American corporations didn’t want to diversify, anyway

At Ford Motor Company, the moral stock-taking began with a letter.

“This is an extraordinary moment in our history,” Bill Ford, the company’s executive chair, and Jim Hackett, its CEO, wrote to employees on 1 June 2020. It had been three months of upheaval since the coronavirus pandemic began and the company first suspended production at its manufacturing sites. By mid-May, more than 87,000 people in the United States had died from the virus. Then, on 25 May, the video of Derek Chauvin kneeling on George Floyd’s neck for nearly nine minutes, ultimately killing him, was seared into Americans’ consciousness.

Even in the midst of a global pandemic, as systemic inequities around healthcare and wealth and education were thrown into sharp relief, the world saw how deadly everyday injustices remained. “All at once, we are grappling with a public health crisis that has claimed hundreds of thousands of lives, an economic shock that has forced us to adapt on the fly, and social upheaval that has challenging all of us to think and act differently,” Ford and Hackett wrote. Globally, people wanted to do something, but they did not know exactly what. There were online gestures: Black squares on Instagram, direct messages of apology to Black friends, well-designed slides with digestible facts about systemic racism. But, as the video spread, millions flooded the streets as well. They rallied in Chicago, Minneapolis, Portland and Washington DC; and they protested overseas in London and Sydney and the Canary Islands. The actions were bolstered by calls to finally address the disparities that made the nation so inequitable.

C-suites and boardrooms and universities couldn’t look the other way. Colleges and hospitals began renaming buildings; activists toppled statues and busts of traitors and racists, politicians took down others; and across the country, institutions were pushed to evaluate how their policies had locked certain people out of the American dream. But now, as the Trump administration has brought back to the White House its war against a diversifying workforce, the federal infrastructure and a critical history of America, corporations are dropping diversity and equity programs as quickly as they created them.

How did we get here? Why were so many companies – from Walmart to Paramount to Victoria’s Secret – willing to roll over on their diversity goals after the promises they made in 2020 to uproot systemic racism and transform the nation? Were they all just paying lip service? In many ways, the programs were never intended to radically change the workplace in the first place – they were intended to appease workers and dampen discontent. What we’ve seen since 2020 is not new. It’s a reversal rooted in the policies the US created decades ago, when it cast aside the goal of addressing a legacy of discrimination for the vague idea of diversity – an idea that was always destined to fail, and an idea many corporations never truly believed in.

Superficial actions

For employees at Ford, which was founded in Detroit, where nearly three-quarters of the city’s residents are Black, there was nothing academic about the issues highlighted in 2020. The pandemic hit the city as the plague of racism had left it economically distraught for decades; healing the disease systemic discrimination had left would require effort and intention. “There are no easy answers. We are not interested in superficial actions. This is our moment to lead from the front and fully commit to creating the fair, just and inclusive culture that our employees deserve,” Ford and Hackett wrote.

Ford’s first step to healing was a series of conversations with staff to better understand how they felt. They would launch employee resource groups to ensure workers believed they could be their whole selves at the office. “We know that systemic racism still exists despite the progress that has been made,” the Ford executives wrote. “We cannot turn a blind eye to it or accept some sense of ‘order’ that’s based on oppression.”

If that sounds familiar, it’s because offices across the country were undergoing similar soul-searching efforts. Within a year of Floyd’s murder, companies had pledged at least $50bn to support racial justice and advance equity and by 2023 that number had jumped to more than $340bn, according to a report by the McKinsey Institute for Black Economic Mobility. Companies such as Apple, Facebook and Pfizer committed to spending externally. Bank of America pledged $15bn to expanding low- and middle-income homeownership; Netflix, PayPal and Nike deposited millions in Black-owned banks; and other companies gave to organizations such as the Equal Justice Initiative. Corporations committed to internal changes, too: they set diversity goals and launched initiatives to try to meet them; they hired chief diversity officers; they held mandatory – if sometimes clumsy – anti-discrimination trainings. Most of these tools had existed in some form before, but amid public outcry, they were pushed to the foreground.

The problem was that even when companies actually wanted to help, they often launched their efforts haphazardly. When companies jump to solutions before understanding the desired outcomes, they make rushed decisions, said Eddy Ng, a business professor at Queen’s University, in Canada. “Without a clear plan, we go buy more training. People don’t like that,” Ng said. Company leaders had little idea how to fix the structural issues baked into their DNA, so they went with the things that sounded good. “It’s like you go grocery shopping with 100 bucks, but you don’t have a shopping list. You’re going to buy chips and cookies,” Ng told me.

Chips and cookies can make a person feel full, they can hold someone over, but eventually there’s a crash – and that person will be left wondering why they have not actually had a full meal; why they are not satisfied. Within weeks, it seemed, companies had built out their diversity, equity and inclusion plans. But not everyone was convinced by them. “Someone like me might say, ‘let’s wait and see if they mean it,’” said Cedric Dawkins, an associate professor of management at York University who studies business ethics. Marginalized communities have felt the sting of America’s empty promises before.

