A Cruise self-driving car, which is owned by General Motors Corp, is seen outside the company?s headquarters in San Francisco, California, U.S., September 26, 2018. REUTERS/Heather Somerville Acquire Licensing Rights
DETROIT, Nov 10 (Reuters) – General Motors’ (GM.N) bet that its Cruise robo-taxi unit will deliver $50 billion in revenue by 2030 is facing its toughest test.
GM Chief Executive Mary Barra has stuck with Cruise in the face of skepticism from investors, arguing that Cruise technology will save lives – and become a significant source of new profit for the automaker in the future.
But right now, the unit’s operations are shut down as regulators investigate the safety of Cruise’s self-driving vehicles. Cruise has nine months of cash left, and one major investor, Honda Motor (7267.T), said on Thursday it does not plan to put up more money. Layoffs have started as Cruise reviews its operations and management.
Cruise has lost more than $8 billion since 2017, including $728 million lost in the third quarter of this year, according to GM financial disclosures. Cruise had $1.7 billion in cash as of Sept. 30, enough to last nine months at the current cash burn rate.
As Cruise’s troubles intensified, investors on Thursday sent GM shares down more than 3% to $26.65, its lowest closing price since August 2020. In addition to the problems at Cruise, GM last month agreed to a costly new contract with the United Auto Workers, and scaled back plans to expand electric-vehicle production.
“I think it’s a bit of a black hole,” said Pzena Investment Management analyst Lawrence Paustian. “It wasn’t too long ago people were really hyped about autonomous and they saw Cruise as this valuable asset. Now everyone’s looking at it as a liability.”
Barra told investors last month they could “rest assured we do have funding plans that will support Cruise’s expansion.” She did not provide details. Barra has stood by Cruise and her forecast that the robo-taxi business could generate $50 billion in revenue by 2030.
GM said in a statement on Thursday that its “commitment to Cruise with the goal of commercialization remains steadfast.”
Safety “has to be our top priority, and we fully support the actions that Cruise leadership is taking to ensure that it is putting safety first and building trust and credibility with government partners, regulators, and the broader community,” GM said.
Cruise is conducting a search for a chief safety officer and has hired law firm Quinn Emanuel to conduct an outside review.
A senior executive at Honda Motor said on Thursday the Japanese automaker had no plan to invest more in Cruise. But Honda Chief Operating Officer Shinji Aoyama said there is no change to Honda’s plan to begin a driverless ride service in Japan in 2026 through a joint venture with Cruise and GM.
In October 2018, Honda invested $750 million in Cruise, valuing the operation at $14.6 billion. GM has not released a more recent valuation for Cruise.
‘PROBLEM OF PERCEPTION’
GM shareholders contacted by Reuters had divided views on Cruise.
“It’s always been my hope that they would spin Cruise out,” said Kyle Martin, Westwood Group analyst, whose firm owns GM shares. “We always knew the technology was going to be challenging, but now I think there’s questions about the leadership there.”
Martin questioned whether any third party would invest further in Cruise.
Other investors said Cruise remains a valuable asset.
“There’s a future there. It’s a problem of perception,” said Jason Petitte, senior research analyst at Kovitz, an asset management firm in Chicago that owns GM shares.
“The dollars are worthwhile in Cruise. Nobody really questions Google for their investment in Waymo,” added Petitte, referring to Google parent Alphabet’s (GOOGL.O) investment in the U.S. self-driving car company. Petitte’s firm recently reduced its stake in GM and is weighing what to do with the remaining shares.
Cruise’s robo-taxis have been sitting idle since last month when the company halted operations nationwide following an incident in San Francisco in which a pedestrian was hit by another car, then struck and dragged along the street by a Cruise robo-taxi. California regulators suspended Cruise’s license to operate, and have accused Cruise officials of misrepresenting information about the incident.
Cruise has said it showed officials of the California Department of Motor Vehicles the complete video of the accident multiple times and provided a copy to officials. Cruise has since launched an internal review of the response to regulators and company’s automated driving system.
