Corporate Activism With a Cherry on Top - Many brands try. Ben & Jerry's keeps pulling it off 34
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○ Juul crosses the FDA—again 44
○ When you don’t pay the hackers 50
○ Wall Street’s awkward earnings 6
July 27, 2020
Many brands try.
Ben & Jerry’s keeps
pulling it off 34
Corporate Activism
With a Cherry on Top
Some things you see coming.
Some things you don’t.
The trick is to be ready
for anything.
Pablo from Infrastructure Support is
working every day to keep essential
market data flowing. Seamlessly.
We keep on.
So you can keep on.
©Bloomberg 2020 824440
Photographed responsibly by Pablo wit bloomberg.com/company
July 27, 2020
◀ Juul fixed a flaw with
its vaping rig, shown
here. The FDA may have
a problem with that
1
PHOTOGRAPH BY IAN LORING SHIVER FOR BLOOMBERG BUSINESSWEEK
FEATURES 34 Ice Cream With a Conscience
Long known for its social activism, Ben & Jerry’s turns to Black Lives Matter
40 The End of U.S. Energy Independence?
Plunging prices and less love for fossil fuels batter the fracking industry
44 Living Dangerously
Juul didn’t tell the FDA it had improved an e-cigarette. Will it pay a price?
50 Back From a Hack Attack
Norsk Hydro did it all with low tech, and without paying a ransom
◼ CONTENTS Bloomberg Businessweek July 27, 2020
◼ IN BRIEF 4 Vaccine race ● EU stimulus ● New faces at the Fed ◼ COVER TRAIL
◼ OPINION 5 Federal officers are just what Portland doesn’t need How the cover
◼ AGENDA 5 Interest rates ● German GDP ● Perelman’s paintings gets made
①
“We’re doing a story
◼ REMARKS 6 Wall Street had a great quarter; it won’t play well about how Ben &
Jerry’s manages to pull
off the corporate social
BUSINESS 8 The not-so-wild one in the driver’s seat at Harley
1 10 Airbus, Boeing, and…Commercial Aircraft Corp. of China?
justice PR so well.”
“They also do a decent
11 China and the U.S. vie to stream in Southeast Asia mint chocolate chip …
which I’ll be consuming
12 Dirk Van de Put on running a snack empire in a pandemic to get the ideas
flowing.”
TECHNOLOGY 15 Employees describe a boys club atmosphere at Ubisoft,
2 maker of Assassin’s Creed and other video game hits
②
FINANCE 20 What’s fishy about those rosy private equity numbers
3 22 How a stockpicking guru ended up on Unsolved Mysteries
23 The market may be rallying itself right into a bubble
25 Wall Street is slowly reopening. Some traders never left
ECONOMICS 26 More stimulus, experts say, or the economy falls off a cliff “Lady Liberty is into
cookie dough?”
28 ▼ Questioning China’s African infrastructure funding
③
2
“Better, but could it be
more, I don’t know, real?”
MAPUTO BAY BRIDGE, MOZAMBIQUE: ZHANG YU/XINHUA/ALAMY. CROWD AND LIBERTY: GETTY IMAGES (2). ICE CREAM: COURTESY BEN & JERRY’S
“I have an idea. … It
involves a photo shoot.”
“You’re sugar-crashing,
aren’t you?”
“If it takes a pint per
idea, then that’s what
it takes.”
POLITICS 30 Home-schooling fans want a slice of the next stimulus
32 Nov. 3 nears, and the social media trickery soars
◼ PURSUITS 55 Your Rolls isn’t special enough. You need a limited edition
58 What’s new for dinner: Made-to-order crockery
60 Etiquette rules for strange times
62 The 2016 Barolos are out, and it was quite a year
63 Schwinn’s smooth-riding brand-new old bike
◼ LAST THING 64 The questions Congress ought to ask Big Tech’s CEOs
How to Contact Bloomberg Businessweek
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◼ IN BRIEF Bloomberg Businessweek By Mark Leydorf
● Worldwide, the number of
Covid-19 cases exceeds
● “My ● Many states dropped shutdown restrictions too soon.
Now much of the U.S. is experiencing pandemic whiplash.
administration
15m will stop at
Population-weighted share of states, by status of Covid-19 restrictions
On hold Increasing Easing
nothing to
and more than 619,000 100%
have died. Drugmakers
around the world are save lives.”
sprinting to prepare
vaccines. AstraZeneca,
CanSino, Moderna, Pfizer, 50
Sinovac, and even the
Russian Defense Ministry
On July 21, President Trump held his
boasted about strong early first briefing on the pandemic in almost
results this week. three months. The coronavirus has
now killed 142,000 Americans, at least 0
80,000 of them since he last took the
podium to address the crisis. 3/15/20 7/17/20
● The U.S. ● A long-awaited inquiry in
Parliament said the British
● Leaders in ● The EU on July 21 agreed
on stimulus spending of
Department of
the U.S. met to
€750b
government “actively
State forced avoided” looking into
the closure of whether Russia interfered negotiate the
China’s consulate
in the Brexit referendum.
next round of ($869 billion) to pull it out
PORTLAND: CAITLIN OCHS/REUTERS. WALLER: ARAH SILBIGER/GETTY IMAGES. SHELTON: TOM WILLIAMS/GETTY IMAGES. DATA: GOLDMAN SACHS GLOBAL INVESTMENT RESEARCH
Prime Minister Boris of the worst recession in
4 in Houston. Johnson dismissed the stimulus. memory and tighten the
findings and rejected the financial bonds holding the
panel’s call for a full review Union’s 27 nations together.
of the matter. Washington has until July 31, when the
With almost a third of
current expansion of unemployment the funds earmarked to
benefits expires, to find a solution.
Senate Majority Leader Mitch
fight climate change, the
McConnell supports more payments package is the biggest
The same day, July 21, the Justice to individuals and loans for small
Department accused two Chinese businesses. House Speaker Nancy
green stimulus in history.
hackers of trying to steal data, Pelosi also wants $1 trillion for state
including coronavirus research, from and local governments. President
companies in 11 western nations. Trump, meanwhile, is pushing for a
China vowed to retaliate. payroll tax holiday. ▷ 26
● In a unanimous ● The Senate Banking
Committee approved two
decision, Egypt’s Trump nominees for the
Parliament gave Federal Reserve Board,
Abdel Fattah more than five months after
their confirmation hearings.
