“Cruise, which is owned mostly by General Motors and focuses on autonomous vehicles, is appearing to be the next big thing.”
General Motors’ attempts to expand into trendy industries, such as ridesharing and mobility startups, have largely failed since their initial investment in 2016.
Cruise, which is owned mostly by General Motors and focuses on autonomous vehicles, is appearing to be the next big thing.
Unfortunately, Cruise Turns to be Growing Liability for General Motors
GM’s unit, Cruise, which is owned more than 80% by GM, was once considered one of the company’s greatest business opportunities. However, the unit has now turned into a growing liability due to a series of problems and investigations. These issues were sparked by an incident on October 2, where a pedestrian in San Francisco was hit by another vehicle and dragged 20 feet by a Cruise self-driving car.
Following the incident, Cruise’s fleet of robotaxis has been suspended, pending the outcome of independent safety investigations. The company’s leadership has undergone significant changes, with its co-founders stepping down and nine other executives being fired. GM is drastically reducing spending and growth plans for the business, including halting production of a new c. Both local and federal governments have launched their own investigations. Furthermore, the venture is laying off 24% of its employees.
GM, like other companies, has quickly shifted focus from growth initiatives to core business to generate profits amid economic concerns.
GM CEO Mary Barra said, “We are confident in the team and committed to supporting Cruise as they set the company up for long-term success with a focus on trust, accountability and transparency,”
GM still maintains a military defense unit and fuel cell business, both of which recently announced new partnerships. The company does not report revenue or earnings for these units.