GM’s bet on Cruise autonomous vehicles sees major roadblocks
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GM’s bet on Cruise autonomous vehicles sees major roadblocks
At an investor conference last week, General Motors CEO Mary Barra announced that the company is scaling back its self-driving vehicle unit, Cruise. The move comes after California regulators pulled Cruise’s permit to operate autonomous cars following a traumatic accident, saying the vehicles pose “an unreasonable risk to the public.”
Marketplace’s Lily Jamali has been following this story for “Marketplace Tech.” She joined “Marketplace Morning Report” host David Brancaccio to discuss the latest in the Cruise saga.
David Brancaccio: Remind us of the year that this Cruise subsidiary has had, [which] led to the company halting operations across the country. What happened?
Lily Jamali: Yeah, so this all started actually with some good news, believe it or not, for the company. In August, regulators here in California gave Cruise the green light to expand its robotaxi service in San Francisco. A day after that approval, a bunch of cruise vehicles got stuck. They blocked traffic in a neighborhood there, the North Beach neighborhood. And there were other mishaps too, but the turning point came in October, when a Cruise vehicle dragged a pedestrian who had been hit by another car. This Cruise vehicle dragged her for about 20 feet, and the woman suffered serious injuries. There was a dispute about whether Cruise initially shared with regulators all its video footage from that incident. And ultimately, they ordered Cruise to halt operations in the city, and the company has now suspended trips across the country.
Brancaccio: This is altering the way people are thinking beyond Cruise, but the way they’re thinking about self-driving technology more broadly.
Jamali: That’s right. You know, when I covered tech, the first time seven to eight years ago, there was a new self-driving tech launch happening seemingly every week — and I have the tacky swag from that era to prove it, David. Cruise, with the long runway that GM had given it, was one of the companies left standing. Google’s Waymo is another. Missy Cummings, who is a robotics expert at George Mason, expects Waymo to move extra carefully now after what’s happened here. But she says that industry-wide, autonomous tech still has a long way to go.
Missy Cummings: Fundamentally, there are problems in the computer vision systems of these cars that we do not know how to fix. And until we figure that out, this technology is not going to be ready.
Jamali: Warnings from Cummings there to take it slow, because, in her view, Cruise moved very fast — too fast.
Brancaccio: Alright, and now back to General Motors cutting spending to this technology, [we] can expect layoffs at Cruise. What does it mean more generally for GM?
Jamali: Well, the future of Cruise isn’t clear, but departures in the C suite don’t paint an especially bright picture for them. You’re right that layoffs are expected and this company employs about 3,800 employees. Cruise does plan to relaunch in one U.S. city soon; we don’t know where at this point. In terms of GM’s investment, when the company bought Cruise in 2016, its technology was supposed to be a big growth driver for them. Now, they have this big hurdle, trying to build back trust with regulators. That’s something Mary Barra has been talking about a lot when she’s been asked about Cruise. And that points to ongoing interest in Cruise, but like so much in tech, Cruise burns through a lot of cash — hundreds of millions of dollars per quarter lately — and GM is making clear they are tightening the purse strings here.
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