El-Sisi a green Christopher
light to intervene Waller, director of
if necessary in research at the
St. Louis Fed, and
Libya’s civil war. Judy Shelton, a
onetime advocate
for returning to the gold
standard, now go to the full
The Egyptian president has warned
the Turkish-backed internationally
Senate for a vote.
recognized government in Tripoli
● Demonstrations continue in Portland, Ore., despite the arrival of unbadged federal against attacking eastern commander
officers. State and local leaders have demanded these “secret police” withdraw at Khalifa Haftar in the city of Sirte, the
once, but the president says he plans to send them to more U.S. cities. gateway to Libya’s oil crescent.
◼ BLOOMBERG OPINION July 27, 2020
More than 900 immigrant detainees in the department’s
The Feds in Portland custody have contracted the virus, while its own agents have
complained about a lack of personal protective equipment.
Are Doing More That’s to say nothing of the department’s other pressing
responsibilities—including dealing with large numbers of
Harm Than Good migrants and asylum seekers at the southern border, signifi-
cant threats to election security, a spike in state-sponsored
cyberattacks, vulnerabilities in critical infrastructure, and
virus-related travel disruptions—even as it’s staffed with acting
officials (or no one at all) in a slew of key positions. Members of
President Trump’s plan to deploy federal law-enforcement Congress have questioned whether the department could even
officers in cities gripped by protests has so far been a respond to a natural disaster in its current state.
thoroughgoing failure. That isn’t stopping the administration With so many problems to attend to, the last thing the
from doubling down. department—and the country—needs is for DHS officers
Earlier this month, the Department of Homeland Security to be deployed in cities where their presence has proved
began sending officers to Portland to protect federal property unwanted and counterproductive. For more commentary,
from continuing demonstrations. DHS dispatched the officers go to bloomberg.com/opinion
without badges, in unmarked vehicles and wearing generic
camouflage uniforms. Lacking training for this kind of assign-
ment, and given only the vaguest instructions, the agents ◼ AGENDA
tear-gassed elderly women, severely injured several protesters,
and detained others without charges or explanation. In doing
so, they’ve only worsened the disorder and fueled new anger.
Now Trump is threatening to send officers to at least half
a dozen other cities “all run by very liberal Democrats”—
a phrase that suggests the president is more interested in 5
making a political point than in restoring order.
It’s true that the mayhem in Portland has gone on for
far too long. Local authorities need to enforce the law and
ensure that demonstrations remain peaceful. But the presi-
dent’s job is to support them in such an effort, not to barge in
and compound the problem. The mayor and governor have
demanded that the officers leave, both of the state’s senators
have condemned the operation, the attorney general has filed
a lawsuit, and prosecutors have opened a criminal investiga-
tion. The president should withdraw these units before any
more harm is done.
▶ Tech Testifies
“I don’t need invitations by the state, state mayors, or state The leaders of Amazon, Apple, Facebook, and Google head
governors to do our job,” said Acting Secretary of Homeland to Washington (virtually) on July 27 to answer questions
Security Chad Wolf, who was assigned to lead the department from the House Judiciary antitrust subcommittee, which is
in November. “We’re going to do that, whether they like us investigating the quartet’s online dominance. ▷ 68
there or not.”
This misses the point. The federal government has a right ▶ With unemployment ▶ Japan’s Ministry of ▶ On July 30, Germany
above 11% in the U.S. Economy, Trade, and reports unemployment
to protect federal property, but acting so clumsily, and over and Washington divided Industry releases retail and GDP. Economists
the objections of local officials, is needlessly inflammatory. It about how to ease the sales figures for June expect the rate of
recession, the Federal on July 29. Analysts will growth to slow further
looks like a threat to cities to get in line with the president’s Open Market Committee be gauging the impact and joblessness to inch
vision of crowd control or face an invasion of feds ready to meets on July 29 to set of the shutdown on the up to 6.6%, from 6.4%
the target interest rate. country’s economy. in June.
crack skulls.
It’s also a distraction from what the DHS should be doing.
ILLUSTRATION BY LAUREN MARTIN
The agency has a vital role to play in containing the Covid-19 ▶ On July 30, the China ▶ The U.S. election ▶ Billionaire Ronald
Logistics Information season heats up in early Perelman hopes to sell
pandemic. Its response so far has often been chaotic and Center puts out August, when senators works by Joan Miró
incompetent. It failed for months to coordinate federal its Manufacturing go into recess. Veteran and Henri Matisse at a
Purchasing Managers forecaster Charlie Cook Sotheby’s auction on
relief efforts or acquire adequate protective supplies. Asked Index, a key indicator rates five seats, all held July 28. Together, the
in a hearing about how many respirators and face shields of industrial activity in by Republicans, as paintings are valued at
the country. toss-ups. more than $53 million.
the country needed, Wolf could not even venture a guess.
◼ REMARKS
6
Awkward! PHOTO ILLUSTRATION BY 731; PHOTOS: BLOOMBERG (2); GETTY IMAGES (2)
● Banks profited from volatile stock ● By Sridhar Natarajan and
and bond trading as the pandemic Michelle F. Davis
roiled the markets
◼ REMARKS Bloomberg Businessweek July 27, 2020
A bunch of Wall Street executives got together for dinner Banks also are quick to note that the Federal Reserve
a decade ago while the U.S. economy was in tatters. Their didn’t step in to save them as it did in the last crisis. Instead,
industry, fresh off a bailout, was printing big profits again— the banks helped head off another meltdown by aiding com-
and Americans were seething. Congress wanted hearings. panies in raising money and avoid bankruptcy. “The most
As the executives picked at their food, one from important thing we could do is be a healthy and vibrant
Goldman Sachs Group Inc. turned to his peer from Morgan bank through this crisis,” JPMorgan Chief Executive Officer
Stanley, which had been slower to bounce back from the Jamie Dimon said in response to the analyst.
crisis, and said: “You have no idea how damn lucky you The Fed may not have explicitly paid the banks billions
are to lose money with a hopeless business model.” The of dollars, but it created an environment in which their suc-
table erupted in laughter. The kernel of truth in the quip cess was all but guaranteed. The central bank helped cash-
is that nobody likes bankers profiting as the world burns. strapped companies raise money to shore up their finances
It draws a harsh spotlight. and pay their bills. Banks made money from facilitating the
Over the past week, Wall Street’s five biggest invest- fundraising, as well as from the related spike in stock and
ment banks disclosed $45 billion in revenue from trad- bond trading.
ing and dealmaking units, marking those businesses’ best Bank executives say that such is the life of an essential
quarter in modern history. The catalyst: a deadly global middleman: You ride the waves as they come. But this tur-
pandemic and the Federal Reserve’s unprecedented mea- moil happened to keep the music playing at banks after 2019,
sures to prop up the economy. their most profitable year in history. “It’s always good to
It’s hard to imagine a more awkward time to land a wind- be a Wall Street bank,” says Greg Gelzinis, a policy analyst
fall. For years, bank trading chiefs have been begging, even at the Center for American Progress, “whether we are in a
praying, for a surge in volatility to lift their fortunes by recession [or not].”
spurring client transactions. Banks finally got their score Beyond the worries over optics are deeper policy ques-
as markets plunged, with television screens showing refrig- tions. How effective is the Fed’s stimulus in providing credit
erated morgue trucks. Then they made even more money to critical industries, and how much lining of Wall Street
as authorities rushed to help. Morgan Stanley posted its pockets is acceptable as a side effect? When authorities
highest revenue and profit ever. JPMorgan Chase & Co. intervene, can society win more than traders? What of the 7
blew past the revenue record its traders notched in the moral hazard in throwing a lifeline to companies that took
first quarter—topping it by 34% in the second quarter. on too much debt?
