Connect with us

Technology

GM’s big bet on driverless cars turns sour

GM’s bet on driverless cars is looking more shaky after Cruise CEO Kyle Vogt resigned. The company has been more bullish on autonomous cars than many of its rivals.

Published

on

GM’s big bet on driverless cars turns sour
GM’s big bet on driverless cars turns sour

Two years ago, General Motors presented a vision for the future that involved “zero crashes, zero traffic, and zero emissions.” Today, that future seems further away than ever.

The automaker’s driverless car subsidiary, Cruise, announced last night the resignation of Kyle Vogt as CEO. The decision came over a month after an incident in which a hit-and-run victim became pinned under a Cruise vehicle and then was dragged 20 feet to the side of the road. As a result, California Department of Motor Vehicles suspended Cruise’s permit to operate driverless cars in the state.

The company subsequently paused driverless operations nationwide, appointed a new chief safety officer, recalled all 950 of its vehicles, and retained an outside group to perform an independent safety audit.

And the resignations may not be over; Dan Kan, a co-founder of Cruise and the company’s chief product officer, is also stepping down, according to a source with knowledge of the events. A spokesperson for the company confirmed the departure.

It’s been a tumultuous seven years since GM first announced its plan to acquire Cruise with the goal of rapidly commercializing the technology. The company has scored some significant victories in recent months, only to see most of that progress evaporate after a series of errors have exposed major problems with Cruise’s management. And now Vogt’s resignation puts GM in a tough position: continue to fully embrace self-driving cars, or cut its losses.

It’s been a tumultuous seven years since GM first announced its plan to acquire Cruise with the goal of rapidly commercializing the technology

Most automakers have already dialed back their autonomous ambitions. Last year, Ford and Volkswagen pulled their funding from Argo AI, forcing the company to cease operations. Toyota’s vision for a futuristic city teeming with self-driving cars has been significantly delayed. In 2022, AV investments went down nearly 60 percent year over year as startups struggled through layoffs or outright closures.  

But Cruise’s struggles are unique to GM. Other car companies have sought to put some distance between themselves and the startups working on self-driving cars. But GM has stayed bullish, insisting that the billions of dollars it was sinking into the technology (GM has lost $8.2 billion on Cruise since 2017) would eventually result in a safer future — and a huge payout for the company.

And it wasn’t shy about putting Vogt in the spotlight, either. GM CEO Mary Barra would routinely invite him to appear on earnings calls or to speak at investor conferences in a sign that the automaker was fully invested in Cruise. Barra herself went onstage at CES in 2022 and declared that GM would sell fully autonomous vehicles, powered by Cruise’s technology, to regular people by mid-decade. She staked her own position on the startup’s success.

Rather than sit back and let driverless cars come to them eventually, Barra insisted on GM staying in the driver’s seat. And now it has to deal with the fallout when that company’s “move fast and break things” culture has resulted in a crisis.

But Cruise’s struggles are unique to GM

Initially, that means taking more of a direct hand in Cruise’s operation. Barra reportedly told employees that GM general counsel Craig Glidden will serve as Cruise’s co-president alongside Mo Elshenawy, who will also become chief technology officer. Former Tesla president Jon McNeill, who’s been a board member at GM for several years, was named vice chairman of the Cruise board alongside Barra.

“We continue to believe strongly in Cruise’s mission and the potential of its transformative technology as we look to make transportation safer, cleaner and more accessible,” Barra stated in an email to employees, according to TechCrunch.

This isn’t the first time Cruise has gone through a leadership shuffle. Barra ousted Dan Ammann as Cruise CEO in December 2021, replacing him with Vogt, who at the time was chief technology officer. The ouster was reportedly the result of a difference in vision. Ammann, who had once competed with Barra for the top spot at GM, wanted to keep the focus on robotaxis, while Barra and the GM board wanted to go big, including putting Cruise’s technology in luxury Cadillac vehicles. The announcement at CES certainly seemed to confirm that version of events.

Vogt was happy to be the face of this grander vision. He argued that self-driving cars would lead to a dramatic drop in traffic fatalities, using the example of a young girl killed in a San Francisco intersection to bolster his argument. Cruise even bought a full-page ad in The New York Times declaring “human drivers are terrible” and holding up its driverless cars as the only solution. And Vogt confidently took the stage at an investor conference and said Cruise’s steering wheel- and pedal-less Origin shuttles were “just days away” from federal approval — despite no such approval pending.

There are other options available. GM just re-absorbed its electric delivery company BrightDrop, which spun out nearly two years ago. Could GM do something similar to Cruise, bring it directly into the fold to ensure corners aren’t cut and safety remains paramount?

GM wanted a CEO that could push the technology to its limits. But under Vogt, Cruise may have pushed too hard. According to the Times, the company “put a priority on the speed of the program over safety.” In many ways, it echoes Uber’s infamous approach to self-driving cars, which cut corners on safety in order to get more cars on the road. Eventually, an Uber self-driving car killed a woman crossing the street in Arizona, which resulted in the company shuttering the whole division.

It’s unclear, but GM has already tightened the reins by signaling that layoffs would be coming. Cruise has already laid off many of the contract workers who do maintenance and fleet operations for the company. But now it seems like Cruise employees are at risk of losing their jobs as well.

Vogt wanted Cruise to dominate the market much in the same way that Uber dominated Lyft. But in truth, Uber’s failed effort to launch driverless cars turned out to be way more instructive.

Update November 20th 12:40PM ET: Dan Kan, chief product officer at Cruise, is also resigning. This story has been updated to reflect this fact.

With additional reporting by Alex Heath

Comments

Trending