So far, General Motors' acquisition of Cruise is looking more like a bad investment. That argument is further supported by the fact that the car manufacturing giant is cutting its spending for driverless taxis, following its operation's suspension due to safety concerns.
Cruise to Get Less Spending in 2024
Just when Cruise was progressing to its plans to expand to other locations, the California DMV deemed the service too dangerous to continue its operations. The driverless taxis were eventually suspended as they posed "unreasonable risk to the public."
Considering the issue, General Motors plans to slow the expansion by limiting its spending. From the previous plan of expanding the service to three other cities other than San Francisco, the company will only focus on one city.
GM CEO Mary Barra said in an investor conference that they "expect the pace of Cruise's expansion to be more deliberate when operations resume, resulting in substantially lower spending in 2024 than in 2023," as per The New York Times.
According to GM CFO Paul Jacobson, Cruise's spending will be cut by hundreds of millions of dollars next year and might even be reduced further. The important thing for the company to do now is damage control since Cruise taxis are now seen as dangerous vehicles.
The cut in costs is bound to affect those under Cruise. CEO Mary Barra did not disclose how this move would affect the employees, only that it would provide more details once the company has reviewed independent safety reports on the San Francisco incident.
GM's acquisition of Cruise back in 2016 was for the company to integrate its driverless technology into other vehicles like GMC and Chevy. Obviously, there is still a lot to improve before it can be safely used in other cars.
Furthermore, the suspension has prompted two of Cruise's executives to leave the company. Cruise's CEO, CTO, and President Kyle Vogt resigned, as was quickly followed by Chief Product Officer Daniel Kan a day after.
The Executive Vice President of Engineering Mo Elshenaway will take over the role of CTO and former Tesla and Lyft executive Jon McNeill will be added to the board of directors, as reported by Gizmodo, with no news about the CEO just yet.
Accidents That Led to the Suspension
There have been a lot of reports that point to the dangers of autonomous vehicles. Some of them are minor like disrupting traffic. It also drove through an active crime scene, and that's not the worst thing that happened.
A Cruise vehicle drove over a woman and managed to drag her for 20 feet before it stopped. The incident that served as the final nail in the coffin was when a Cruise vehicle pinned a woman down and required firefighters to respond to the scene.
The civilian was hit by a human-driven car and was thrown into the way of the driverless taxi. According to Engadget, the woman's leg was stuck under the Cruise taxi's rear axle tire, which required the use of a hydraulic tool to get her out from under the car.
