Tesla Is Finally Fixing Its Board

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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories about corporate governance best practices and sometimes interesting things you need to know.

1st Gear: The One True Independent Board

One of the biggest complaints that investors have had about the way Tesla has been run is that its board has been stacked with friends of CEO Elon Musk, the One True Star Boy, who believe he is also the One True Star Boy. And while that title is fun for blogs, having your board stacked with friends and relatives probably isn’t best for corporate governance.


So Tesla says its adding two people from the outside world:

We would like to welcome Linda Johnson Rice, Chairman and Chief Executive Officer of Johnson Publishing Company (JPC), and James Murdoch, Chief Executive Officer of 21st Century Fox (21CF), to Tesla’s board of directors.

In addition to her role as Chairman and CEO of JPC and Fashion Fair Cosmetics, Linda is CEO of Ebony Media Operations and Chairman Emeritus of EBONY Media Holdings, the parent company for the EBONY and Jet brands. Linda has extensive corporate board experience, having previously served on the boards of a number of companies across a variety of industries, including Bausch & Lomb, Continental Bank, Quaker Oats, Dial Corporation, MoneyGram and Kimberly-Clark Corporation, and currently serving on the boards of Omnicom Group and Grubhub. Linda is a Trustee at the Art Institute of Chicago, President of the Chicago Public Library Board of Directors, Council Member of The Smithsonian’s National Museum of African American History and Culture, and board member of After School Matters and Northwestern Memorial Corporation.

Before becoming CEO of 21CF in 2015, James held a number of leadership roles at the company over a two-decade career. He previously served as its Co-Chief Operating Officer, Chairman and CEO for Europe and Asia, as well as Chairman of BSkyB, Sky Deutschland, and Sky Italia, the businesses that now comprise Sky plc. He also served as CEO of BSkyB and STAR, India’s entertainment leader. In addition to being a key driver of 21CF’s domestic and international expansion, James has been instrumental in the company’s robust social impact initiatives, including its decade-long leadership on environmental sustainability. James and his wife, Kathryn Murdoch, are founders of a family foundation, Quadrivium, which supports initiatives involving natural resources, science, civic life, childhood health, and equal opportunity.


While that’s great and all (having a black woman on a corporate board is still exceedingly, depressingly, especially rare) there are two things about this move that are weirding me out slightly. First, getting two people from the media world to help run a car company is a bit odd, unless you’re extraordinarily thirsty for good press. Secondly, publications like the Wall Street Journal should now have to put a disclosure on every story they write about Tesla and SpaceX, thanks to James.

And thirdly, if you’re worried about too many close ties on a corporate board, why would you then appoint two people whose careers were launched, guided, and anointed through family connections?


Just odd.

2nd Gear: Finally Some Federal Rules About Self-Driving Cars

While the single-party-dominated Congress still can’t seem to get anything done—not that you’d really want it to, at this point—the one thing that does seem to be moving along is a path to an autonomous vehicle future. From Reuters:

A U.S. House subcommittee will vote on Wednesday on a sweeping proposal to allow automakers to deploy up to 100,000 self-driving vehicles without meeting existing auto safety standards and bar states from imposing driverless car rules.

The measure, which would be the first significant federal legislation aimed at speeding self-driving cars to market, would require automakers to submit safety assessment reports to U.S. regulators, but would not require pre-market approval of advanced vehicle technologies.

Automakers would have to show self-driving cars “function as intended and contain fail safe features” but the Transportation Department could not “condition deployment or testing of highly automated vehicles on review of safety assessment certifications,” the draft measure unveiled late Monday said.


Although at some point we definitely will need some regulations for autonomous cars, such as “don’t murder people.”

3rd Gear: Any NAFTA Revision Will Be Spineless, As Expected

One of President Donald Trump’s campaign promises was to re-tool the North American Free Trade Agreement, or scrap it altogether. It looks like his administration is going with the “re-tool” option, and by “re-tool” they mean “don’t do much of anything.” Via Reuters:

In a much-anticipated document sent to lawmakers, U.S. Trade Representative Robert Lighthizer said he would seek to reduce the trade imbalance by improving access for U.S. goods exported to Canada and Mexico under the three-nation pact.

For the first time in a U.S. trade deal, the administration also said it wants an “appropriate” provision to deter currency manipulation by trading partners. The move appeared aimed at future trade deals rather than specifically at Canada and Mexico, which are not considered currency manipulators.


There are no blustery threats of trade wars. No promises to scrap the deal. None of our traditional demand of tribute from Canada in exchange for no crushing them with our mighty army this year.

It’s just “improving access to goods.”

Okay then.

4th Gear: A New Factory In Michigan

There’s going to be a new factory in Michigan! DETROIT IS BACK BABY. Except it’s in Saline, an hour outside Detroit, and it’s only about 50 jobs. But still, it’s for an autonomous bus-thing, the Detroit News reports:

Navya, the French maker of self-driving shuttles, will set up its 20,000-square-foot production facility in Saline.

Once the operation is up and running, the facility will produce 25 of its Arma shuttles before the end of the year. Navya’s $1 million-plus investment plan is expected to create 50 jobs.

Navya has previously partnered with the nearby University of Michigan and will operate driverless shuttles on the North Campus starting in the fall semester.


Let’s hope it’s more than a nice start, and the autonomous bus-thing becomes an actual Thing.

5th Gear: Serbian Fiat Strike Continues

Workers at a Serbian Fiat plant are on strike with a bunch of demands, and because it’s Serbia, the government is now getting involved, Bloomberg reports:

Workers at the Fiat Chrysler plant in Serbia continued protests and will seek help from President Aleksandar Vucic after Premier Ana Brnabic said their strike was politically motivated and 320 jobs may be lost as a result.

Production at the plant in Kragujevac, central Serbia, was halted on June 27, endangering the company’s goal to produce 85,000 cars this year. It now builds 440 cars a day. Unions are demanding an 18 percent base salary increase, better working conditions and additional workers to meet the goal.

“I think there is a political interest behind the protests,” Brnabic said on state TV broadcaster RTS Monday evening, without elaborating on who she believed specifically is behind the job action. “The workers have been manipulated.”


Though I admittedly know next to nothing about what is surely an immensely complex situation in Serbia, as a Yugo owner I must say that, by default, I am proud to stand with the Glorious Workers of Serbian Fiat Weirdness. All Hail the Workers.

Reverse: And Nothing Ever Came Of It

Juan Manuel Fangio–the Argentine race car driver dubbed “the Maestro”–makes his European racing debut at the Grand Prix de l’Automobile Club de France in Reims, France on this day in 1948.


Neutral: Who Should Be On Tesla’s Board Instead?

Tesla already gets a ton of press. Maybe someone from the supplier world?