GM Stays Committed To Cruise, Self-Driving Cars. The Stock is Up.

For starters, an independent expert has been retained to conduct a “comprehensive safety assessment.” That party hasn’t been named yet. The decision comes after Cruise announced it will hire a chief safety officer who will report directly to CEO Kyle Vogt.

The decisions are coming in the wake of an early October accident that ultimately ended with the suspension of Cruise’s license to operate self-driving taxis in California.

A hit-and-run victim ended up under a Cruise taxi and the self-driving car didn’t respond as well as a human driver might have.

Cruise also announced that an engineering firm would help conduct root-cause analysis of the incident. Craig Glidden is assuming the role of chief administrative officer. He will oversee company efforts around transparency and community engagement. 

Cruise could still operate taxis with human drivers behind the wheel. They are pausing those operations, impacting about 70 vehicles. “This orderly pause is a further step to rebuild public trust while we undergo a full safety review,” said the company in an emailed statement.

GM and Cruise are taking a cautious approach. There is a lot at stake for GM. The company believes Cruise could generate some $50 billion in sales by 2030. The current car business is expected to generate about $165 billion in sales in 2023.

GM shares were up 0.2% in premarket trading Wednesday while
S&P 500
and
Dow Jones Industrial Average
futures were up 0.3% and 0.2%, respectively.

Shares gained 4.8% Tuesday after the October inflation reading came in lower than expected. That increases the likelihood that the Fed will stop raising rates and higher rates make buying a car with financing more expensive.

Higher rates have weighed on GM shares. Coming into Wednesday trading, GM stock is down about 30% over the past 12 months.

Write to Al Root at [email protected]