The Breakdown of Cruise, a Robot-Axiom, Machine Learning, and Computational Safety: Inquiry into the Perils of Time and Money
GM expects to achieve cost savings of $1 billion per year when it acquires the rest of the shares, according to their chief financial officer.
It is expected that layoffs at Cruise will be a result of GM’s move. What is clear is that Cruise’s testing in Arizona and Texas will pause as the company decides its next move. GM will need to repurchase its remaining shares of Cruise (the automaker owns 90 percent of the company), and then Cruise’s board will determine the next steps, which include restructuring, layoffs, or simply shutting down.
Critics said that the incident was a sign of a flawed approach to safety. The fines the company paid were related to the incident. Nine top executives and company founder and CEO Kyle Vogt left, and eventually GM laid off nearly a quarter of Cruise’s employees. Cruise began limited testing in a handful of cities this summer but never again returned to offering Uber-like service.
Ultimately, the project became too expensive for GM to justify the huge amounts of money spent to prop it up. And the automaker found it increasingly difficult to convince its shareholders that the money-losing operation would eventually pay off. The robotaxi subsidiary lost a staggering $3.48 billion in 2023 and has been seen by some as an albatross for the automaker, sucking up cash and lacking a clear path to profits.
“Given the considerable time and expense required to scale a robotaxi business in an increasingly competitive market, combining forces would be more efficient and therefore consistent with our capital allocation priorities,” Barra said on the call.
What Will the Future of Super Cruise in GM Tell Us About It? Analysis of the Company’s Ownership of the GM Super Cruise Technology
Cruise technology will now be used to refine the company’s Super Cruise tech, which is designed to perform some “hands-free” driving tasks—lane keeping, lane changing, and emergency braking—on specific highways. Drivers are warned to always stay alert while using Super Cruise, which cannot drive “autonomously.”
Eventually, GM intends to sell “level 4” vehicles to car buyers, which can drive completely autonomously on some but not all roads. “We know people everywhere love to drive their own vehicles, but not in every situation,” Barra told analysts.
General Motors owns 90 percent of Cruise and says it has reached an agreement with other shareholders to own more than 97 percent of the firm. GM will “restructure and refocus” the Cruise as part of the effort, but it is not clear if that will lead to layoffs.