GM Chief Financial Officer Paul Jacobson told analysts on Oct. 24 that Cruise’s $700 million in expenses during the third quarter would continue at that quarterly rate “as they balance expanding operations with further efficiencies.”
This week, Cruise began taking new steps to trim costs, even as costs related to the unit’s regulatory problems mounted.
Cruise on Thursday confirmed it has begun furloughing temporary workers who cleaned, charged and maintained its driverless electric robo-taxis.
On Wednesday, Cruise recalled 950 vehicles because the collision detection subsystem of the Cruise Automated Driving Systems (ADS) software may respond improperly after a crash.
On Monday, GM temporarily stopped building Cruise Origin vehicles. Those multi-passenger vehicles were designed to have no human drivers or traditional controls such as a steering wheel. The U.S. National Highway Traffic Safety Administration has not approved Cruise’s request to deploy up to 2,500 Origin vehicles.
Cruise’s plans to expand operations in San Francisco have run in to opposition from local officials and citizens. The pressure intensified on Thursday as a group of more than two dozen labor unions urged the Biden administration to launch an industrywide investigation of driverless vehicles. The unions cited the investigation into Cruise.
Reporting by Ben Klayman and Joseph White in Detroit and David Shepardson in Washington Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
Focus: Investors pull away from GM’s Cruise bet
Recent Comments
Ford Blue Cruise: US regulators investigate fatal crashes involving hands-free driving technology
on
Arsenal highlighted for spending 26 seconds taking corner v Everton – Sky Sports’ tweet backfires
on
Inside Hoda Kotb and Jenna Bush Hager’s ‘amazing’ luxury spring break vacations with their families
on
Inside Floyd Mayweather’s Lavish Lifestyle: A Look at His Stunning Car Collection and Private Jet
on
In
on
If Tom Cruise Ever Gets A Theme Park, Here’s What Movies Should Get Their Own Rides And Attractions
on
‘I Will Immediately Retire From Boxing and Fight Jorge Masvidal…’: Jake Paul Starts 2023 With a Bang
on
How The Other Half Fly: VistaJet Goes To Enviable Lengths To Make Air Travel Better For Your Body
on
Hollywood Reporter: Tom Cruise negotiated with movie studios over AI before the actors strike began
on
Growing number of sports bras, athletic wear found with high levels of toxic chemical, watchdog says
on
GM Cruise Setbacks And EV Profitability Concerns: Analyst Lowers Expectations for Future Investments
on
Fresno State at Nevada live stream, odds, channel, prediction, how to watch on CBS Sports Network
on
Ford Blue Cruise: US regulators investigate fatal crashes involving hands-free driving technology
on
Following Exchange With Caitlin Clark At News Conference, Columnist Won’t Cover Indiana Fever Games
on
Florida lawmakers introduce bills that would criminalize storming fields, courts at sporting events
on
FIU vs. Jacksonville State live stream, how to watch online, CBS Sports Network channel finder, odds
on
Erdogan to attend Turkey-Netherlands Euro 2024 quarterfinal amid diplomatic row with host Germany
on
East Carolina vs. Tulane basketball game postponed following death of Pirates announcer Jeff Charles
on
EA Sports College Football 25, among most anticipated sports video games in history, hits the market
on
Dubai International Airport sees 41.6 million passengers in first half of year, more than in 2019
on
Dozens of boats cruise the Seine in a rehearsal for the Paris Olympics’ opening ceremony on July 26
on
Dozens of boats cruise the Seine in a rehearsal for the Paris Olympics’ opening ceremony on July 26
on
Donovan Mitchell will be extra motivated to carry the Cavaliers, plus other best bets for Tuesday
on
Disney Cruise Line Announces New Fireworks Show and More Details About ‘Silver Anniversary at Sea’
on
Devout athletes find strength in their faith. But practicing it and elite sports can pose hurdles
on
Despite strong Lunar New Year holiday data, consumer spending in China isn’t roaring back just yet
on
Death toll from Ian, storm-caused flooding crosses 50 people; remnants to dissipate over Virginia
