GM is going to cut back on self-driving cruise units
General Motors is slowing the expansion of its Cruise automated driving division and significantly cutting spending after suspending operations in response to growing safety concerns about its self-driving cars.
The company planned to roll out a ride-hailing service in San Francisco and three other cities and test cruise vehicles on the streets of several other markets. It now plans to focus on just one city as it works to improve the operation of its fleet of self-driving vehicles it has been testing.
“We expect Cruise’s pace of expansion to be more deliberate as operations resume, resulting in materially lower spending in 2024 than in 2023,” GM CEO Mary T. Barra said at an investor conference on Wednesday. “We must rebuild trust with regulators at the local, state and federal levels, as well as with first responders and the communities in which Cruise will operate.”
Last month, California regulators suspended Cruise’s license to operate in the state following an incident in which a Cruise self-driving vehicle in San Francisco ran over a pedestrian struck by another car, dragging her for 20 feet.
The company responded by taking all its self-driving vehicles off the road, citing the need to regain public trust.
Ms. Barra did not say what impact the drop in spending would have on Cruise’s workforce. She said the company would provide more details after it reviewed independent safety reports on the San Francisco incident.
In her speech, Ms. Barra said GM remained optimistic about Cruise’s future. “What Cruise has accomplished in the eight years since we acquired the company is remarkable,” she said. “Our priority now is to focus the team on safety, transparency and accountability.”
Founded in 2013 and purchased by GM in 2016, Cruise is one of several startups that have been working to develop self-driving cars with the goal of creating driverless taxi companies in cities across the United States. One of its rivals is Waymo, owned by Alphabet, Google’s parent company.
Cruise has tested self-driving taxi services in San Francisco; Phoenix; Houston; and Austin, Texas; and it has tested its autonomous vehicles in six other cities, including Nashville and Seattle. In August, California regulators approved a measure to make Cruise and Waymo charge 24 hours a day for their driverless services in San Francisco after more than a year of operating on a limited scale.
But in San Francisco, city officials, firefighters and police officers said Cruise’s self-driving cars posed safety risks and caused congestion by blocking fire trucks, stopping in the middle of busy streets and delaying firefighters’ responses to save lives.
Early this month, Cruise suspended a share buyback program after saying its valuation had changed. The suspension of the buyback program was previously reported by Reuters.
On November 19, Cruise CEO and company founder Kyle Vogt resigned. Dan Kan, the Chief Product Officer, later resigned. Cruise has not named a replacement for Mr. Vogt.
In an email to Cruise employees at the time, Ms. Barra said she and the rest of Cruise’s board were “focused on positioning Cruise for long-term success,” adding: “Public trust is essential to this . As we work to rebuild that trust, safety, transparency and accountability will be our North Stars.”