Progress in the US is always met with pushback. During Reconstruction, the so-called “Redeemers” – who sought a return of white supremacy – argued that federal support for recently enslaved African Americans was a threat to their liberty. The civil rights movement was immediately met with lawsuits that would limit its desired effects on voting, education and labor. In that context, the only real measure of an organization’s commitment to justice is whether they keep pushing forward with their reforms in spite of any backlash.

When corporations launched their plans, they felt like drastic measures, Ng said, “instead of actually having clear guidelines and goals and outcomes in terms of what they wanted to achieve over the five-year period.” Now, as we come to the end of the five-year period – and companies begin to roll back their diversity efforts, vindicating those who were waiting for the other shoe to drop – one question remains: what was it all for?

The backlash begins

On 6 March 1961, President John F Kennedy signed executive order 10925 – which created the president’s committee on equal opportunity. “Americans who are members of minority groups have often been unjustly denied the opportunity to work for the government or for government contractors,” Kennedy wrote in his signing statement. He directed the committee to launch a study of government employment practices that would examine the “status of members of minority groups in every department, agency and office of the federal government”. The report would lay down a marker, Kennedy hoped, by which Americans could measure future progress. “I have no doubt that the vigorous enforcement of this order will mean the end of such discrimination.”

John F Kennedy’s 1961 executive order was the first example of affirmative action as we understand it today. Composite: The Guardian/Getty Images

Typically, Kennedy’s order is where histories of affirmative action or race-conscious employment practices begin – after all, it’s the first time the idea of affirmative action as we understand it today emerged. But federal action to address discrimination in the workforce actually stretches back to at least Franklin D Roosevelt’s New Deal, and one New Deal policy in particular: the 1935 Labor Relations Act. The act protected the rights of employees at private companies to better working conditions. If a company engaged in unfair labor practices, employees were “entitled to affirmative action as a remedy to make the employee whole”, said D Caleb Smith, a labor historian at Mount Holyoke College. Those remedies could look like job reinstatement or back-pay. Essentially, the provision was a general remedy to employment discrimination.

But the Labor Relations Act was also a mixed bag. The National Urban League and NAACP opposed the legislation because it provided for closed-shop provisions that allowed unions and employers to exclude workers from union membership and apprenticeship programs. Union race discrimination had historically limited Black participation in the workforce: in 1930, for instance, just 3% of the 3,392,800 trade union workers in the US were Black.

Still, it was a starting point, and over time, additional protections were added. In May 1943, executive order 9346 reconstituted the fair employment practices committee, which processed 8,000 discrimination complaints in its three years of existence. And in 1947, the Taft-Hartley Act prohibited the closed-shop provision from the New Deal policy. By 1960, however, affirmative action still did not have a formal definition. “It is implied that it’s the intent to improve working conditions to create opportunity for underrepresented minority groups,” Smith said. Kennedy helped provide some unity of definition.

Kennedy’s order created one of the earliest affirmative action programs, the Plans for Progress Program, which encouraged companies to develop plans that addressed discrimination and underrepresentation of minorities. Within the first few months, the committee on equal opportunity reported that the program was in full swing. Agencies had begun designating compliance officers and developing training seminars; they had studied best practices for compliance reporting; and they had launched outreach to contractors and the general public. But “the Plans for Progress Program is largely seen as a performative publicity endeavor,” Smith said. It was done in good faith, he added, but it was hampered by the same problems other compliance agencies had: it was understaffed, underfinanced and could not exercise its full authority. For its imperfections, though, “some historians will point to it as a positive that provides companies a model for desegregation and implementing equal employment opportunity,” Smith said.

By January 1964, after Kennedy’s assassination, President Lyndon Johnson took over the reins and carried out Kennedy’s vision. In a speech to new corporate members of the Plans for Progress program, Johnson announced that it had largely been a success. More than 100 major corporations – representing 6 million workers – had bought into the program, he told those assembled. The ratio of white salaried employees to non-white salaried employees at 91 companies had dipped from 65 to one to 60 to one. “Most significant is the fact that these jobs are not all at the lowest level – Negroes and other minority group Americans are being placed and promoted to positions of responsibility,” Johnson gushed. “This was not accomplished by displacing other workers – rather it was the result of conscious adjustments in personnel practices making merit and ability the only real tests – practices that strengthened the individual companies, and, as a result, strengthen our entire economy.”

But some companies and federal contractors began creating measures to subvert the new federal rules, Smith told me. They implemented new tests for employees and had segregated seniority lines – white people occupied positions of power; contrary to the pronouncement, Black people were still often consigned to the lower rungs of industry. After Johnson signed the 1964 Civil Rights Act – and executive order 11246 a year later, which created the office of federal contract compliance to ensure contractors and subcontractors were complying with requirements to “safeguard equal employment” through affirmative action programs – the backlash was almost immediate.