on
David and Victoria Beckham so ‘Charmed’ by Tom Cruise They Have His Photos on Display at Their Home
on
Dave Portnoy: Taylor Swift’s security should ‘drag Kim Kardashian to jail’ if she attends Eras Tour
on
Dallas Cowboys Will “Bring You Nothing But Bad Luck”, Sports Media Vet Warns Luka Doncic’s Mavericks
on
Cruise worker accused of stabbing woman and 2 security guards with scissors on ship headed to Alaska
on
Cruise guest gets stuck on ‘claustrophobic’ water slide suspended over ocean: ‘That is super scary’
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
“Completely Tormented”: How Tom Cruise Was Almost Cast In The Shawshank Redemption (& Why He Wasn’t)
on
“Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on
Comparing the Humongous Combined Wealth of Latest Business Partners Lewis Hamilton and Rory McIlroy
on
Colorado State vs. New Mexico live stream, channel, prediction, how to watch on CBS Sports Network
on
College basketball rankings: Virginia joins preseason Top 25 And 1, ready to contend for ACC title
on
College basketball rankings: Kansas helps Big 12 lead conference race for most Top 100 And 1 players
on
CBS Sports announces Matt Ryan will join NFL studio show. Longtime analysts Simms and Esiason depart
on
Can Tom Cruise Save The Box Office Again With Mission: Impossible – Dead Reckoning? An Investigation
on
Cam Newton’s Violent Public Incident Draws Hilarious Reaction From 3x All-Star: “Where Do I Sign Up
on
“Bro Is Jogging”: Resurfaced Video of Usain Bolt’s 9.84 Seconds Run, Leaves Sports World in Denial
on
Braun Strowman Reportedly Set for WWE Return Abroad on Promotional Tour After 6 Months Out Injured
on
Brad Keselowski Feels NASCAR Could Welcome New Manufacturer Soon Amid Martin Truex Jr’s Engine Tests
on
Boise State vs. Nevada live stream, odds, channel, prediction, how to watch on CBS Sports Network
on
Boise State vs. Air Force live stream, odds, channel, prediction, how to watch on CBS Sports Network
on
Big Tech companies will cover travel expenses for employees’ medical procedures, including abortion
on
Biden: ‘At this point I’m not’ planning to visit East Palestine, Ohio, after toxic train derailment
on
Best places to travel in 2023: National Geographic unveils list of top 25 destinations for next year
on
Ask Amy: Should I keep my RSVP simple and just gracefully decline or say I can’t afford the trip?
on
As more abortion bans occur, many patients must travel hundreds of miles for care – or be stranded
on
Air Force vs. Utah State live stream, how to watch online, CBS Sports Network channel finder, odds
on
After UFC Fallout, Conor McGregor Offers a Valuable Piece of Advice to Free Agent Francis Ngannou
on
A weaker dollar, skyrocketing prices and ‘record’ visitor numbers: Good luck in Europe this summer
on
A missile fired by Houthis strikes a US-owned vessel off Yemen in the Gulf of Aden, raising tensions
on
A heavy wave of Russian missile attacks pounds areas across Ukraine, killing at least 4 civilians
on
2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on
$12M Worth Dawn Staley Sports Pricey Jordans While Witnessing Joel Embiid’s Suffering Against Knicks
on
Dozens of boats cruise the Seine in a rehearsal for the Paris Olympics’ opening ceremony on July 26
on
2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on
If you’re a frequent traveler, these wrap tops from Aday will revolutionize your on-the-go wardrobe
on
2024 Super Bowl: CBS Sports Network and CBS Sports HQ to combine for 115 hours of weeklong coverage
on
Sports World Hails ‘Superwoman’ Lindsey Vonn for Her Grand Comeback Despite Career-Changing Injury
on
How Does Jack Nicklaus Travel? Exploring the Private Jets Owned by the ‘Golden Bear’ Over the Years
on
College basketball rankings: Kansas helps Big 12 lead conference race for most Top 100 And 1 players
on
A weaker dollar, skyrocketing prices and ‘record’ visitor numbers: Good luck in Europe this summer
on
Lamar Jackson: NFC side tipped to be ‘overwhelming’ Super Bowl favourites if they signed Ravens QB
on
ICC T20 World Cup 2022: “Love Cricket At All Levels, I’ll Watch Any Cricket, And Love Going There”
on
2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on
