Kyle Vogt stepped down Sunday as CEO of Cruise, the self-driving car company he co-founded in 2013. Vogt will land on his feet. The future for Cruise is uncertain.
Cruise will now have two Presidents. General Motors’ chief counsel, Craig Glidden, who will take control of the efforts to navigate Cruise out of robo-taxi regulation hell. Mo Elshenawy, formerly Cruise’s head of engineering, will become President and Chief Technology Officer.
Since a Cruise car dragged a pedestrian down a San Francisco street, the company has suspended operations in the United States – though not in Japan or Dubai. California regulators have pulled the company’s license to operate driverless cabs and federal safety regulators are investigating various incidents involving Cruise driverless cars.
Federal regulators have yet to approve deployment of the Cruise Origin purpose-built driverless shuttle – which company officials have said is key to turning a profit.
U.S. Transportation Secretary Pete Buttigieg said Monday his agencies will do “everything we can” to assure robo-taxis are safe.
Cruise’s board, controlled by GM, has hired outside lawyers and technology experts to evaluate the unit’s technology as part of an effort, in Cruise’s words, to “strengthen public trust.” Those efforts will face vigorous opposition from automated vehicle skeptics, including labor unions.
Uber’s struggle to put its driverless car effort back on track after a fatal accident illustrates how challenging it could be to rebuild trust. Uber eventually sold its AV operations. Ford and Volkswagen also abandoned their shared self-driving car effort, seeing no end to losses.
California regulators have accused Cruise of misrepresenting critical information in connection with the Oct. 2 incident. Cruise has said it shared information fully. The controversy has derailed Vogt’s drive to scale up Cruise’s operations to meet GM’s goal of generating $50 billion in revenue by 2030.
GM has already warned that it could have to slash the value of Cruise.
In 2021, Microsoft, GM, Honda and other investors put $2 billion into Cruise valuing the operation at $30 billion, Reuters reported at the time. GM has not released a current valuation for Cruise.
One day before he stepped aside, Vogt apologized to Cruise employees for the situation the company is in and said employees would be allowed to sell their non-public shares back to GM – reversing a decision last Thursday to cancel the share buyback.
Cruise has less than nine months of cash left. GM CEO Mary Barra told Cruise employees in an email Sunday that GM is “intensely focused on setting Cruise up for long-term success,” according to Reuters colleague Greg Bensinger.
An all-hands meeting at Cruise is scheduled for Monday at 1 p.m. Pacific time. How many hands will be pecking out messages to potential new employers is just one challenge Cruise’s new leaders will face.
