Federal Government Launches Systemic Racism Probe Into Tesla

The Equal Employment Opportunity Commission (EEOC) issued a reasonable cause finding to automaker Tesla over systemic racism allegations, according to a recent filing from the company.

In February, California’s Department of Fair Employment and Housing (DFEH) said that it had received hundreds of complaints from African-American workers who claimed they had been segregated “to the lowest levels of the workforce” at the company and lacked representation “in the ranks of executives, senior officials, and managers.” Tesla’s most recent filing with the Securities and Exchange Commission (SEC) indicated that the EEOC had issued a finding that “closely parallels” allegations from the state of California.

Tesla will begin the “mandatory pre-filing conciliation process” with the EEOC, according to the document, by which the company will potentially engage in a mutual resolution with the alleged victims of discrimination.

Yet Tesla had formerly called the DFEH investigation “misguided” and an attempt to “generate publicity,” noting that every one of the more than 50 discrimination accusations faced by Tesla over the past five years had been debunked by the DFEH.

“It therefore strains credibility for the agency to now allege, after a three-year investigation, that systematic racial discrimination and harassment somehow existed at Tesla,” the company said in a blog post. “A narrative spun by the DFEH and a handful of plaintiff firms to generate publicity is not factual proof … Attacking a company like Tesla that has done so much good for California should not be the overriding aim of a state agency with prosecutorial authority.”

The news of the federal inquiry follows the Securities and Exchange Commission (SEC) announcing in May that it would investigate Musk’s disclosure that he failed to disclose on time that he held more than 5% of Twitter shares. Musk has since argued that Twitter’s disclosed number of false or spam accounts is inaccurate and claimed that the company has neglected to provide him with precise information about its number of users.

The Biden administration’s Department of Energy said on Monday that it would provide General Motors (GM) with a $2.5 billion loan to finance construction of new electric battery facilities in Ohio, Tennessee, and Michigan, according to a report from Reuters. President Joe Biden has frequently lauded GM and Ford amid their efforts to expand electric vehicle offerings — yet has consistently decided to turn a blind eye to Tesla, the world’s largest electric vehicle automaker.

Former White House Press Secretary Jen Psaki hinted at Tesla’s lack of unionization last year when she was asked why the company did not receive an invitation to an electric vehicle summit in which Ford and GM participated.

“Well, we, of course, welcome the efforts of all automakers who recognize the potential of an electric vehicle future and support efforts that will help reach the president’s goal. And certainly, Tesla is one of those companies,” Psaki said. “Today, it’s the three largest employers of the United Auto Workers, and the UAW president who will stand with President Biden as he announces his ambitious new target, but I would not expect this is the last time we talk about clean cars, the move toward electric vehicles, and we look forward to having a range of partners in that effort.”

Nevertheless, GM recently announced that it plans to manufacture the battery-powered 2024 Chevrolet Blazer in Ramos Arizpe, Mexico, where the gas-powered version of the car is presently assembled.

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