November 22, Reuters Only a few weeks after California banned its self-driving cars from public roads after an accident last month, General Motors’ (GM.N) robotaxi subsidiary, Cruise, intends to relaunch in one undisclosed city before spreading to others.
In addition to expanding a safety investigation of its robotaxis, Cruise this week halted all supervised and manual automobile journeys in the United States. This caused turmoil within the firm and resulted in the resignations of CEO Kyle Vogt and top product officer Daniel Kan.
It is also a setback for a sector of the economy that depends on public confidence and regulatory cooperation. In recent months, Cruise has made much of its grand aspirations to enter more cities and provide entirely driverless taxi rides.
“Once we have taken steps to improve our safety culture and rebuild trust, our strategy is to re-launch in one city and prove our performance there, before expanding,” the business stated in a statement.
The GM division announced that its short-term approach would center on the Bolt-based Cruise AVs, while its long-term plan would center on the Origin, a multi-passenger car without a steering wheel or other controls meant to be operated by a human driver.
It also informed staff members in an email that was read by Reuters that it would be making layoffs, “primarily in non-engineering roles,” and that further information would be available in the middle of December.
According to a representative for GM, Paul Jacobson, the company’s finance chief, would probably discuss the financial effects on the manufacturer in a call with analysts on November 29.
The Robotaxi company is a key component of GM CEO Mary Barra’s plan to double sales to $280 billion. Prior to Cruise’s operations suspension, Barra stated that Cruise and its autonomous vehicle technology could earn $50 billion in revenue by 2030.
In the third quarter, GM lost over $700 million at Cruise, and since 2016, the company has lost over $8 billion.
It now has to contend with greater labor expenses due to a new United Auto Workers contract, slower-than-anticipated sales of its electric cars, and expensive new Washington pollution regulations.
Morgan Stanley analyst Adam Jonas stated in a note on Wednesday that “investors will be watching closely to evaluate whether management sees GM’s challenges as limited to Cruise or if there is a broader discussion about capital allocation across GM’s portfolio.”
SAN FRANCISCO NOTHING
The city in which it will resume operations was not disclosed by GM or Cruise, but it is unlikely to be San Francisco, the scene of the disaster.
One of the self-driving cabs in the event ended up pulling a pedestrian, involving another car. Authorities in California have revoked the company’s authorization to run driverless services.
Cruise operates in Austin and Phoenix, where laws have been more lenient. Waymo, its adversary, is also heavily involved in urban operations.
Cruise had previously petitioned the National Highway Traffic Safety Administration (NHTSA) for approval to deploy up to 2,500 self-driving cars annually without human controls as part of its expansion ambitions.
GM cannot put the Origin on public roads without permission from the government. That July statement from the NHTSA that it “will issue a decision in the coming weeks” came before concerns about safety were sparked by the tragedy.