Joe Manchin and Tommy Tuberville introduce bill on name, image and likeness rules for college sports
on
San Mateo County Community College District sues five companies over role in ‘pay to play’ scandal
on
If you’re a frequent traveler, these wrap tops from Aday will revolutionize your on-the-go wardrobe
on
“Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on
Biden to tout bill’s prescription drug prices, energy provisions in pitch to Americans, aide says
on
Following Exchange With Caitlin Clark At News Conference, Columnist Won’t Cover Indiana Fever Games
on
Inside Out Mini Jawbreaker Puzzle Game from Disney Cruise Line Now Available at Walt Disney World
on
Katherine Paprocka allegedly embezzled nearly $600k from school for family vacations, IVF treatment
on
Johnny Knoxville Talks Jackass Stunts And How They Compare To Tom Cruise’s Mission: Impossible Work
on
Napoli owner admits he ‘knew’ Victor Osimhen would end up at ‘Real Madrid, PSG or one English club’
on
Camilla Parker Bowles Revealed the ‘Nicest Thing’ She and Prince Charles Do When They Travel Is Free
on
Russian cruise and ballistic missiles kill 4 in Ukraine and Ukrainian rockets kill 2 in Russian city
on
Can Tom Cruise Save The Box Office Again With Mission: Impossible – Dead Reckoning? An Investigation
on
Boise State vs. Air Force live stream, odds, channel, prediction, how to watch on CBS Sports Network
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
College basketball rankings: Kansas helps Big 12 lead conference race for most Top 100 And 1 players
on
Inside Floyd Mayweather’s Lavish Lifestyle: A Look at His Stunning Car Collection and Private Jet
on
Cruise guest gets stuck on ‘claustrophobic’ water slide suspended over ocean: ‘That is super scary’
on
David and Victoria Beckham so ‘Charmed’ by Tom Cruise They Have His Photos on Display at Their Home
on
Boston College vs. Army live stream, how to watch online, CBS Sports Network channel finder, odds
on
Big Tech companies will cover travel expenses for employees’ medical procedures, including abortion
on
Russian cruise and ballistic missiles kill 4 in Ukraine and Ukrainian rockets kill 2 in Russian city
on
A weaker dollar, skyrocketing prices and ‘record’ visitor numbers: Good luck in Europe this summer
on
GameFly Sale Offering Nintendo Switch Sports at a Mind-Blowing Price, Don’t Miss the Opportunity!
on
Ford Blue Cruise: US regulators investigate fatal crashes involving hands-free driving technology
on
San Mateo County Community College District sues five companies over role in ‘pay to play’ scandal
on
2024 Super Bowl: CBS Sports Network and CBS Sports HQ to combine for 115 hours of weeklong coverage
on
Despite strong Lunar New Year holiday data, consumer spending in China isn’t roaring back just yet
on
2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on
Devout athletes find strength in their faith. But practicing it and elite sports can pose hurdles
on
The Rev. Al Sharpton to lead protest after Florida governor’s ban of African American studies course
on
After UFC Fallout, Conor McGregor Offers a Valuable Piece of Advice to Free Agent Francis Ngannou
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
Saipan, placid island setting for Assange’s last battle, is briefly mobbed – and bemused by the fuss
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
David and Victoria Beckham so ‘Charmed’ by Tom Cruise They Have His Photos on Display at Their Home
on
Iowa State starting RB Jirehl Brock among latest college football players charged in gambling probe
on
Biden to tout bill’s prescription drug prices, energy provisions in pitch to Americans, aide says
on
Iowa State starting RB Jirehl Brock among latest college football players charged in gambling probe
on
The Rev. Al Sharpton to lead protest after Florida governor’s ban of African American studies course
on
Sports World Hails ‘Superwoman’ Lindsey Vonn for Her Grand Comeback Despite Career-Changing Injury
on
San Mateo County Community College District sues five companies over role in ‘pay to play’ scandal
on
Saipan, placid island setting for Assange’s last battle, is briefly mobbed – and bemused by the fuss
