The Daily Observer London Desk: Reporter- John Furner
General Motors is looking to change the direction of its Cruise robot taxi subsidiary before the company goes off a cliff.
The company announced “hundreds of millions” in spending cuts to Cruise during its business update Wednesday. The trims will likely result in massive layoffs at the subsidiary that employs nearly 4,000 people.
GM CEO Mary Barra said the auto giant is looking to be more “deliberate” in its ownership of Cruise.
“Our priority now is to refocus them on safety, transparency and accountability and build trust with regulators at the local state and federal levels, including first responders and the communities in which we will operate,” Ms. Barra said.
The cuts will significantly hurt Cruise’s ability to expand into Texas and Arizona after initially launching in California.
The change in direction comes after a troubling year for Cruise. Soon after it secured permits to operate robo taxis in California, a series of high-profile collisions led to state regulators halting operations.
Cruise soon halted all operations across the country, essentially stopping all business. The public relations nightmare resulted in the resignation of CEO Kyle Vogt and his co-founder, Dan Kan, last week.
Since the departures, GM has worked to exert more control over its subsidiary and has appointed its own leadership to the top positions at Cruise.
Even without the accidents, Cruise might still be teetering. News came Wednesday that the newly ratified United Auto Workers contract will cost GM approximately $9 billion over the next five years. That could lead to belt-tightening across the automaker.
