General Motors’ self-driving division Cruise has been faced with a wave of setbacks after a pedestrian was unintentionally trapped under a Cruise AV unit, leading to an NHTSA investigation and a California DMV driverless permit suspension. In light of this, it appears as though some investors in the self-driving company are losing confidence in the efficacy of the technology and the direction GM is taking with its subsidiary.
According to a report from Reuters, Honda claimed that it had no plans to put up more money for Cruise after the subsidiary paused all operations across the United States. As of the end of September 2023, Cruise had $1.7 billion in reserves, meaning it could sustain itself for roughly nine months.
It’s worth noting that Cruise has lost $8 billion in operations since the 2017 calendar year.
“I think it’s a bit of a black hole,” Pzena Investment Management Analyst Lawrence Paustian stated. “It wasn’t too long ago people were really hyped about autonomous and they saw Cruise as this valuable asset. Now everyone’s looking at it as a liability.”
As a result, a law firm will probe GM and Cruise LLC on behalf of investors over concerns that company officers and directors have “engaged in securities fraud or other unlawful business practices.” In addition, General Motors’ stock price plummeted 10 percent last week.
Of course, this all comes as GM announced a round of layoffs for select Cruise contractual workers. More specially, a portion of the workers who helped with cleaning the vehicles, fleet charging and fielding customer support inquiries have been relieved of its duties.
The robotaxi company explained that the layoffs are reflective of its current operations, which have been drastically reduced, although some rides are continuing with a safety driver on board. Cruise will eventually resume its driverless robotaxi service, but has yet to possess a solid timeline.
In the interim, Cruise recently announced a recall to update the collision detection system in its Cruise AV robotaxis, which now provides provisions in the case of another pedestrian-related incident. It also hired an external firm to investigate the company’s response to recent events.
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Comments
Cruise isn’t contributing to GM stock value and therefore should be spun off. It has proven not to be a long-term game changer or value added. I understand Barra wanting to hold Cruise as an in house tech incubator; the tech is no longer cutting edge and offerings like Super Cruise are not helping Cadillac.
How long have some us been saying this this is boondoggle and a massive waste of money! GM needs new leadership now!!!
Did you really expect anything different from Roger Smith in a pantsuit? Hopefully Michael Moore has one more documentary left in him!
“Cruise has lost $8 billion in operations since the 2017 calendar year.”
Hello Board of Directors….is anyone home? Is anyone holding management accountable at all?
Cut your losses, add EV’s to that heap, and then pass the savings onto the struggling consumer, rebuild market share. GM back in the 60’s had almost 60% market share. Become the family’s car again. Serve your customers, and they will serve you.
Market share means nothing if the company is not profitable. Investors are looking for return on their invested money not for bragging rights about the market share of the company they are invested in.
They better be questioning the viability of EV’s. Not one has an answer for the elephant in the room. How much is the battery or the cell down the road. No one at GM will address it. It always a bunch of double talk BS.
Zero, Zero, Zero, ZERO!
Zero Crashes + Zero Emissions + Zero Congestion = ZERO Dollar Stock Price?
Spending billions in this garbage but needed a strike to pay employees building vehicles. Many that seem either never get built or are wrong. Sad.
I wonder what other things General Motors could have done with that $8 billion?
First Argo folded, now Cruise needs to go. Tesla is the only company putting enough into self-driving to succeed, but even they will never make a nickel with robo taxis. No car manufacturer will want to pay for every accident, and that’s going be a obvious requirement.
GM sold Opel–perfect distribution for it’s up and coming EVs & nearly profitable when given to PSA, in order to swallow the losses of Cruise.
Honda not investing more is a big sign Cruise needs to be spun off as GM’s former CFO begged. As a stand alone company Cruise could merge with other firms focused on this technology. GM could hold 20% to get access to any breakthrough.
Barra is a disappointment. All she knows hi ow to do is marketing gimmicks with names like Ultium and Cruise that lack substance
Stubbornness consequences. Unbelievable that this keeps going!!!