Goldman’s profit rose, even as the company set aside an Fed Chair Jay Powell has indicated that, in this moment,
additional $1 billion to cover potential legal costs, includ- those concerns are secondary to saving the economy and
ing those related to probes into its role in the looting of a millions of jobs. But Wall Street’s gains will only revive per-
Malaysian investment fund. ceptions that the deck is stacked in its favor.
The numbers were high enough that the ranks of sell- Representative Katie Porter (D-Calif.), who’s been joust-
side stock analysts (sometimes mocked as cheerleaders ing with JPMorgan’s Dimon for 15 months, couldn’t resist
for prefacing conference call questions with “Great quar- taking a shot after the bank posted results. Why, she asked,
ter, guys!”) wondered about the potential for a public back- should Americans accept bankers becoming richer and
lash. “Fair or not, banks are being depicted as being on the richer in the middle of a pandemic?
wrong side” of economic inequality and other issues, UBS Those sentiments can have big ramifications. The profits
Group analyst Saul Martinez said on the JPMorgan earnings investment banks made in the wake of bailouts in 2008
call. “I’m just curious if you are concerned at all about pop- spurred the antigovernment Tea Party movement, the
ulist, antibank policies gaining traction.” Occupy Wall Street demonstrations, and a wave of new reg-
At least the banks didn’t cause the crisis—unlike in 2008. ulation. Complaints that the game is rigged later played into
In recent years, banks maintained their extensive trading the ascent of populism in the 2016 presidential election, and
operations, even as low volatility in the markets made it they reverberate today.
harder for them to generate profits. One argument for Banking leaders are well aware of the stakes. Some
keeping the units was that they can provide a hedge in recently made it clear to their troops that they cannot be
crises, making money while other parts of the bank suf- seen crowing. If it weren’t for the pandemic, Goldman CEO
fer from loan defaults and further damage from a slump- David Solomon might have enjoyed the sight of a packed
ing economy. auditorium at the firm reacting to the best quarter under
In fact, three of the Wall Street giants—JPMorgan, Bank his leadership. Dimon would have strolled the aisles of
of America Corp., and Citigroup Inc.—set aside much of the JPMorgan’s Madison Avenue trading floors, personally salut-
money generated by the trading bonanza so they can better ing his workers.
weather anticipated losses on lending to desperate compa- Instead, Solomon met with a couple of dozen executives
nies and consumers. All together, the five banks stockpiled scattered in the hall in front of him. At JPMorgan, Dimon
more than $25 billion in the quarter. emailed employees a tightly worded “congratulations.”
Bloomberg Businessweek July 27, 2020
B Harley-Davidson Gets
An Unlikely Rider
U ● The motorcycle icon tapped So what is Jochen Zeitz, a European
S
environmental activist and celebrated African art
a German environmentalist to collector, doing behind the handlebars of the U.S.’s
stem its U.S. slide most iconic motorcycle manufacturer? He’s trying
to save it from becoming an anachronism.
I
Zeitz, who took over as chief executive officer of
Mention the name Harley-Davidson, and visions of Harley-Davidson Inc. in February, is under pressure
high-handled bikes growling down endless, sun- to turn around the storied company, whose heavy-
streaked highways instantly come to mind. Whether weight $22,000 bikes are prized by aging boomers
N it was the 1951-52 Panhead Chopper that Peter Fonda
rode across the country in Easy Rider or the 1991
Fat Boy in Arnold Schwarzenegger’s nail-biting chase
scene in Terminator 2: Judgment Day, the bikes have
but not so much by millennials.
He’s an unlikely savior. Unlike the Midwestern
accountants and engineers who’ve led Harley over
its 117-year history from its Milwaukee headquar-
E always been able to evoke a powerful feeling of ters, 57-year-old Zeitz grew up in Germany and
American nostalgia and freedom. graduated with a degree in international marketing.
S
8
S
Edited by
James E. Ellis◼ BUSINESS Bloomberg Businessweek July 27, 2020
He’s authored two books, a how-to on sustainable cut out for him. Harley’s core baby boomer riders
capitalism and a spiritual tome on management val- are aging out of the market. Millennials and
ues he co-wrote with a Benedictine monk. In 2017 he Generation Z would rather buy an ATV or an off-
turned his vast collection of African art into a nine- road bike than a heavyweight Hells Angels cruiser. At
story museum on the waterfront in Cape Town. Zeitz the same time, Indian, another historic U.S. motor-
speaks seven languages, plays classical guitar, and cycle brand, now owned by Polaris Inc., has been
set up a foundation to support ethical eco-tourism eating into Harley’s dominance of the heavyweight
like that practiced by his luxury resort in Kenya. market, while Japanese and European manufactur-
He can also see the spiritual side of motorcycling, ers beat it to the punch on lightweight bikes.
as in 2013 when he attended a mass where hundreds Investors and dealers are hopeful that Zeitz’s
of Harley enthusiasts took their bikes to the Vatican marketing cred will enable him to succeed where
to be blessed by Pope Francis. “You’ve had the sta- his predecessors have fallen short. Keith Wandell,
tus quo replaced by a vision of this cultured, worldly, who took over at Harley in 2009, was an auto exec-
global person,” says Tony Gonzalez, a Denver-based utive who upgraded manufacturing technology and
industry consultant who works with Harley dealers. forced unions to agree to job cuts. Levatich, an engi-
“If you look at most businesses right now, there’s a neer, tried everything from expanding into emerging
lot that are focused globally and trying to connect markets to offering less expensive lightweight motor-
with a new customer.” cycles and e-bikes for children. Neither was able to
Zeitz earned his fortune and managerial stripes combat the generational shift away from heavy-
when at age 30 he became CEO of an almost bank- weight motorcycles—about 78% of Harley’s ship- ▼ U.S. motorcycle unit
sales, year-over-year
rupt Puma SE and repositioned the sneaker com- ments worldwide—that poses an existential threat growth
pany as a hip fashion brand. That launched the to the company’s core U.S. market. Harley-Davidson
former Colgate-Palmolive Co. executive into CEO One skill that may set Zeitz apart is that he knows Heavyweight
stardom, landing him on the board of Harley in 2007. how to make things seem cool. At Puma, he took a category
He pushed the board to embrace business-friendly brand focused purely on athletic performance and All
environmentalism by championing the company’s repositioned it within the “sport lifestyle” niche, 9
10%
first all-electric motorcycle, LiveWire, and programs recruiting Madonna to wear the sneakers during
such as measuring supply chain impact. her 2002 concert tour and featuring skateboarders
He took the top job after the sudden resignation in its ads. By the time he stepped down almost two
of his predecessor, Matt Levatich, and immediately decades later, Puma’s stock had risen 27-fold.
