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General Motors announced Tuesday it will cut spending on its robotaxi unit Cruise in half, or by roughly $1 billion, in 2024 as it looks to refocus the unit after a pedestrian accident paused its driverless operations and several executives were dismissed. 

Last week, Cruise disclosed that the Justice Department and the Securities and Exchange Commission (SEC) are investigating the company after an October accident in which a Cruise robotaxi struck a pedestrian who had initially been hit by another vehicle in an adjacent lane and dragged the pedestrian 20 feet.

California’s Department of Motor Vehicles pulled Cruise’s permit to operate driverless vehicles, and the company halted operations of its robotaxis around the country.

GM CEO Mary Barra said Tuesday on a call with investors that the automaker will “refocus and relaunch Cruise,” and that the company will “soon” disclose a timetable for resuming its operations.

ANALYSIS REVEALS HOW GM’S CRUISE ROBOTAXI STRUCK AND DRAGGED PEDESTRIAN 20 FEET

“Last week, we released the results of the third-party reviews, and we’ve already begun to implement significant changes to build a better Cruise,” Barra said on the call. “We are committed to earning back the trust with our regulators and the public through our actions.

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“Our planned 2024 investment in Cruise reflects our more deliberate and cadenced go-to-market strategy. And we are developing new financial targets and a new road map. Spending will be down considerably this year, but we will continue to invest in the people who are advancing the software, specialized hardware and AI capabilities. This reflects our commitment to our vision, which is to deliver the safety benefits of self-driving technology and a scalable, profitable business.”

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GM GENERAL MOTORS CO. 38.16 +2.77 +7.81%

CRUISE PAUSES DRIVERLESS VEHICLE OPERATIONS ACROSS US AMID SAFETY PROBE

Mary Barra General Motors CEO

Cruise spent $1.9 billion in 2023 and recorded a $2.7 billion pre-tax loss, excluding $500 million in restructuring costs that occurred as the company cut staff, GM said. Cruise has lost a total of over $8 billion, though Barra has previously said the business could generate $50 billion in annual revenue by 2030.

Barra said the company is “committed to Cruise” and will cooperate with government investigations of the driverless car unit. She said in a call with analysts that Cruise will set a higher bar for its autonomous driving software than matching the safety of human drivers, in part because “humans expect computers to be much more safe” than human operators.

GM’S CRUISE CUTTING 24% OF WORKFORCE, FIRES 9 EXECS AMID ROBOTAXI SAFETY PROBE

Cruise Robotaxi

She added that Cruise’s spending this year will focus on retaining software and engineering talent. Given that the unit’s previous plans to expand robotaxi operations to 20 cities are on hold, the company doesn’t need to spend more on vehicles and operations personnel at this time, Barra said.

GM commissioned a technical review of the October accident that was carried out by Exponent, an engineering firm. The review found the Cruise vehicle had mapping errors and incorrectly identified hitting the woman as a side impact collision. Cruise has recalled the vehicles and updated its software.

Cruise cut its staff by a quarter and has fired nine executives since the accident, while CEO Kyle Vogt and co-founder Dan Kan resigned amid the controversy.

Cruise did not immediately respond to a request for comment.

Reuters contributed to this report.

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