Abandon ship, Cruise is going down!
Ah, 2023. The captain and the top crew members have already departed. 24% of the crew has walked the plank The ship is listing and taking on serious water. This is not going to end well. It’s time to make some predictions for 2024!
Recap: So far, not so good
Cruise folks were ecstatic on August 10th when the California Public Utilities Commission (CPUC) approved robotaxi passenger service across San Francisco. Cruise had aggressively moved forward with their deployment, taking multiple risks. They were all going to become rich, and save the environment too, well, at least according to the marketing folks and the CEO.
But soon there were awful crashes, like colliding with a fire truck, and the spectacular high-speed one on August 18th. And of course, lots of general havoc throughout the city. Emergency responders were especially impacted and frustrated. They were quickly required to cut their San Francisco fleet in half.
Some tried to call attention to problems, with those pesky cones. It worked!
Some San Franciscans decided to escalate hostilities.
But Cruise had lots of money to throw on the fire, so burn it they did. $732m in the 3rd quarter alone.
And then, the self inflicted disaster
On October 2nd a pedestrian was hit, run over, and dragged by “Panini” (how could a car with such a cute name inflict such traumatic injuries??). The person ended up in SF General Hospital for over two months. But that was only part of the disaster. Even worse was Cruise withholding information from the regulators and everyone else, and trying to put all responsibility for the pedestrian being injured on the human driver of the other car that also hit the pedestrian.
This resulted in the California DMV declaring the Cruise cars unsafe and they had Cruise immediately cease autonomous driving. The CPUC then immediately revoked cruises permits for providing robotaxi service. Soon after Cruise pulled their fleet in all cities, not just in San Francisco. The legal team from GM surely insisted on Cruise stopping service everywhere given the extreme liability of having the California DMV officially declare the cars as being unsafe.
The federal NHSTA initiated an investigation to evaluate whether cruise vehicles were unsafe with respect to pedestrians.
Abandon ship!
After the shut down of the cruise system it was announced that there would be layoffs and significant cutbacks. The Cruise Origin, the custom vehicle that was going to make crews profitable, was abandoned. Morale plummeted. As I had predicted, the cofounders of the company, the CEO Kyle Vogt and the Chief Product Officer Dan Kan, soon resigned. GM then cleaned house and removed nine additional key executives including the all important COO, the head of legal, and the head of government affairs. In a serious sign of impending doom none of these people were replaced. Ominously, the CTO was merely recast as the President and not even as an interim CEO. Weeks later the key executive positions still appear to be unfulfilled.
And then 900 Cruise employees were laid off.
Other GM factors
GM also has had to deal with big labor issues (increased labor costs of $9.3B), resulting in new labor contracts, and a much higher cost of manufacturing vehicles. GM also has been dealing with a very difficult and expensive switch over to electric vehicles. They don’t have the time or the money to continue to babysit Cruise.
The robotaxi business no longer looks financially worthwhile. But GM would like to see autonomous vehicle functionality be an option for the other vehicles.
And finally, Predictions for 2024
In 2024 it will become painfully obvious that Cruise cars being programmed to stop during dangerous situations results in the worst possible outcomes. It greatly compounds the danger. It is a complete failure in safety. If they continue, they would need to completely change how they approach safety.
2024 will also show that Cruise’s successes in the past were based on misleading both the public and the regulators. It was an intentional strategy. but once it has been fully exposed, it will surely be their downfall.
GM will soon be exiting in the robotaxi business since it makes no sense for them financially. Therefore, in the first quarter of 2024 I expect Cruise to do additional major layoffs. This round will likely include roughly 1,000 technical people. Many employees, including key technical ones, will clearly see that the ship is sinking and will abandon the company on their own. The brain drain will be crippling.
At the same time GM will actively explore selling a cleaner and downsized Cruise. If the sale does not occur in the first half of 2024, then I would expect an additional round of layoffs of another 1k people. Cruise will be rebranded as a non-public facing division. We will then only hear about them in history books.
Other great write ups on Cruise most ignoble 2023
This has been quite a year for robotaxis. It means that there are also quite a few worthwhile write ups, including:
