Ford versus Tesla: design thinking and the return to work

Ford and the other Big Three automakers negotiated a return to work with the United Auto Workers union. Tesla just said come back.

Ford versus Tesla: design thinking and the return to work

On Monday, Detroit’s Big Three automakers will restart production lines shut down in March amid the spreading coronavirus outbreak. The agreement to reopen comes after weeks of haggling—among the companies, the United Auto Workers, Michigan’s Republican-controlled legislature, and the state’s Democratic governor Gretchen Whitmer.

The standoff was politically charged. But executives at the Big Three—GM, Ford, and Fiat-Chrysler—eventually persuaded union leaders that it could take steps to minimize the risk of infection on the job.

As they return, workers at Big Three factories will receive extensive health screening. They’ll be provided with masks and face shields or safety glasses, required to stand six feet apart, sanitize their hands. In some cases, employee workstations will be separated with clear plastic panels. Tools and equipment will be sanitized each shift. Ford is reportedly testing electronic wristbands that detect and alert workers when they are within six feet of someone else.

Design consultants, both internal and external, have been actively involved in thinking through these new ways of working. As I noted in this space two weeks ago, Ford CEO Jim Hackett is an ardent advocate of “design thinking,” an approach to problem-solving that emphasizes empathy and putting the needs of users first.

Iain Roberts, chief operating officer at IDEO, the global design consultancy that developed the design thinking approach and works closely with Ford, stresses designers can’t just dream up solutions in isolation. The key, he argues, is to engage stakeholders to devise solutions everyone understands, accepts, and is willing to implement. That’s a message I’ve heard from many designers over the past several weeks in return-to-work discussions.

“Ramping up internal communications is vitally important, including regular sharing of information about the company’s evolving knowledge of the crisis and how it is using that knowledge to protect employees and the organization,” declare consultants at McKinsey in a recent report on manufacturing in the COVID crisis. “The best communication is two-way, with managers answering questions and engaging in an open dialogue with employees at all levels.”

“You have to build trust,” says Adam Cutler, a top designer at IBM, which also champions the design thinking approach. “People don’t want decisions handed down to them. You have to give them the space to tell you what they’re feeling.”

And then there’s Elon Musk. In trying to restart production lines at Tesla’s sole U.S. plant in Fremont, California, the electric carmaker’s founder has engaged in a different kind of dialogue—one that’s not exactly from the design thinking playbook.

On Monday, without any consultation or approval from the state, Tesla ordered the plant’s 10,000 employees back to work. Musk has been a vocal critic of pandemic-related lockdowns, which he has called “fascist,” and argued that measures taken to combat the virus will prove more destructive than the infection.

The previous weekend, the headstrong CEO filed a federal lawsuit against Alameda County, which has ordered the plant closed as a non-essential business. For good measure, he threatened to move the factory to another state. In reopening, Tesla has announced a plan to ensure worker safety at the factory, including many measures similar to those being rolled out by the Big Three.

“We are taking the time we need to get our personnel properly trained before they begin work and all employees must complete an online video training before returning to work at any Tesla facility,” the company said, noting the prevention measures at its California plant are modeled on steps it has taken at its Shanghai Gigafactory.

It’s unclear whether those measures will be sufficient to reassure the plant’s workers. Tesla is the only large U.S. automaker that isn’t unionized. Vox reports that Musk has employed a host of different tactics to stop workers from joining the UAW. The Tesla founder’s latest pledge to stand with his workers may not put them at ease.

“I will be on the line with everyone else,” Musk tweeted. “If anyone is arrested, I ask that it only be me.”

Clay Chandler
clay.chandler@fortune.com

Source : Fortune More   

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Oil-rich Norway will withdraw a record $37 billion from wealth fund as COVID-19 batters economy

The withdrawal from the country's rainy-day fund is more than four times the size of its last record withdrawal

Oil-rich Norway will withdraw a record $37 billion from wealth fund as COVID-19 batters economy

Norway plans to draw a record 382 billion kroner ($37 billion) from its wealth fund, in a move that will force the world’s biggest sovereign investor to embark on an historic asset sale to generate cash.

The unprecedented withdrawal is more than four times Norway’s previous record, which was set in 2016. The development reveals the scale of the economic damage done by the twin crises of Covid-19 and a collapse in global oil markets, with western Europe’s biggest crude exporter now facing its worst economic slump since World War II.

For the first time, Norway’s government is set to withdraw considerably more than the $1 trillion fund generates in cash flow from dividends and interest payments. The fund hasn’t provided an estimate for its income this year, but has said it’s bound to be lower than previously expected, as companies slash shareholder payouts. The fund’s cash flow was 243 billion kroner last year.

With asset liquidation now an inevitability, the fund is likely to focus sales on its bond portfolio. That’s because it needs to increase its holding of stocks after the equity portfolio fell below a required 70% target of the total portfolio.

Norway’s government uses its oil wealth to plug budget deficits every year. Until 2016, the so-called structural oil-corrected deficit was covered by the state’s income from petroleum, namely taxes, stakes in offshore fields and dividends from Equinor ASA. As long as the government was generating a surplus, it could deposit money into the fund. In 2016 and 2017, deposits were replaced by withdrawals, as petroleum revenue dwindled due to a slump in prices. But the fund was still able to cover that easily with its cash flow.

In 2020, everything changed. The government now expects to spend a record 420 billion kroner of oil money on crisis packages to prop up its economy, with the collapse in petroleum revenue adding to the shock. The government predicts its net cash flow from petroleum activities will drop by 62% to 98 billion kroner, the lowest since 1999.

More must-read energy sector coverage from Fortune:

—Why the coronavirus crisis could —Buccaneers of the basin: —As lockdowns decimate energy demand, —The Church of England is going up against ExxonMobil on climate change. Can it win?—Listen to , a Fortune podcast examining the evolving role of CEO
—WATCH: Why the coronavirus crisis could Subscribe to , a weekly look at the revolutions in energy, tech, and sustainability.

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