on
‘Pokémon Scarlet’ and ‘Violet’ Fan Theories Suggest Legendary Time Travel, Alternate Dimension Plot
on
Joe Manchin and Tommy Tuberville introduce bill on name, image and likeness rules for college sports
on
Inside the Michael Jordan ‘Air’ movie, plus why NFL, others are buying into the sports film industry
on
If you’re a frequent traveler, these wrap tops from Aday will revolutionize your on-the-go wardrobe
on
How Does Jack Nicklaus Travel? Exploring the Private Jets Owned by the ‘Golden Bear’ Over the Years
on
Hollywood Reporter: Tom Cruise negotiated with movie studios over AI before the actors strike began
on
Ford Blue Cruise: US regulators investigate fatal crashes involving hands-free driving technology
on
Dozens of boats cruise the Seine in a rehearsal for the Paris Olympics’ opening ceremony on July 26
on
Devout athletes find strength in their faith. But practicing it and elite sports can pose hurdles
on
Despite strong Lunar New Year holiday data, consumer spending in China isn’t roaring back just yet
on
David and Victoria Beckham so ‘Charmed’ by Tom Cruise They Have His Photos on Display at Their Home
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
CBS Sports announces Matt Ryan will join NFL studio show. Longtime analysts Simms and Esiason depart
on
Boston College vs. Army live stream, how to watch online, CBS Sports Network channel finder, odds
on
Boise State vs. Air Force live stream, odds, channel, prediction, how to watch on CBS Sports Network
on
Biden to tout bill’s prescription drug prices, energy provisions in pitch to Americans, aide says
on
After UFC Fallout, Conor McGregor Offers a Valuable Piece of Advice to Free Agent Francis Ngannou
on
2024 Super Bowl: CBS Sports Network and CBS Sports HQ to combine for 115 hours of weeklong coverage
on
‘Best Intention’: Chris Kirk Has Absolute Trust in Jay Monahan and PGA Tour’s Widely Debated Model
on
2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on
“Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
“Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on
CBS Sports announces Matt Ryan will join NFL studio show. Longtime analysts Simms and Esiason depart
on
Carlos Sainz’s Soccer Fanboy Emerges as Spaniard Shares Defining Moment With This Real Madrid Legend
on
Biden: ‘At this point I’m not’ planning to visit East Palestine, Ohio, after toxic train derailment
on
‘Best Intention’: Chris Kirk Has Absolute Trust in Jay Monahan and PGA Tour’s Widely Debated Model
on
Ahead of big sports weekend, dispute with Disney leaves millions of cable subscribers in the dark
on
A heavy wave of Russian missile attacks pounds areas across Ukraine, killing at least 4 civilians
on
2024 Super Bowl: CBS Sports Network and CBS Sports HQ to combine for 115 hours of weeklong coverage
on
2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on
Army vs. Coastal Carolina live stream, how to watch online, CBS Sports Network channel finder, odds
on
AL Rookie of the Year Julio Rodriguez Spreads Joy and Sportsmanship to the Youth of Loma de Cabrera
on
After UFC Fallout, Conor McGregor Offers a Valuable Piece of Advice to Free Agent Francis Ngannou
on
Dubai International Airport sees 41.6 million passengers in first half of year, more than in 2019
on
Devout athletes find strength in their faith. But practicing it and elite sports can pose hurdles
on
Despite strong Lunar New Year holiday data, consumer spending in China isn’t roaring back just yet
on
Dave Portnoy: Taylor Swift’s security should ‘drag Kim Kardashian to jail’ if she attends Eras Tour
on
CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on
“Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on
CBS Sports, Serie A announce new TV rights deal; Paramount+ to air over 400 Italian soccer matches
on
Cam Newton’s Violent Public Incident Draws Hilarious Reaction From 3x All-Star: “Where Do I Sign Up
on
Boston College vs. Army live stream, how to watch online, CBS Sports Network channel finder, odds
on
Angel Reese Launches Foundation Dedicated To Empowering Women Through Sports & Financial Literacy
on
A weaker dollar, skyrocketing prices and ‘record’ visitor numbers: Good luck in Europe this summer
on