General Motors CEO Mary Barra dismissed Cruise CEO Dan Ammann after the two disagreed on which direction to steer the self-driving startup in, according to a report from Bloomberg.
Amman was appointed CEO of the San Francisco-based autonomous driving startup in 2018 after GM purchased the company for over $500 million two years prior. Under Ammann’s leadership, Cruise deployed hundreds of self-driving prototypes on public roads in San Francisco, unveiled its Cruise Origin robotaxi and grew its employee roster from around 1,000 people in March 2019 to over 1,800 today.
Dan Ammann (far right) with Cruise executives Dan Kan and Kyle Vogt
Ammann was quietly dismissed from his post earlier this month, and according to Bloomberg, his sudden departure was due to a disagreement with Barra. While Mary Barra wanted to keep Cruise in-house and use its know-how to apply self-driving technology to production Cadillac and BrightDrop products, Dan Ammann wanted to spin the company off in an IPO and keep it focused on launching its own self-driving robotaxi business first and foremost. As Bloomberg writes, when Ammann “didn’t fall in line with that vision, it was over.”
A November meeting in which Barra laid out her vision for Cruise ultimately spelled the end for Ammann. Barra made it clear in the meeting that Cruise’s main purpose was to develop self-driving technology for GM, giving more value to GM shareholders, but Ammann kept pushing for the IPO and wanted more power to decide where the company should focus its time and resources going forward.
Barra later consulted with the GM board on Ammann’s future on December 7th before dismissing him on December 16th. The automaker put out a press release that day entitled ‘Leadership Changes at Cruise’, which unlike other similar GM media releases announcing executive departures, did not include any praise for Ammann and did not thank him for his service. The release also seemed to reference Ammann’s desire for Cruise to be spun off from GM, pointing out the advantages of the two entities remaining as one.
“By continuing to work together, GM and Cruise bring massive manufacturing and technological scale to autonomy that will rapidly drive costs down,” the press release said. “The integrated strategy will also maximize GM and Cruise’s total addressable market by leveraging synergies, leading to greater, more sustainable value for both GM and Cruise shareholders.”
GM CEO Mary Barra
When he left GM for Cruise, Ammann was given a compensation package that would have entitled him to receive $25.6 million in restricted stock if he executed an IPO, Bloomberg’s report also said. This would suggest GM was or still is interested in eventually spinning Cruise off in an IPO, but believed Ammann’s timing wasn’t right.
Kyle Vogt, Cruise founder, President and Chief Technical Officer, is currently serving as interim CEO of Cruise, but allegedly has no interest in maintaining the title going forward. A replacement for Ammann has not yet been named.
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Comments
Question #1 If Ammann is out who says he can’t go to Ford or somebody else?? He has all the stocks from GM. Question #2 Mary Barra doesn’t understand GM just bought a E-Boat company along with other smaller company’s that will be use in the future for autonomous stuff down the road?? For me this world is getting way to Tech. to fast, I came up on the Transiter radio and then brick phones along with 45″s.
Generally most contracts of hire have provisions that deal with these issues.
#1 Non compete clause, #2 if he does leave he has to sell stock or who he can sell too.
The real questions are how well developed these technologies become and dealing with the legal aspects of them. There is much to decide yet here. Things like shuttles on private property or mining equipment is easy. The trouble is on public roads where you mix human and technology who is responsible when not if things go wrong.
Cruise is a San Francisco company and non-competes are unenforceable under California law. (This is a key reason why all the startups are in the Silicon Valley and not Detroit)
Ammann’s contract was structured to give him a lot of incentives for spinning off Cruise so it was in his best interest to do so. gm then changed direction.
They bought into/invested in the E-Boat company to spread their ultium battery technology, it has nothing to do with Autonomous tech.
Steer Cruise directly to the toilet and flushhhhhhhhhhhhhhh!
Million percent positive Mary knows GM pretty damn well having been there since the 80s and worked from very close to bottom to all the way to the top. Knock it off.
Why are some are making it a big deal. If you don’t align yourself with the company’s direction or vision, you are free to go. This happens everyday everywhere. .End of story!
What does “why are some are making it a big deal mean”?
Seems that Reuss wants Cruise for himself and mainstream GM products. Not the craziest idea by any means, but should be judged through the lens of whether this is best for GM shareholders.
