G.M. reduce spending on cruise autonomous driving unit
General Motors will “dramatically reduce spending” on autonomous vehicles in 2024 after accidents with its autonomous taxis in San Francisco.
General Motors is slowing the expansion of its Cruise automated driving division and slashing spending at the unit after suspending operations in response to growing safety concerns about its driverless cars.
The company planned to roll out ride-hailing service in San Francisco and three other cities and begin testing Cruise vehicles on the streets of several other markets. It now plans to focus on a single city to improve the operation of its fleet of driverless vehicles that it has been testing.
“We expect the pace of Cruise's expansion. “We need to be more deliberate about when operations resume, resulting in significantly lower spending in 2024 compared to 2023,” GM Chief Executive Mary T. Barra said Wednesday at an investor conference. “We must rebuild trust with regulators at the local, state and federal levels, as well as first responders and the communities in which Cruise will operate.”
The month Last year, California regulators suspended Cruise's operating license in the state after a Cruise autonomous vehicle in San Francisco ran over a pedestrian who had been hit by another car and dragged her 20 feet. /p>
The company responded by removing all of its driverless vehicles from the road, citing the need to regain public trust.
G.M. Chief Financial Officer Paul Jacobson said spending at Cruise would decline by "hundreds of millions of dollars" in 2024, and would likely decline further as the company reviews the division's operations.< /p>
Mrs. Barra did not elaborate on how the spending cut would affect Cruise's workforce, noting that the company would provide more details after reviewing independent security reports on the San Francisco incident.
While commenting on Cruise, G.M. also provided an update on its business, saying it expects to report net income of $9.1 billion to $9.7 billion for 2023 – a range slightly lower than previous forecasts – after strikes disrupted operations at three of its factories in the fall. ="css-at9mc1 evys1bk0">G.M. said the walkouts cost the company $1.1 billion in operating profit and reduced its production by about 95,000 vehicles. It also said new collective agreements with the United Automobile Workers union and Canada's Unifor union - both of which provide substantial wage increases - would add $500 to the cost of its North American vehicles in 2024. Ms Barra said that the increase in labor costs, however, this would be "fully offset" by cost-cutting measures the company has implemented over the past year.
G.M. also announced it would repurchase up to $10 billion of its shares in an effort to boost the stock price. “Our stock price is disappointing for everyone,” Ms. Barra said. After G.M.'s announcement, its shares rose 11 percent in early trading; they ended the day up 9% at nearly $32, though still barely half their price from two years ago.
She also said G.M. is expected to significantly increase electric vehicle production in 2024, after encountering lower-than-expected demand and delays in ramping up its electric vehicle production. production this year.
“Although the growth rate is lower, E.V. demand is clearly moving in the right direction,” she said. “There’s really no reason why E.V. demand will not be higher in the years to come. »
In her speech, Ms. Barra said G.M. remained optimistic about Cruise's future. “What Cruise has accomplished in the eight years since he acquired the company is remarkable,” she said. “Our priority now is to focus the team on safety, transparency and accountability. »
Founded in 2013 and acquired by G.M. in 2016, Cruise is one of several startups that have worked on developing self-driving cars with the goal of creating a driverless taxis in cities across the United States. One of its competitors is Waymo, which is owned by Alphabet, Google's parent company.
Cruise has tested autonomous taxi services in San Francisco, Phoenix, Houston and Austin, Texas, and tested its autonomous vehicles...
General Motors will “dramatically reduce spending” on autonomous vehicles in 2024 after accidents with its autonomous taxis in San Francisco.
General Motors is slowing the expansion of its Cruise automated driving division and slashing spending at the unit after suspending operations in response to growing safety concerns about its driverless cars.
The company planned to roll out ride-hailing service in San Francisco and three other cities and begin testing Cruise vehicles on the streets of several other markets. It now plans to focus on a single city to improve the operation of its fleet of driverless vehicles that it has been testing.
“We expect the pace of Cruise's expansion. “We need to be more deliberate about when operations resume, resulting in significantly lower spending in 2024 compared to 2023,” GM Chief Executive Mary T. Barra said Wednesday at an investor conference. “We must rebuild trust with regulators at the local, state and federal levels, as well as first responders and the communities in which Cruise will operate.”
The month Last year, California regulators suspended Cruise's operating license in the state after a Cruise autonomous vehicle in San Francisco ran over a pedestrian who had been hit by another car and dragged her 20 feet. /p>
The company responded by removing all of its driverless vehicles from the road, citing the need to regain public trust.
G.M. Chief Financial Officer Paul Jacobson said spending at Cruise would decline by "hundreds of millions of dollars" in 2024, and would likely decline further as the company reviews the division's operations.< /p>
Mrs. Barra did not elaborate on how the spending cut would affect Cruise's workforce, noting that the company would provide more details after reviewing independent security reports on the San Francisco incident.
While commenting on Cruise, G.M. also provided an update on its business, saying it expects to report net income of $9.1 billion to $9.7 billion for 2023 – a range slightly lower than previous forecasts – after strikes disrupted operations at three of its factories in the fall. ="css-at9mc1 evys1bk0">G.M. said the walkouts cost the company $1.1 billion in operating profit and reduced its production by about 95,000 vehicles. It also said new collective agreements with the United Automobile Workers union and Canada's Unifor union - both of which provide substantial wage increases - would add $500 to the cost of its North American vehicles in 2024. Ms Barra said that the increase in labor costs, however, this would be "fully offset" by cost-cutting measures the company has implemented over the past year.
G.M. also announced it would repurchase up to $10 billion of its shares in an effort to boost the stock price. “Our stock price is disappointing for everyone,” Ms. Barra said. After G.M.'s announcement, its shares rose 11 percent in early trading; they ended the day up 9% at nearly $32, though still barely half their price from two years ago.
She also said G.M. is expected to significantly increase electric vehicle production in 2024, after encountering lower-than-expected demand and delays in ramping up its electric vehicle production. production this year.
“Although the growth rate is lower, E.V. demand is clearly moving in the right direction,” she said. “There’s really no reason why E.V. demand will not be higher in the years to come. »
In her speech, Ms. Barra said G.M. remained optimistic about Cruise's future. “What Cruise has accomplished in the eight years since he acquired the company is remarkable,” she said. “Our priority now is to focus the team on safety, transparency and accountability. »
Founded in 2013 and acquired by G.M. in 2016, Cruise is one of several startups that have worked on developing self-driving cars with the goal of creating a driverless taxis in cities across the United States. One of its competitors is Waymo, which is owned by Alphabet, Google's parent company.
Cruise has tested autonomous taxi services in San Francisco, Phoenix, Houston and Austin, Texas, and tested its autonomous vehicles...
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