0
had to confront the coronavirus pandemic, which But Harley has been trying to reach younger
shut Harley’s factories and depressed sales already riders for years. It started a riding academy two
suffering from a five-year slump in the U.S. decades ago to help bring women, twentysome-
Zeitz quickly pulled pages from the cost- things, Blacks, and Latinos to the brand. And today
-10
conscious playbook he used at Puma, where one of its female brand ambassadors fill up Instagram
his first moves was to walk into a sneaker factory in with adventure-porn posts of camping and riding 2011 2019
the company’s hometown in southern Germany and on the open road. Still, UBS estimated in 2017 that
tell workers he was sending their jobs to cheaper the median age of Harley riders in the U.S. was 52.
plants in Asia. He’s dismissed roughly 14% of Harley’s Rather than ginning up fresh interest among
workforce, including the chief operating officer, twentysomethings, Harley is now hinting it’s nar-
PHOTO ILLUSTRATION BY 731; IMAGES: GETTY IMAGES (14); HARLEY DAVIDSON (1). DATA: UBS
finance chief, and a swath of midlevel managers. rowing its aim toward affluent professionals who can
While details of Zeitz’s turnaround plan beyond cost afford its pricey bikes. “We are sharpening our focus
cuts have yet to be unveiled, he’s hinted at focusing on products and customers who are riding Harley-
on a more premium, high-margin product line—akin Davidson motorcycles or who already have interest,”
to what occurred with the Puma makeover. the company said in a statement.
So far, Wall Street is encouraged. Harley’s stock Zeitz sees electrification as one solution to the
has jumped 50% since Zeitz first addressed investors brand’s demographic challenge. At a 2014 summit in
on an earnings call in April, and a slew of analysts the Swiss Alps on sustainable business, he crowed
have either upgraded or started covering the shares, about a LiveWire prototype he was promoting. “The
citing his record and the potential for a turnaround. traditional hog owner is not necessarily the electric
Even activist investor Impala Asset Management, enthusiast,” he said. “But if you hear this bike and
which tried to oust the previous CEO, appears will- look at the bike, it’s totally Harley.”
ing to let Zeitz try his hand, after it negotiated the LiveWire received raves from critics and
right to nominate a new board member. enthusiasts, but its $29,799 price—roughly double a
The German marketing whiz still has his work similar gas-powered Harley—has made it a tough BUSINESS Bloomberg Businessweek July 27, 2020
sell. “Our youngest buyer was 72,” says Kevin previous management. He’s also said he’ll invest
Kodz, owner of Classic Harley-Davidson in Leesport, more in Harley’s most profitable heavyweights.
Pa. “They weren’t hitting the market they wanted, “Cutting costs and improving the lineup and mak-
but those are the guys who can afford it.” ing sure the investments are into profitable prod-
Defenders of LiveWire say it’s a so-called halo ucts, they can do better,” says Bob Bishop, Impala’s
product, an object of desire and aspiration meant chief investment officer.
to redefine the brand. The company has said it plans While that may help profitability in the short-
to electrify other parts of its lineup. term, Zeitz still has to grapple with Harley’s
Meantime, Wall Street is counting on Zeitz being demand problem, says Robin Farley, an analyst
a steely-eyed hatchet man rather than the eco- with UBS AG in New York. “Harley has a top-line
conscious idealist who earned the nickname “the issue,” she says. “I don’t know if marketing solves
sustainability Taliban” at Puma. By starving dealers it.” —Gabrielle Coppola, with Richard Weiss
of new inventory during Covid-19 shutdowns, Zeitz
THE BOTTOM LINE Harley is America’s premier motorcycle
cleared a glut of used bikes that had been weigh- brand. But its core customers are aging boomers, and it’s been less
ing on new-bike prices—a headache that dogged successful finding products to woo younger riders.
Start to Buy Local? ○ The pandemic may provide an opening
for Chinese plane maker Comac
The coronavirus pandemic has upended the boom designed to rival the Boeing 737 and Airbus A320.
in global air travel that fueled the fortunes of For now, Comac’s only plane in operation is the
Boeing Co. and Airbus SE over the past two decades. ARJ21, a jet that can seat up to 90 passengers. Since
But as aviation’s giants lose orders and cut staff, the introducing it in 2015, the company has managed to
Chinese aerospace company hoping to challenge deliver fewer than three dozen. But in June it deliv-
them is seeing an opening. On July 10, Air China ered the ARJ21 for the first time to the country’s
Flight CA1109 took off from Beijing for a city in Inner most important airlines—Air China, China Eastern
Mongolia, the first time the country’s flag carrier Airlines, and China Southern Airlines—which will
flew a plane made by Commercial Aircraft Corp. of receive a combined 105 by 2024. And regional car-
China (known as Comac), the state-owned manu- rier China Express Airlines in June ordered a total
facturer that previously had only provided planes of 100 ARJ21s and C919s. “This is the time where a
to third-tier carriers such as Genghis Khan Airlines. company like Comac that has a bunch of govern- ○ Number of Comac
ARJ21 jets ordered
With tensions rising between China and the ment funding can continue to drive forward even by China’s three most
West over issues including Hong Kong’s democracy as others are retrenching,” says George Ferguson, important airlines
movement, Comac may finally have an opportu- a Bloomberg Intelligence analyst.