Cadillac has had SuperCruise for 5 years and it has gone nowhere. It is a great system, but the undeniable fact is that people just don’t want to drive a Cadillac (outside of Escalade). Full stop.
As each OEM is now rolling out their EVs, GM is now caught flat-footed. The Hummer EV in the high trim spec has not sold that well (limited to 1,200 units and low spec models moved up), the Bolt is not being built, and the Silverado is way behind the Ford Lightning.
I am surprised that for all the bravado GM has been talking about in their pivot to EV, they simply aren’t performing. Ford is way ahead of them.
If I were the GM Board, I would be asking Mary and Mark some tough questions.
Ford is not way ahead of GM at all, they have one Truck product that will only have about 15k unites built in a year and is based on an obsolete ICE platform that does not provide them enough room for a large battery or many other capabilities a dedicated platform gives. By the end of 2022 Ford still will not have a complete battery factory for supply and GM will.
GM is producing 1200 Hummers for dealerships specifically, we don’t know the true number of EV1 sales yet, there was a recent dealership meeting that clarified this. The EV3X will be available in Fall 2022 followed by the Silverado and then the Sierra and Hummer SUV, and also the Lyriq.
GM will also have several other products introduced and in full production by 2022/23 including their Bright Drop Vans and the Celestiq in 23.
GM will be sharing more of their vehicles this coming CES.
The Mustang Mach E is a hit and the Lightning has 100,000+ reservations. In comparison, GM tells everybody the Lyriq and Hummer EV are “sold out” but won’t release any numbers.
Mary and Mark are spending too much time spinning Wall Street while everybody else is rolling out their EVs.
This is becoming a problem. Oh, and if reports are true, Kyle Vogt refused the CEO job and so did the recently hired COO. What does this tell you? No bueno.
i’d rather have vogt on the technical side than doing whatever ammann was doing … which seemed to be trying to spac cruise and cashing out.
Wow 1200 hummers wow that’s such a huge number how cool. gm is so innovating 🙄
Reuss needs Cruise to drive his Corvette for him. 😉
The Lightning is a stop gap model, this is not on their long term EV truck platform which is still in development. GM meanwhile is currently launching their full blown dedicated EV platforms. So yes their mainstream truck is a little behind Ford’s (and their Hummer flagship is ahead of Ford), but they took the time to move to the long term platform instead of spending time making an interim model. 2 different strategies, but wouldn’t say either one is flat footed.
I would say Ford is ahead with their MachE, GM doesn’t have a good mainstream car/SUV yet. I always saw the Bolt as a test platform for their ‘real’ EV products to come. However, GM is already delivering the Brightdrop vans, Ford’s ETransit is not yet available. Overall they are very competitive with each other.
I don’t disagree that Cruise boosts GM’s overall market value and serves as great collateral should the company need to increase it’s line of credit.
I understand Brightdrop benefitting from Cruise technology but Cadillac is a dead end that will be every bit as troubled decked out with more Cruise, Untium and the new naming nomenclature. GMC would be a better fit for Super Cruise as would a tighter alliance with Honda and it’s Acura brand.
GM needs to look at talent overlooked by Stellantis NA such as Reid Bigland, Tim Kiniskis and Autonation’s Mike Manly if they want to give Cadillac one last try. How they rebuilt FCA is exactly what old car building GM needs.
Mary like other women CEO is going to ruin GM with pandering to leftist wet dreams and wall street “priorities”. I wouldn’t take a job with GM C-suite with her at the helm because I’d get broomed when she gets her ass fired. Better to wait out for the implosion and pick up the pieces.
If you get offered a job with the GM C-suite please let us know! 😉
Software that survives is usually the one that has the most adoption. Some of the guys might remember betamax, a file format that Sony developed and kept for themselves. When JVC invited the VHS format they licensed it to all electronic manufactures. Pretty clear what the right choice was.
I think this decision will pan out as a mistake.
The economics of EV robotaxis are that they will be cheaper per mile to use than private vehicle ownership. Once robotaxi services gain traction, private vehicle sales will plummet. Most folks buy a car to get them to work and back, but if there was an alternative that was either more reliable, convenient, or cheaper, they’d go with that. A robotaxi subscription plan could be cheaper while being just as reliable and convenient. Cruise could become a profitable service, while GM’s business of selling privately owned vehicles is looking at a bleak future.