White people began claiming the programs were reverse discrimination and sued in federal court over college admissions, hiring and promotion practices. The supreme court upheld certain provisions of affirmative action programs – such as diversity as a compelling interest – but argued that quota systems designed to account for a legacy of discrimination in the US were a bridge too far. The Reagan administration sought to eliminate affirmative action altogether, and was surprised when corporations fought back. Companies such as Merck had begun to believe in their affirmative action policies – a new crop of workers brought new ideas and introduced products to new markets. It was great development philosophically – for those who cared about addressing a legacy of discrimination – and financially, for those who were more ambivalent. As Julian Mark noted in the Washington Post, a survey of 128 Fortune 500 companies revealed that an overwhelming majority, 95%, would keep their affirmative action policies regardless of Reagan’s policy.

Reagan was ultimately unsuccessful – in part because he was largely alone in his efforts, even among Republicans. Still, his push to eliminate affirmative action programs led many corporations to settle for policies aimed at promoting a diverse workforce rather than addressing injustice. Such policies, they believed, had less legal exposure. The result was a new crop of watered-down programs that were a far cry from those that preceded them.

Some conservatives agreed with Reagan, and as the decade wore on, became a loud contingent of the Republican party. Through the 1980s and the 90s, Republicans began using judicial appointments to transform the federal bench and pursue litigation to reshape civil rights law – warping its meaning. They argued that even watered down affirmative action programs and civil rights measures had gone too far; they wanted them eliminated altogether. Conservatives lionized the leaders of California’s Proposition 209, which banned affirmative action in public education and employment in 1996. The California Civil Rights Initiative “is the beginning of the new civil rights revolution in America; a revolution that promises to unite all America under a banner of hope and freedom”, Gay Hart Gaines, the former president of GOPAC, the Republican donor group, said at the time. Philanthropic organizations such as the Bradley Foundation, Scaife Foundations and Searle Freedom Trust bankrolled challenges to race-conscious admissions at universities and efforts that ultimately gutted the Voting Rights Act. Reagan lost his initial battle, but conservatives saw it as the first shot fired in a longer war – a war they believe, in 2025, is paying off.

The capitulation

Less than two months after Hackett, the Ford CEO, sent the letter lambasting systemic racism to the company’s employees, he stepped down from his position. Jim Farley, an executive from within, replaced him. In August 2024, ahead of the election, Farley wrote a letter of his own to the staff about diversity, equity and inclusion.

“As we work to build an even brighter future, we are mindful that our employees and customers hold a wide range of beliefs, and the external and legal environment related to political and social issues continues to evolve,” Farley wrote. It was a very elaborate way of telling staff that they would be walking back diversity policies because the political winds had shifted. George Floyd’s murder had receded from the national consciousness. The Republican party had seized upon the language of DEI and turned it into a catch-all symbol for the ways the US was diversifying and becoming less tolerant to sexism, racism, ableism and homophobia.

The company would no longer comment on “polarizing issues”. Its philanthropic arm’s mission changed from “[providing] access to resources and opportunities that build equity and empower underserved and underrepresented communities to reach their highest potential” to “[partnering] with communities to move people forward and upward”. And Ford would stop contributing to external culture surveys like the Human Rights Campaign’s Corporate Equality Index. The fresh look at Ford’s policies said nothing – save for vague allusions to the benefits of diversity – about systemic racism. Hackett’s earlier declaration that Ford would not “turn a blind eye” to systemic racism seemed but a memory.

Within days of taking office, Donald Trump signed an executive order that would eliminate Johnson’s civil rights order. The order directed the office of federal contract compliance to stop “promoting diversity” and holding contractors responsible for “affirmative action”. To Smith, the administration’s early actions amount to “a blatant effort in order to not only uphold the white power structure, but to remove any government responsibility to uphold the rights of individuals of color, specifically Black people”. It is the fruit of a conservative movement that has been trying to reverse course ever since the government began taking seriously efforts to protect the rights of Americans regardless of race, sex, religion or national origin.

In 2020, hundreds of private companies pledged to change their culture – to use their power and influence and, most importantly, money, to re-shape American society toward more just ends. Now, the three largest employers in the nation – Walmart, Amazon, and the federal government – have all rolled those policies back. Dozens of other corporations have turned back the clock on even pretending to care about equality in the workplace as well.

To businesses’ credit, they had a difficult task ahead of them in 2020. “They’re faced with putting a policy in place quickly that’s responsive and doesn’t sound like lip service to frustrated people,” Dawkins said. But in doing so, they made an admission: they had not been taking diversity seriously before – and the capitulation to the administration’s demands since has betrayed that truth. And they made clear their efforts were always lip service.

When corporations pushed back against Reagan in the 80s, they had the public on their side – and even a significant chunk of the Republican caucus – for at least the valence of effort. Most of the pressure was coming from Reagan himself. But when they felt the united political pressure from conservatives this time around, in the absence of near-universal public support, they had a choice to make.

For companies whose values course through everything they do, the choice was easy. As Dawkins, of York University, explained: “A company like Patagonia – which challenged the first Trump administration over environmental regulations – or Ben and Jerry’s, they’ve been in this for the long haul so it doesn’t change as much.” But organizations who opted for expediency – programs to pacify rather than any transformational interrogation of institutional culture and values – capitulated.

Values are only as good as their durability under pressure; and many of America’s largest companies proved an equitable, inclusive workplace was never one of their core values to begin with.