The Breakdown of Cruise Inc. – Revisiting GM Spending in the Light of a Stop in Automated Operations
Update December 14th There was a stop in automated operations which led to GM cutting spending on Cruise. The reduction in spending was not the cause of the layoffs. This story has been updated to better reflect that fact.
In response, several top executives have left the company, including co-founder and CEO Kyle Vogt and chief product officer Dan Kan. Nine more executive were dismissed yesterday, including chief legal and policy officer Jeff Bleich and senior vice president of government affairs David Estrada.
The company’s VP for engineering was promoted to president and chief technology officer after the resignation of Vogt. The memo was written by Elshenawy and it hit a sober tone.
Today, we are making staff reductions that will affect 24% of full-time Cruisers, through no fault of their own. We are simplifying and focusing our efforts to return with an exceptional service in one city to start with and focusing on the Bolt platform for this first step before we scale. As a result, we are reducing our employee counts in operations and other areas. Some Tech positions are impacted, but these impacts are mostly outside of engineering. Yesterday, we took actions to part ways with several members of the SLT.
The affected employees were mostly in the commercial operations division and related corporate functions. She added that the company’s top priority was to “do right” by these departing workers.
The laid off can get an additional eight weeks of pay because they will stay on payroll through February 12. Long-term employees are being offered an additional two weeks’ pay per every year at Cruise over three years. Everyone will receive an end-of-the-year bonus, as well as extended medical and dental coverage, immigration support, and other benefits. On Cruise’s website the full memo was posted.
Breaking the GM Autonomous Vehicle Decree: A Reply to ElShenawy’s Letter to the Board of GM
Last month, General Motors halted production of its purpose-built robotaxi, called the Origin. An unconventional cube on wheels doesn’t meet safety standards because it lacks a steering wheel, making it difficult for federal approval to hit the roads. In his letter to staff on Thursday, ElShenawy confirmed the company’s pared-down vehicle ambitions. He said Cruise would be focusing his attention on the Bolt platform, the conventional, Chevrolet-branded electric car that he has used for years.
GM is also putting its own people in place to keep a closer eye on Cruise. Craig Glidden will remain as the company’s chief administrative officer and serve as a president. The Cruise board has a vice chairman who is Jon McNeill, who joined the board last month.
GM has lost $8.2 billion on Cruise since 2017 but expects to lose much less going forward. In a recent call with investors, the automaker didn’t share specific cash reductions, but chief financial officer Paul Jacobson said it would likely amount to “hundreds of millions” of dollars.
But GM isn’t ready to pull back completely from self-driving technology like some of its competitors. In an interview in Washington, DC, yesterday, Barra said that fully driverless cars will scale faster than a lot of people think.
“Some of the challenges we just faced, I think, it was more not working with the regulators to help them understand the technology and then being transparent as issues happen,” she said. It was found by a third party that the technology was already safer than a human driver.
Days later Cruise halted autonomous vehicle testing and operations US-wide. The company had plans to launch in other cities, including Houston, Dallas, and Miami, before the crash.