nity to narrow the gap with Western manufactur- Belt-tightening is the norm for most aerospace 105
ers, which have been pummeled by the pandemic. players right now. Airbus received zero orders in
The coronavirus crisis “could be one of those June, the third month this year with no new busi-
things that alters the playing field substantially,” ness, and it plans to lay off 15,000 employees, or 11%
says Robert Spingarn, an analyst with Credit Suisse of its workforce. Boeing announced 6,700 layoffs in
YIN LIQIN/GETTY IMAGES. DATA: MEDIA PARTNERS ASIA
Group AG. “While aerospace companies are busy May, as customers scrapped purchases because of
putting out the fires of today, somebody else who the 737 Max’s safety problems and the travel slow-
doesn’t have those concerns and is under less pres- down. Boeing lost more than 600 orders in the first
sure may be able to make something happen.” five months of the year, and the company in April
Comac is part of China’s strategy to become more walked away from a $4.2 billion joint venture with
self-sufficient in everything from semiconductors to Embraer SA, the Brazilian maker of regional jets.
satellites. The nation will need to buy $1.3 trillion Comac has yet to make inroads with foreign air-
of planes over two decades, says a 2018 forecast by lines and will face challenges given concerns about
Comac, which is flight testing its single-aisle C919, the safety of Chinese-made aerospace products,◼ BUSINESS Bloomberg Businessweek July 27, 2020
says Larry Wortzel, a member of the U.S.-China In early June, IQiyi Inc., in which Baidu Inc. owns
Economic and Security Review Commission. One a controlling stake, hired away Kuek Yu-Chuang,
way for Comac to jump-start its regional jet pro- Netflix’s main liaison to governments in Southeast
gram would be an alliance with Embraer, whose Asia. A couple of weeks later, Tencent Holdings Ltd.
debt rating was cut to junk soon after the Boeing acquired IFlix Ltd., a video service in the region.
deal cratered. A partnership could address Comac’s Both companies have recently ramped up efforts to
shortcomings in both production and its ability to produce and license local content and are looking to
provide post-sales service, says Ferguson. When add staff in markets including Thailand, Indonesia,
asked in June about joining with a Chinese company, and the Philippines.
Embraer Chief Executive Officer Francisco Gomes For both Tencent Video and IQiyi, the growing
Neto said only that the company is considering part- investment in Southeast Asia marks the companies’
nerships. Comac declined to comment. most significant expansion outside China. Neither
Yet heightened tensions between the U.S. and Netflix Inc. nor Disney+ operates there because of
China could be an obstacle to Comac’s expansion. the country’s strict rules governing foreign owner-
The Trump administration in June published a ship of media. Tencent declined to comment for
list of 20 companies it says have links to China’s this story, but it said its acquisition of IFlix is part of
military, including Aviation Industry Corp. of its plan to expand WeTV, its international streaming
China, a Comac shareholder. “As the U.S. govern- service. In a statement, IQiyi noted it was commit-
ment expands sanctions on Chinese companies, ted “to serving users of different markets.”
this could make a Comac-Embraer deal nonvia- The Chinese streaming services are entering the
ble,” says Thiago Aragao, a political analyst with fray before any company has established a dom-
Brasilia-based Arko Advice. �Bruce Einhorn, with inant position in the region. Netflix, the leading
Chunying Zhang and Murilo Fagundes streaming service globally, has yet to surpass 1 mil-
lion subscribers in any country in Southeast Asia,
THE BOTTOM LINE Comac expects China will need to buy
$1.3 trillion in new airliners over the next two decades. It’s
according to consultant Media Partners Asia. Walt
expanding its product line to share in the bounty. Disney Co.—which is Netflix’s biggest competitor in 11
the U.S.—is planning to roll out Disney+ in Southeast
Asia before the end of the year, according to a per-
son familiar with the matter. “The Chinese compa-
nies are seeing an opening,” says Vivek Couto, who
The Next U.S.-China runs Media Partners Asia. “It’s neutral territory.”
Still, Southeast Asia presents a challenge for any
Battle: Streaming global entertainment company. Outside a couple
of pockets of affluence such as Singapore, most
people in the region earn an average of less than
● China’s tech giants are facing off against $10,000 a year. And Indonesia, the area’s most pop-
Netflix and Disney in Southeast Asia ulous nation, is home to hundreds of different lan-
guages and is one of several countries where the
government imposes strict censorship rules. Before
As streaming has transformed much of the world’s Kuek left Netflix, his primary focus was helping
media landscape, most of the competition has been the streaming giant navigate such diplomatic chal-
between Western outfits vying to conquer the big lenges. He will serve a similar role at IQiyi, which
video markets of the U.S., Europe, Latin America, first expanded overseas in June 2019.
and India. But now two of China’s largest online The difficulty is evident in the story of IFlix. In
video companies, Tencent and IQiyi, are expand- 2015 entrepreneurs Mark Britt and Patrick Grove
ing across much of Southeast Asia, setting up the formed the service offering second-run Hollywood
first real battle between Chinese streaming giants movies and local programs for about $3 a month, a
and their Western counterparts, Netflix and Disney. fraction of the price of Netflix. They thought the
Top Streaming ◼ IFlix/WeTV Vidio 14.7 Line TV
9.2b
Platforms ◼ IWant
Minutes streamed ◼ Netflix 3 2.6
Q1 2020
◼ Viu
◼ Other platforms Indonesia Philippines Singapore Thailand BUSINESS
BW Talks Dirk Van de Put
price—and regional know-how—would win them
customers while Netflix struggled. Mondelēz International CEO Van de Put
In the years that followed, as Netflix sought to runs a snacks empire that ranges from
expand in Southeast Asia, it ran into many of the
problems that the IFlix co-founders anticipated. Oreo and Chips Ahoy! cookies to Cadbury
Netflix was considered too expensive for many and Toblerone chocolates. That’s not a
potential customers in the region, didn’t offer sub- bad place to be during a stay-at-home
titles in many of the local languages, and wasn’t
producing a lot of original programs for the area. pandemic. —Carol Massar and Jason Kelly
Even so, IFlix failed to get much traction. In a
region where traditional pay-TV services cost next ○ To streamline manufacturing, Mondelēz is reducing its number of
to nothing and YouTube is ubiquitous, persuad- product sizes or flavors by 25% ○ It has beverage exposure through
ing people to pay for a streaming video service is stakes in coffee maker JDE Peet’s and Keurig Dr. Pepper ○ Mondelēz
a challenge, even at a low price. IFlix’s acquisition has patented a new process to make chocolate, cutting sugar by 50%
by Tencent “is not really a deal,” says Couto. “It’s a
distressed-asset sale.”
