GM’s self-driving vehicle subsidiary, Cruise, is set to undergo significant changes in the coming years, as the automaker plans to slash spending by hundreds of millions of dollars in 2024. This decision will unfortunately result in widespread layoffs.
GM’s Chair and CEO, Mary Barra, is determined to refocus Cruise on safety, transparency, and accountability in order to rebuild trust with regulators and communities. In line with this, two independent safety and incident reviews are currently underway to ensure a thorough evaluation of Cruise’s operations. More details about the new direction of Cruise will be revealed in the following weeks.
This announcement comes at a crucial time for GM, as it strives to regain confidence after a recent strike by United Autoworkers and softening demand for electric vehicles. By making these changes to Cruise, GM hopes to demonstrate its commitment to improvement and innovation.
GM’s estimation of the cost of the recent labor deal is an eye-opening $9.3 billion. Nonetheless, the automaker is looking to the future with optimism, reinstating its 2023 guidance with adjusted earnings projected to be between $11.7 billion and $12.7 billion. GM has also announced a $10 billion share buyback program and a 33% increase in quarterly dividend for the following year.
While GM has heavily invested in Cruise since its acquisition in 2016, spending in 2024 will be significantly reduced compared to 2023. This strategic move aims to ensure a more efficient allocation of resources and align investments with future goals.
Cruise has faced its fair share of challenges, including the suspension of permits to operate self-driving vehicles on public roads in California and various incidents that led to the withdrawal of permits. The company has temporarily paused all driverless operations and experienced the departure of its CEO and co-founder, Kyle Vogt, as well as co-founder Dan Kan.
To overcome these obstacles and maintain a strong focus on safety, GM has appointed co-presidents to lead Cruise. Additionally, other executive appointments have been made to enforce strict safety requirements and ensure the highest standards are met.
Even before the recent issues, GM was already seeking ways to enhance efficiency and cut costs by finding synergies within the company. These efforts reflect the automaker’s dedication to continuous improvement and adapting to the ever-changing automotive landscape.
As GM sets its sights on the future, these changes to Cruise mark a significant shift in strategy. By prioritizing safety and accountability, GM hopes to position itself as a leader in the self-driving vehicle industry and regain the confidence of regulators, communities, and consumers alike.
“Travel aficionado. Incurable bacon specialist. Tv evangelist. Wannabe internet enthusiast. Typical creator.”