I’m betting both Ammon and Barra know this.
GM is looking at declining sales and profits, while demand for the Origin for Cruise operation will grow significantly.
Cruise is looking at exponential growth, city by city, across the US.
If Cruise is spun off, they can grow without GM’s decline dragging them down.
If GM let Cruise spin off, they would become a pocket manufacturer for Cruise.
So, instead, GM booted Ammon in order to keep Cruise attached to GM like an emergency flotation device. But it also sounds like instead of doubling down on expanding Cruise’s business and transitioning their focus from private vehicles to robotaxi services, GM will be trying to shove Cruise’s AV tech into their private vehicle lineup..
Meanwhile, robotaxi services will still be out there, making private vehicle ownership a lot like still owning vinyl records in the era of streaming music services.
My estimates of either GM or Cruise surviving just dropped significantly.
oh my god!!!! i’m going to sell my gm shares tomorrow. thanks for the tip.
I think that anyone who now has, and can afford their own vehicles are stupid fools to give them up. You are essentially handing over your freedom to a company that will be on the government’s puppet strings. I could get onto other disadvantages of AVs including reliability and cleanliness among them. I think AVs will have limited applications like short distance shuttles and deliveries. But as every person’s daily mode of transportation, not in my lifetime.
Right on, Tigger!
You really think robotaxis are a viable business?
It’s hard to predict how automotive technology, combined with electric, will impact the future of transportation. I’m sure the auto companies, and investors, are working overtime to figure this out – what the future holds for AV and EV.
As the great sage Yogi Berra once said, “Predictions are very hard, especially about the future”.
GM needs to get AV out ASAP. They did about ZERO marketing in support of Super Cruise, which I think was a big mistake. They are taking too long to produce EV in volume, and too long to get Super Cruise, Ultra Cruise, and Cruise AV/taxi out. Yes, I know they have to be careful, but others are not waiting for GM – Waymo, Ford, others, are working very hard on AV. Right now, AV could prove a significant competitive advantage for GM. Right now, all GM has done is produce PowerPoint presentations.
They need to get product out the door before anyone else. Execute. Execute. Execute. Get it done, and done before others. I think GM will do it, but that’s a guess, and a hope. Execute on the promise.
LOL Produce power point presentations?? Cruise has done way more than just that… LOL for Cruise they have been advertising it a lot in it’s markets and on its youtube page. Traditional advertising isn’t always the answer.
Cruise is at the same level as Waymo in it’s abilities.
here have a video:
I’m not impressed
People are not interested in AVs unless it is a “last mile” endeavor. People are concerned about what they can buy NOW. gm is so focused on “what ifs” that core product like Malibu and Equinox have been allowed to die on the vine. If you do not offer compelling product in today’s most basic segments, how do you expect customers to break down the door for EVs? Cruise is a drain on gm and they would have been better off spinning it off while keeping a share of ownership to have access to relevant new technology for today’s car buyer.
I can not wait until GM gets all pick-ups assembly plants to change over to the new 22 editions, all Traverse size crossovers change over to new editions, all equinox plants too. I want to see how GM sales will perform when all new editions are complete and the plants pumping them out at full capacity. I will purchase a new edition pick-up because I love the new interior job GM is installing. This will tell if GM will win back market share in the ICE autos going forward. We all know ICE will carry the load over the next 4 years, and whoever can etch out a win will have the profit monies to move forward into AV/EV autos. EV/AV may get most of the talk but ICE will carry all the profit load over the next 4 years. Cruise also will need the profit monies from ICE manufacturing, as it will continue to be a burdensome business. I do not know which way would have benefitted GM the most with Cruise, I do hope and wish GM all good fortunes, for I do believe what is good for American-made autos companies is also good for America. The companies and their suppliers employ a lot of Americans.
Dump the stock!
There’s a reason why companies have one CEO. If a senior leader disagrees with the CEO on a fundamental business strategy, which is the case here as the article points out, that person should not expect to stick around in the company.
All companies operate this way so criticizing Barra for doing just that is just the Barra haters frothing again.
GM is doomed like a sinking ship with her. I saw no light and hope as a former employee. Spinning out Cruise would have been a brilliant move which might actually give GM some hope to survive in the next 3-5 years. Now it’s a lose-lose.