GM’s big bet on driverless cars is failing

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

The automaker’s self-driving car subsidiary, Cruise, announced the resignation of Kyle Vogt as CEO last night. The decision came more than a month after an accident in which a hit-and-run victim was pinned under a cruising vehicle and then dragged 20 feet to the side of the road. As a result, the California Department of Motor Vehicles suspended Cruz’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 conduct an independent safety audit.

It’s been a tumultuous seven years since GM first announced its plan to acquire Cruise with the goal of quickly commercializing the technology. The company has achieved some significant wins in recent months, only to see most of that progress evaporate after a series of missteps that 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 quickly commercializing the technology

Most automakers have already given up on their autonomous ambitions. Last year, Ford and Volkswagen pulled their funding from Argo AI, forcing the company to shut down. Toyota’s vision of a futuristic city teeming with self-driving cars has been significantly delayed. In 2022, AV investment is down nearly 60 percent year-over-year as startups grapple with layoffs or shutting down altogether.

But Cruz’s struggles are unique to GM. Other car companies have sought to distance themselves from startups working on self-driving cars. But GM remains optimistic, insisting that the billions of dollars it’s sinking into the technology (GM has lost $8.2 billion on Cruise since 2017) will ultimately lead to a more secure future — and a huge payoff for the company.

And there was no shame in putting Vogt in the spotlight. GM CEO Mary Barra regularly invited him to appear on earnings calls or speak at investor conferences as a sign that the automaker was fully invested in Cruise. Barra herself took the stage at CES in 2022 to say that GM will be selling fully autonomous cars powered by Cruise technology to regular people by the middle of the decade. She staked her own position on the startup’s success.

Rather than sit back and let driverless cars eventually come to them, Barra insisted that GM stay in the driver’s seat. And now he must deal with the consequences when the company’s “move fast and break things” culture led to a crisis.

But Cruz’s struggles are unique to GM

Initially, this meant taking a more direct hand in Cruise’s operation. Barra reportedly told employees that GM general counsel Craig Glidden will serve as Cruise co-president alongside Mo Elshenavi, who will also become chief technology officer. Former Tesla president John McNeil, who has been a member of GM’s board of directors for several years, was appointed vice chairman of Cruise’s board along with Barra.

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

This isn’t the first time Cruz has gone through a leadership shakeup. Barra ousted Dan Amann as Cruise CEO in December 2021, replacing him with Vogt, who was chief technology officer at the time. The eviction was reportedly the result of a vision difference. Amann, who had once competed with Barra for the top job at GM, wanted to keep the focus on robotics, while Barra and the GM board wanted to go big, including putting Cruise’s technology into Cadillac luxury cars. The announcement at CES definitely confirms this version of events.

Vogt was happy to be the face of that larger vision. He claims that self-driving cars will lead to a dramatic drop in traffic accidents, using the example of a young girl killed at an intersection in San Francisco to support his argument. Cruise even bought a full-page ad in The New York Times stating that “human drivers are terrible” and touting its driverless cars as the only solution. And Vogt confidently took the stage at an investor conference to say that Cruise’s steering-less, pedal-less Origin shuttles are “just days away” from federal approval — though no such approval is pending.

GM wanted a CEO who could push technology to its limits. But under Vogt, Cruz may have pushed too hard. According to times, the company “prioritized program speed over safety.” In many ways, this mirrors Uber’s infamous approach to self-driving cars, which has reduced safety to put more cars on the road. Ultimately, an Uber self-driving car killed a woman crossing the street in Arizona, prompting the shutdown of an entire division of the company.

GM has already tightened the reins, announcing layoffs to come. Cruise has already laid off many of the contract workers who perform fleet maintenance and operations for the company. But now it seems Cruise employees are also at risk of losing their jobs.

Vogt wanted Cruise to dominate the market the same way Uber dominated Lyft. But in fact, Uber’s failed effort to launch driverless cars proved far more instructive.

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