Microsoft expects an $800 million impairment charge as the result of GM’s decision to end Cruise robotaxi operations. The impairment charge is expected in the second quarter of the 2025 calendar year, with Microsoft stating that the impairment charge would have a negative impact of roughly 9 cents in Q2 earnings per share.
The $800 million impairment charge was outlined in a filing made Wednesday, per a report from Reuters.
For those readers who may be unaware, an impairment charge is an accounting process whereby a business writes off a non-cash expense that occurs when an asset has lost value or is a total loss. Impairment can occur in a variety of circumstances, including legal, economic, technological, loss of reputation, or some unforeseen hazard.
Microsoft acquired a minority stake in Cruise in 2021 with a combined new equity investment over $2 billion, which included investors like Honda.
The impairment charge filing follows a surprise announcement made on Tuesday that GM would refocus Cruise autonomous driving technology development efforts on personal vehicles, rather than continuing the pursuit of fully autonomous robotaxis. During a conference call with media, GM said that pursuing a robotaxi business was not sustainable in light of “the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.”
GM acquired Cruise in 2016, and has sunk over $10 billion in investments into the company. Per previous GM Authority coverage, the automaker indefinitely paused production of the Cruise Origin robotaxi in July, while a slew of Origin robotaxi production units were seen in storage at the automaker’s Milford Proving Ground this past September.
GM will now work to absorb Cruise in a process set to be completed by the second quarter of next year. The process will include a restructuring effort that is expected to save the automaker more than $1 billion annually.
Cruise employees were reportedly taken by surprise by the announcement, and remain in limbo with regard to job security with the company.
Clawing back some of last week's losses.
A simpler design may be preferred.
One of them comes with mannequins of the Clampett family.
With a few basic choices.
Five trim levels for Tahoe, three for Suburban.
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gm has lost lots of money on this and China too. Now more layoffs.
Maybe they will pull out of China too. It will be very hard to make money there competing with the government subsided race to the bitten.
Some time back, GM was promising "Ultra Cruise" in addition to Super Cruise. Ultra Cruise was supposed to cover more roads, particularly urban/suburban roads (if I recall correctly). Ultra Cruise was never offered.
I'm going to guess that GM will take the hardware/software from Cruise and offer it as a version of Ultra Cruise - hands/feet free, just keep eyes on the road, like Super Cruise, but including urban/suburban streets.
I venture another guess - working with MSFT/AI, GM will soon offer voice commands for a lot of functions - "open garage door"; "reduce speed to 55 mph"; get directions to the nearest Dunkin Donuts".
GM has spent, and will continue to spend, a lot on software, both within GM and with MSFT. Super Cruise is 5 years old. What did the $10 billion spend on Cruise get for customers and shareholders?
GM already has Google Built-in in many new models for voice controls, so I think a MSFT partnership is unlikely.
Agree that Cruise tech will go towards ADAS, but not sure if that will be over-the-air updates to Super Cruise vs a new more expensive tier. I imagine that depends on the additional sensors needed over what SuperCruise currently requires.
I think autonomous is great for snowflakes who want robomommy to drive them around town .
Theoretically it would be great for disabled people. It would also help people who have sudden medical emergencies (diabetes, seizures, etc). I often think of a future where the car is capable of detecting the owner's collapse and then driving to the nearest ER as it contacts the appropriate medical officials. And if the system improves, then it might one day learn to predict when to take over and avoid accidents. Just the other day some old Honda almost backed up into a friend of mine in a parking lot. They got within a foot and still kept backing up, oblivious to the risk. That's what it was like when we had no reverse pedestrian warning.
AV has a huge economic and safety potential such as disabled, elderly, drunk people, children, trucking etc.
ADAS is lots of fun on a roadtrip, makes it much more relaxing to DJ the next song to play and occasionally switch lanes vs paying attention all the time to keep the vehicle in lane. Around town it's probably less compelling, but could help with safety.
All this, and Mary will still get her bonus.
The girls running GM lost 10 billion on this. If the boys ran the company in this way the press would say “oh that’s poor management “. Nary a peep about Mary? That’s different I guess.
It was always a high risk bet. Doesn't mean it shouldn't be made.
Cruise was managed autonomously, they had a lead but unfortunately they lost it.
Mary is probably right to salvage what remains at this point.
It was the male Cruise CEO who chose to lie about the pedestrian collision that started Cruise's recent troubles. Also, GM profits are doing quite well under Mary. I know, women scare you, but maybe Mommy still loves you.