forced arbitration is it is secret.” Even if you win in arbitration, “you can never tell anyone about it.” And usually, “the predator keeps working.” Carlson got around her forced arbitration agreement by suing Ailes personally, rather than the network.
Carlson has testified before Congress against forced arbitration clauses, and plans to keep up her campaign on the topic. And She says it is a major theme of her book being published in October, entitled “Be Fierce.”
More news below, including the latest developments in the courtroom battle between Uber and Alphabet’s self-driving project Waymo. There, too, Uber had tried to channel the case into a confidential arbitration tribunal, but now looks like having to defend itself in a public trial.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
• White House Rejects Loose Lips Claims
President Donald Trump shared highly classified information about Islamic State to Russian officials when they visited him in the Oval Office last week, the Washington Post and others reported. The information appeared to have motivated the recently-imposed ban on laptops in airliners flying to the U.S. from certain countries. White House officials denied the claims, National Security Adviser H.R. McMaster saying: “I was in the room. It didn’t happen.” Secretary of State Rex Tillerson and McMaster’s deputy Dina Powell also disputed the Post’s account. Time
• Hackers Hold New Disney Movie to Ransom
Cyber-thieves have stolen one of Walt Disney’s unreleased movies and are threatening to release it ahead of the studio’s scheduled opening, an act that could knock millions off its box office receipts. The Hollywood Reporter reported that CEO Bob Iger had told staff of the hack but hadn’t said which movie was affected. Its next two scheduled releases are the latest in the Pirates of the Caribbean series, and the Pixar sequel Cars 3. It’s unclear when the theft happened, but the news emerges at a time when the world will struggle to see anything exceptional in Disney’s cyber-security lapses. Quite apart from the WannaCry episode, it’s only a few weeks since hackers stole Netflix’s new series of Orange is the New Black and leaked it on to The Pirate Bay. Fortune
• Change You Can Half-Believe In
Emmanuel Macron appointed a Prime Minister from France’s main center-right party, Edouard Philippe, in an effort to broaden his support base going into key legislative elections next week. Philippe drew the ire of his party, Les Républicains, who will be vying with Macron’s new La République en Marche for control of the legislature. While Philippe is of a different party, the fact that he is a white male from the same elite grad school and age group as Macron and, like the young President, has enjoyed patronage high up in France’s political establishment all suggests that Macron’s revolution may be a lot less radical than promised. Also yesterday, Macron also made his first visit as President to Berlin, where Angela Merkel made encouraging noises but said nothing concrete about his proposals for deeper Eurozone integration. Fortune
• Brew American
AB-Inbev the world’s biggest brewer, is to invest $2 billion in its U.S. operations over the next four years to update its packaging, develop its line of craft beers and expand into beverages beyond beer. The company’s management is under pressure to show that it can invest for future growth after some harsh scrutiny in recent months of its largest shareholder, private equity group 3G. The company is currently exploring cooperations with both Starbucks and Keurig Green Mountain. Fortune
Around the Water Cooler
• Ant Financial Puts IPO on Ice
The deal that was likely to be the biggest IPO of the year is off, at least until the end of next year. According to the Financial Times, Ant Financial, the payments arm of Alibaba Group, wants to wait until after the Communist Party chooses a new set of leaders for the next five years before it embarks on the politically sensitive task of converting itself into a foreign-listed entity. It also needs to clear some big regulatory hurdles about foreign acquisitions (notably MoneyGram) before it can tell a convincing global growth story. FT, metered access
• Eddie Lampert's Howls of Pain
The pressure is getting to Sears CEO Eddie Lampert. Just days after blaming the media for the retailer's deepening problems, Lampert blasted some suppliers in an unusual blog post, accusing them of taking advantage of Sears' problems to embarrass it in the press and extort better payment conditions. Having already admitted to doubts that Sears can continue as a going concern, it’s arguable that Lampert doth protest too much. Fortune
• Uber Ordered to Return Files to Waymo
A federal judge told Uber to return confidential files on autonomous driving to Waymo, but stopped short of ordering the ride-hailing company to shut down its self-driving car program. “The evidence indicates that Uber hired Levandowski even though it knew or should have known that he possessed over 14,000 confidential Waymo files likely containing Waymo 's intellectual property," Alsup wrote. Alsup also ordered Uber to provide Waymo with a comprehensive log of written and spoken communication between Uber and Levandowski regarding Lidar, the sensor technology at the heart of the dispute. At the same time, Alsup gave little credence to Waymo’s patent claims against Uber, and said “few” of the trade secrets it claimed to have lost were being used directly by Uber. Fortune
• Lyndon Rive Is Leaving Tesla
SolarCity founder Lyndon Rive, who oversaw the dramatic growth of the biggest U.S. residential solar company before selling it to Tesla, is leaving the electric vehicle maker in June. His departure will be viewed with relief by some shareholders, who were concerned that the acquisition by Tesla amounted to Elon Musk bailing out his cousin. Musk has ridden out that storm and is now set on popularizing solar rooftops with a new product that looks more like a traditional roof than the unsightly PV-panels that SolarCity’s business has relied on to date.
Summaries by Geoffrey Smith; geoffrey.smith@fortune.com @geoffreytsmith