There are signs the market for streaming ser- The pandemic has left many people force going. We reinforced all
stuck at home. How’s that for business?
vices may be improving. Viu, owned by Hong Kong the measures that we have in
telecom giant PCCW Ltd., has had success with a We see an increase in our plants and in our offices,
hybrid model, offering some free programming on in-home snacking. There’s a but we also spend a lot of
an advertising-supported service but charging cus- pronounced change of the time with our people talking
tomers who want a full range of shows and no ads. consumer eating a lot more about how to behave outside
Viu first gained a following by licensing shows in their homes and less in of our facilities to make sure
from South Korea, which are popular across all of restaurants, less on the go. they stay safe and healthy.
Asia. Subscriptions are growing 50% to 60% a year in But gum or candy bought
12 most of its markets and account for half the compa- in convenience stores is a The conversation at many companies
ny’s sales, according to Janice Lee, Viu’s chief execu- negative vs. previous years. has shifted toward diversity. How
tive officer. In Indonesia, people are spending more Consumers also want a little
important is that?
time watching Viu than Netflix or IFlix. bit more normalcy—they want If you have a diverse table
Recently, Netflix has started to attract more to feel good, safe. So they with different opinions,
customers by selling cheaper, mobile-only plans snack more and go a little bit different viewpoints, and
and by producing a greater amount of local con- more to comfort food. They you’re really open to listen to
tent. It now has about 800,000 subscribers in the also go back to brands they that, in the end you’re better
Philippines, where it’s the clear market leader, and know and love. So we see informed and you will make
close to 600,000 customers in Thailand, where it’s that effect, that our market better decisions. I think
second to Line TV, a local service. “Netflix has gone share in our big brands is the issue is more that you
to the races, particularly in the last six months,” growing quite a bit. tend to recruit or surround
Couto says. “Consumption of Netflix in a lot of
yourself with people who
these markets is through the roof.”
With the potential of a second wave, do are the same as you. It feels
Chinese technology is already part of everyday you start stockpiling some ingredients? more comfortable, and it’s
life in many Southeast Asian countries. Chinese
not necessarily conscious
manufacturers dominate the smartphone market, Yes, we’re prepared for
that that happens. So you
while TikTok, the short-form video app owned stockpiling ingredients
need to make sure that
by the Chinese company ByteDance Ltd., is ubiq- because our suppliers could
you’re consciously making
uitous. But unlike TikTok, which relies solely on have problems, too. We
decisions to get that
user-generated programming, IQiyi and Tencent start to look for temporary
diversity. You need to be
Video offer catalogs of TV shows and movies. To workers or increase our
more proactive, and I think
challenge Netflix and Disney, which provide huge workforce to make sure
setting quotas or setting
amounts of content from the U.S. and Europe, the that we can keep our supply
targets is one of the ways
Chinese companies will likely need to invest heavily chain going and our sales
you drive that change.
VICTOR J. BLUE/BLOOMBERG
in local programming and license top shows from
Korea and China. —Lucas Shaw
○ Interviews are edited for clarity and length. Listen to Bloomberg Businessweek With
THE BOTTOM LINE Streaming companies are expanding into Carol Massar and Jason Kelly, weekdays from 2 p.m. to 6 p.m. ET on Bloomberg Radio.
Southeast Asia. But most people in the region have an average
income of less than $10,000 a year, so pricing profitably is tough.The financial world
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Bloomberg Businessweek July 27, 2020
Inside the T
E
C
H
N
O
L
15
O
G
Y
● The Guillemot
brothers
Boys Club
KASIA WANDYCZ/PARIS MATCH/GETTY IMAGES
A sexual misconduct scandal at Ubisoft, the hitmaker
behind Assassin’s Creed, has disrupted its inner circle
Edited by
and incited calls for more drastic measures Jeff Muskus◼ TECHNOLOGY Bloomberg Businessweek July 27, 2020
Five brothers started Ubisoft Entertainment SA in in the form of inappropriate touching or other sex- “You complain
1986, and since then the video game company has ual advances, current and former employees say. about
survived seven generations of game consoles, four A spokesperson for Ubisoft declined to comment something, it
recessions, a hostile takeover bid from France’s larg- or arrange interviews for this story. Chief Executive just gets swept
est media conglomerate, and a global pandemic. Officer Yves Guillemot has promised extensive under the rug”
Ubisoft is one of the world’s largest game publish- changes and has taken steps that many staff once
ers, with blockbuster series such as Assassin’s Creed saw as unlikely. Those include the ousters of Serge
and Far Cry, and the Guillemot family still maintains Hascoët, chief creative officer and a close friend of
effective control. Now they face a new crisis: allega- Guillemot’s for decades, and the heads of HR and
tions of widespread sexual misconduct at the com- the Canadian studios. The former executives didn’t
pany. The situation has shaken up the founders’ respond to multiple requests for comment.
inner circle and raised major concerns about how “Ubisoft has fallen short in its obligation to guar-
the business was managed for well over a decade. antee a safe and inclusive workplace environment
More than a dozen people made public claims for its employees,” Guillemot said in a July 12 state-
of sexual harassment and abuse against employees ment announcing the executive departures. “This
of Ubisoft over the past few weeks. The outpour- is unacceptable, as toxic behaviors are in direct
ing is part of a broader #MeToo movement taking contrast to values on which I have never compro-
hold in the game industry, and the Parisian company mised—and never will. I am committed to imple-
has been the most frequent target of allegations. menting profound changes across the company to
Interviews with more than three dozen current or improve and strengthen our workplace culture.”
former Ubisoft employees indicate that these claims, Guillemot, the middle brother, has been CEO
and many others that haven’t previously come to since 1988; together, the siblings hold 21% of the
light, had been gathering dust in company logs for company’s stock and 5 of 12 board seats. The broth-
years. In some instances, Ubisoft took action, but ers speak weekly and hold regular get-togethers
for the most part, complaints were ignored, mishan- on their yacht, according to a 2016 article on the
16 dled, or undermined, employees say. French newswire AFP. The image of Ubisoft as
The accusations filed to Ubisoft’s human a family business was a source of inspiration for
resources department range from subtle forms many employees over the years. But others say the
of sexism to sexual assault, according to two peo- dynamic facilitated a culture in which longtime
ple with access to the reports. In interviews with staff, especially Hascoët and his team, were given
Bloomberg Businessweek, many employees detailed agency to misbehave. “There are golden children,”
an atmosphere that was hostile to women, often says Cindy Fitzpatrick, who worked in Ubisoft’s
describing the Paris headquarters as a frat house. public-relations department from 2005 to 2009.
Staff openly made misogynist or racist comments “No matter what they do, they seem untouchable.”
across the publisher’s various offices, and senior Several employees say they were pleasantly
executives took part and escalated the misconduct surprised, even shocked, by the company’s swift
◀ The Tom Clancy-
inspired Ghost Recon
series of games ranks
among Ubisoft’s most
enduring franchises◼ TECHNOLOGY Bloomberg Businessweek July 27, 2020
response once allegations were made public in An Industry Out of Balance
recent weeks. Hascoët was long seen as a perma- ◼ Male ◼ Female ◼ Nonbinary or other
nent fixture, they say, despite allegations that he
demeaned female subordinates and surrounded
himself with men accused of predatory behavior. 22% 24%
Many other employees expressed doubts that a 47%
company run by the same men who presided over
a toxic environment could deliver the type of sys-
temic changes needed to protect the women at Ubisoft workforce Games industry Video game players
Ubisoft, who are outnumbered about 4 to 1.
DATA: UBISOFT, INTERNATIONAL GAME DEVELOPERS ASSOCIATION, NEWZOO
“The culture there is really hard as a woman,”
says Ellen Lee, who worked in marketing and pro- attend those outings and said their careers suffered
motions at Ubisoft’s San Francisco office for seven as a result. They were frustrated to watch Hascoët
years. “If you weren’t part of the boys’ club, you promote many of his strip club buddies to creative
were just working hard on the outskirts.” directors, a group composed almost entirely of men.
The Guillemot brothers got their first tutorial on Allegations that Hascoët behaved inappropri-
business from their parents. The elder Guillemots ately around women extended to the office. In a
operated an agriculture business in Carentoir, meeting at Ubisoft’s headquarters in Paris, one of ▼ Ubisoft’s top series
drip testosterone
France, which sold chemicals, equipment parts, the top creative leads on a big game was present-
and, eventually, computers. Amid the economic ing to Hascoët and other decision-makers. When
recession of the early 1980s, business was on the the lead, a woman, left the room to use the bath-
decline. So, with their parents’ permission, the chil- room, Hascoët pulled up a YouTube video, accord-
dren began selling computer games at the shop to ing to two people present at the meeting. He played
farmers looking to put their new machines to use. a French song describing sexually explicit acts with
In 1988, the year Yves Guillemot was named CEO a woman who has the same name as the presenter. Assassin’s Creed:
Odyssey
of Ubisoft, the company hired Hascoët. He started He hit pause when the employee returned, say the 17
as a video game tester, a job he got by applying to two people, who requested that the woman’s name
a newspaper ad, according to a 2017 article in the not be printed. As was common in high-level meet-
French publication Le Monde. Hascoët later helped ings at Ubisoft, there were no other women present.
create Ubisoft’s editorial department, which super- Hascoët’s reputation had been well-known
vises every game. As head of creative, he oversaw around the company for years, say 10 people
the development of blockbuster franchises including who worked there over a period spanning more Far Cry 5
Assassin’s Creed, Far Cry, and Watch Dogs. than a decade. On July 10 the French newspaper
Hascoët was treated almost like a member of the Libération reported that Hascoët had allegedly
family. He was given ultimate authority to cancel, made sexually explicit comments to staff, pushed
greenlight, or overhaul any game to his specifica- subordinates to drink excessively, and given col-
tions. Project reviews would take place at a type leagues cakes containing marijuana without their
of meeting known within Ubisoft as “gates,” and knowledge. Because Hascoët appeared to be
Watch Dogs 2
Hascoët was usually the gatekeeper. immune to HR complaints, employees say they
Developers routinely swapped stories of inter- were forced to either find a way to work with him
actions with Hascoët, who they often portrayed as or seek employment elsewhere.
eccentric or worse, according to seven current or Allegations of harassment and sexism extended
former employees. During presentations he would far beyond Hascoët and his subordinates. In 2015
bang his head against the table, a sign that he was a group of staff in Sofia, Bulgaria, were watching a
bored or unhappy. He was infamous for what col- trailer for Star Wars: The Force Awakens featuring
leagues described as growling, a sort of guttural the actor John Boyega, who’s Black. “People just
noise he would direct at people in meetings or collectively went, ‘Hey, look, it’s a monkey,’” says
while passing in the hallway. Fey Vercuiel, a former designer on the team. In San
GHOST RECON: KYLE GRILLOT/BLOOMBERG
Three women who worked at Ubisoft say they’d Francisco, Dawn Le was instructed by her manager
been warned not to go out drinking with Hascoët to smile more and was later told she would be fired
and his crew. He sometimes held business meetings from her job as a purchasing specialist if her atti-
at strip clubs, a habit his deputies mimicked, say the tude didn’t improve, she says. Each woman reported
employees, who asked not to be identified because the incidents to HR, and their claims were dismissed
they are either still employed by Ubisoft or wor- without action. “You complain about something, it
ried about retribution. The women elected not to just gets swept under the rug,” Vercuiel says.◼ TECHNOLOGY Bloomberg Businessweek July 27, 2020
Nina Stewart was working at Ubisoft’s cus- be identified over concerns that speaking publicly ▼ Ubisoft market value
tomer service center in Morrisville, N.C., last would damage her career, says she reported all of
year when, she says, her manager started making the incidents to HR and nothing happened. Later €8b
strange comments to her. He would detail other she was told she’d have to move to a Ubisoft studio
women’s bodies in explicit ways and make deroga- in a different country. She did, and says she was fre-
tory comments about hers, she says. “He’d make quently told there “you can’t be a producer—you’re
sexist and fatphobic remarks about me to my whole a woman.” Less than a year after relocating, she quit. 4
team,” Stewart says. “Every time he’d say some- People who worked in Hascoët’s department
thing disgusting, I’d tell him that was inappropriate. describe pornographic videos on computers, boozy
I’d say, ‘That makes me uncomfortable.’” lunches, and a chorus of inappropriate jokes. Five
Stewart went to Ubisoft HR twice about her workers say they reported François to HR over the 0
manager, and both times she was told to “talk it past decade, some of them multiple times, for inci- 2001 2020
out” with him, she says. It was only after her third dents including sexual propositions and genital grab-
visit, she says, when a male co-worker corroborated bing. One former employee says they wrote an email
her claims, that the company removed her boss. “I to the CEO some years ago about problems with
received a thank-you card from HR,” Stewart says. François. Not long after, François was promoted.
Attached to the note was a $200 Visa gift card, she The machismo of Ubisoft’s offices seeps into the
says. She’s since left the company. company’s games, current and former employees
The Toronto office was especially problematic, say. Ubisoft’s biggest franchise is Assassin’s Creed,
six current or former employees there say. The stu- a series of open-world action-adventure games in
dio was run by Maxime Béland, his wife, Rima Brek,
and another husband-and-wife team. Brek served for
a time as interim director of HR, the people there
say. Two women who reported incidents to Brek
and other HR reps in Toronto say they felt ostracized
18 afterward and were labeled as troublemakers. Brek
didn’t respond to requests for comment.
Béland was a trusted lieutenant of the creative
chief. He was also known for his quick temper and a
tendency to scream at subordinates in meetings, say
four people who worked in the office. Two of those
people say they saw Béland touch women inappro-
priately at holiday parties and other work events.
Béland was also accused of choking an employee
at a party, according to the video game website which players explore historic settings and sneak ▲ CEO Yves Guillemot
Kotaku. The choking story was regularly shared around killing people. Most games in the series star
among staff in Toronto, say the people who worked male protagonists. This has been a point of conten-
there, as a warning about the executive. Béland tion as far back as 2014, when an Ubisoft creative
didn’t respond to multiple requests for comment. director said Assassin’s Creed Unity wouldn’t let peo-
Back in Paris, another one of Hascoët’s men ple play online as female characters because “it was
had developed a problematic reputation. Tommy really a lot of extra production work” to add wom-
François, a 13-year veteran of Ubisoft, openly flirted en’s clothing and animations to the game.
with subordinates, made homophobic jokes, and For the next game, Assassin’s Creed Syndicate, an
performed unwanted massages, say 10 people early outline of the script gave equal screen time to
who witnessed or were the subjects of his alleged the twin protagonists, Jacob and Evie, according to
abuses. François didn’t respond to requests for three people who worked on the project. In the end,
comment. Newcomers to the company were told it Jacob dominated the game. Assassin’s Creed Origins,
was “Tommy being Tommy,” the people say. released in 2017, was originally going to injure or kill
A woman who worked at headquarters says off its male hero, Bayek, early in the story and give
she faced repeated harassment there. Colleagues the player control of his wife, Aya, according to two
sent her sexually explicit messages, including por- people who worked on it. But Aya’s role gradually
nographic videos, she says. François, who was sev- shrank and Bayek became the lead instead.
eral levels above her on the org chart, asked her out Development of 2018’s Assassin’s Creed Odyssey
for a drink four or five times, and she refused each went much the same way. The game tells the story of
invitation, she says. The woman, who asked not to siblings Kassandra and Alexios. The team originally◼ TECHNOLOGY
proposed making the sister the only playable charac-
ter, say four people who worked on the game, until
they were told that wasn’t an option. The final prod-
uct gives players a choice between the two.
Current and former Ubisoft employees say these
changes, which haven’t been previously reported,
are illustrative of the sexism ingrained in the com-
pany. They came from the marketing department or
from Hascoët, both of whom suggested female pro-
tagonists wouldn’t sell, the developers say. This false
perception has been commonly held in the video A former member of Ubisoft’s HR team, who ▲ A recent Ghost
Recon release marked
game industry for decades. It ignores hits such as asked not to be identified because of concerns about a serious misstep for
the Tomb Raider series or Sony Corp.’s Horizon Zero legal repercussions, says management’s general dis- Ubisoft’s creative team
Dawn, which sold more than 10 million copies. trust of victims hindered the department’s ability
By 2019, there were signs Hascoët was losing his to address complaints. In recent weeks, Ubisoft
creative magic. Ubisoft released two big flops: The employees have submitted complaints detailing
Division 2, an online game that failed to meet sales repeated inappropriate jokes from colleagues,
expectations, and Ghost Recon Breakpoint, a tactical unwanted sexual propositions, groping at parties,
shooter that was widely panned. Ubisoft had devel- and sexual assault, according to two people who’ve
oped a reputation, in large part because of Hascoët, seen the reports. Some employees say they origi-
for releasing games with similar tropes. By the end nally filed some of these allegations years ago.
of last year, Ubisoft’s stock declined more than 40% On July 12, Ubisoft announced the departures
from its high a year earlier. of Hascoët; Cécile Cornet, global head of HR;
The company overhauled the editorial depart- and Yannis Mallat, managing director of Ubisoft’s
ment, elevating seven vice presidents reporting to Canadian studios. “The recent allegations that have
Hascoët. The goal was to distribute his power and come to light in Canada against multiple employees 19
diversify the games, employees say. All seven vice make it impossible for him to continue in this posi-
presidents were men. Béland and François were tion,” the company said in a statement about Mallat.
among those promoted, despite a history of mis- Ubisoft remains a family business, though. The com-
conduct complaints. pany replaced Mallat with Christophe Derennes,
The #MeToo movement didn’t sweep through another longtime employee. He’s the Guillemots’
the video game business the way it did in adjacent cousin, according to three employees.
industries of media and technology. It came in fits Kim Belair, a veteran narrative designer who’s ● Together, the
Guillemot brothers’
and starts over the past few years, perhaps impeded worked for Ubisoft and other game companies, share of Ubisoft’s
by the legacy of Gamergate and a pervasive hostil- calls the family-run company “a specifically diffi- stock stands at
21%
GUILLEMOT: TROY HARVEY/BLOOMBERG. EXPO: PATRICK T. FALLON/BLOOMBERG. DATA: COMPILED BY BLOOMBERG
ity toward women. But it had a big moment this cult example” of cultural issues because so many
summer, when dozens of women shared stories of the people at the top are so close. “The entire
on Twitter and in Medium posts of harassment and mindset of the company has to change,” Belair says.
sexual assault at the hands of game developers and “These bad actors were allowed to exist in this sys-
video streaming personalities. tem. We have to reevaluate this system. We have to
Béland and François were among the first men look at why this culture exists.”
named on Twitter. Ubisoft moved quickly in late One of Hascoët’s favorite buzzwords, accord-
June to place both on administrative leave, along ing to those who worked with him, is systemic.
with several other employees accused of wrongdo- In industry parlance, it describes a part of the
ing. Béland has since left the company, according gameplay with which the player can interact and
to Ubisoft. François’ employment status is unclear. experiment. Hascoët would frequently tell devel-
In emails to staff, Yves Guillemot promised big opers to strive for experiences that were systemic,
changes. He said the company would hire a con- employees say. The irony isn’t lost on current
sulting firm to audit and revise HR policies. “As staff, who agreed to discuss issues of sexual mis-
we collectively embark on a path leading to a bet- conduct under the condition of anonymity. As one
ter Ubisoft, it is my expectation that leaders across employee puts it: “At least we did succeed in being
the company manage their teams with the utmost systemic somewhere.” � Jason Schreier
respect,” he said in a statement. “I also expect them
THE BOTTOM LINE The same tight control that’s kept Ubisoft
to work to drive the change we need, always think- largely in family hands for decades also made it especially difficult
ing of what is best for Ubisoft and all its employees.” to unseat favored lieutenants repeatedly accused of abuse.You can also read
